World Bank: Downturn 'a human catastrophe' for poor

The steep global financial crisis risks turning into “a human and development calamity” for many poor countries, the World Bank said as it urged donor nations to speed up delivery of money they have already pledged and consider giving more.

The bank said that developing countries, who are its main constituency, face “especially serious consequences with the crisis driving more than 50 million people into extreme poverty, particularly women and children”.

Bank President Robert Zoellick said some of the poorest economies are being hit by “second and third waves of the crisis”. He said no one knows how long it will last or when recovery will begin.

“There is a widespread recognition that the world faces an unprecedented economic crisis, poor people could suffer the most and that we must continue to act in real time to prevent a human catastrophe,” Mr Zoellick said.

But he said the bank would respond by tapping its healthy balance sheet to increase lending by up to US$100bn over three years and launch other initiatives in the fields of social protection, public works and agriculture.

Mr Zoellick spoke at a Washington news conference that wrapped up weekend meetings of the World Bank and its sister institution, the International Monetary Fund, aimed at determining what new action is needed to counteract the worst financial crisis in decades.