G-20 finance ministers call for more aid to poor countries

Global finance and aid ministers on Sunday asked rich donor nations to extend more aid to poor countries, even as they issued warnings that world poverty is set to rise sharply as the financial vortex sucks more nations into the crisis. 

The ministers from the 185 member countries of the World Bank and the International Monetary Fund also said that if the global crisis dragged on it would be necessary to raise more resources for the World Bank.

In a communiqué issued after the meeting, they urged donors to accelerate delivery of their commitments to increase aid and consider exceeding existing commitments.

The credit crisis, which is the worst since the Great Depression, could derail universally agreed UN targets on poverty eradication by 2015, they added.

World Bank president Robert Zoellick said that the UN Millenium Goals on poverty, hunger, equality and infant mortality were unlikely to be met and real time action was needed to prevent a human catastrophe.

Developing countries that had weathered the initial impact are now being hurt by the financial crisis which has come on the heels of a damaging upward spiral of food and fuel costs.

The official session focused on protecting the developing countries from the virulent financial crisis.

According to the World Bank estimates, developing nations faced a financing gap of between $270 billion to $700 billion.

The World Bank said it expected world economic growth to slow down sharply this year to 2.1 per cent from 5.8 per cent last year as the deep recession in the advance economies hits exports.

According to a recent World Bank analysis, the current crisis would result in 53 million more people living in extreme poverty in 2009, or 65 million more if a $2 a day measure was used. It said 200,000 to 400,000 more infants would die each year. It said the number would rise if the crisis deepened and growth in the developing countries continued to falter further.

Meanwhile, it is learnt that the Group of 20 major economies will have a summit meeting in Washington in September to ensure that efforts to make 2010 a year of recovery from the severe global economic crisis are on track.

According to Planning Commission deputy chairman Montek Singh Ahluwalia who represented India at a meeting of G-20 finance ministers, the group was committed to making 2010 a year of recovery.

He said there were indications of a recovery on the horizon with many of the decisions taken by the G-20 leaders at the London summit in the process of implementation.

He said India was weathering the crisis better than most other countries with its economy projected to grow 6 per cent this year. He added that the hoped the Indian economy would also be able to improve next year.

He said the September summit of G-20 leaders would discuss all measures and review if these were more or less on track and suggest changes in course if they were not.

New Delhi, meanwhile, has offered $10 billion to the IMF towards addressing  the worst global crisis in six decades.

The Indian delegates led by Ahluwalia also called for a hike in the country's voting rights at the IMF. The delegation included Reserve Bank of India governor D Subbarao and Economic Affairs secretary Ashok Chawla.