Washington DC (BBN) – As development experts prepare for the International Conference on Financing for Development in Doha, Qatar, the World Bank is calling on donors to further boost aid as investment in developing countries heads for a “perfect storm.”
“Developed country policymakers must avoid putting in place policies and structures that undermine the interests of developing countries,” said World Bank President, Robert B. Zoellick.
In a paper prepared for the Doha Follow-up Conference on Financing for Development to Review the Implementation of the Monterrey Consensus, the World Bank said it is imperative that donors meet their Gleneagles commitments to debt relief and scaled-up aid. At present, G7 countries are falling $30 billion short of these goals.
The Implications of Global Crises on Developing Countries, the Millennium Development Goals, and the Monterrey Consensus, developing countries are facing a “perfect storm,” with a convergence of slowing world growth, a withdrawal of equity and lending from the private sector, and higher interest rates, according to the paper.
Investment, the main driver of developing country growth over the past five years, will be hard hit by the financial crisis, and remittances from developing country migrants—a powerful poverty reduction mechanism—will likely decline in line with the global slowdown.
All this comes in the wake of the severe food and fuel price crises, which placed a heavy fiscal, economic and social burden on many developing countries, the World Bank said.
Reflecting deteriorating global conditions, the World Bank has revised its 2009 growth forecast downward.
Developing country growth in 2009 is now forecast at 4,5 per cent, nearly 2 percentage points lower than previously estimated; growth in high-income countries, many of which are already in the midst of recession, is now expected to be marginally negative in 2009.