The World Bank is tripling its lending capacity, up to about $100 billion for the fiscal years 2009-2011.
The above initiative comes as a response to the impact of the global crisis on both developed and developing countries.
The Bank has also called for a new ”vulnerability Fund” where industrialised countries would pledge the equivalent of 0.7 percent of their economic stimulus packages as additional aid, over and above existing ODA commitments, to help developing countries weather the impacts of the global economic crisis.
“2009 will be a dangerous year,” the president of the World Bank, Robert Zoellick, said when he warned the international community of the possible impact of the global crisis.
In support of the statement, the senior vice president of external affairs, from the World Bank, Marwan Muasher, recently attended a development dialogue held by the Botswana Institute of Development Policy Analysis (BIDPA) in collaboration with the World Bank at Gaborone Sun.
Muasher was particularly focused on the impact the crisis would have on people’s lives within the developing countries, which he described as tragic and compelling.
Muasher revealed that the financial crisis is trapping up to 90 million more people in poverty, especially in developing countries.
“Tragically, the infant mortality rates in developing countries are set to soar, and estimates show that infant deaths could be from 200,000 to 400,000 higher every year than they would have been in the absence of the crisis. This means that a total of 1.4 to 2.4 million more infants may die if the crisis persists,” said Muasher.
According to Muasher, The World Bank has also predicted that global GDP growth will contract by 1.7 percent this year, marking the first decline in world output since World War 2.
“It is also clear that the gloomy arithmetic of the financial crisis is affecting whole economies, adversely impacting the lives of people, threatening the environment, and eroding Sub-Saharan Africa’s hard-won development gains,” said Muasher.
Thus the world bank had decided to broaden the issue of voice and participation as part of the global response to the crisis by taking proactive steps such as adding a third chair for Africa in the membership of its Board of Executive Directors.
“Because poor infrastructure constrains Africa’s growth prospects, we have established a $55 billion infrastructure facility, with $10 billion coming from the International Finance Corporation, which is the World Bank’s private sector arm,” said Muasher.
In addition to their latest initiatives to help developing countries, Muasher revealed that under the leadership of former president Zedillo of Mexico, a commission is looking at how management and governance can be improved, and how the voices of developing countries such as Africa can be strengthened in the day-to-day affairs of international financial institutions such as the World Bank.
The vice president also commended Botswana for showing the world how to utilize natural resources for improving people’s lives, achieving strong economic growth and advancing social well-being.
“Gaborone could well be the place where we strengthen our resolve and remove the scourge of poverty, disease, and illiteracy, both in Africa and beyond,” said Muasher.