World Bank launches $2 bn fast-track funds for poor nations

By Xinhua,

Nairobi : The World Bank (WB) has announced the creation of a $2 billion fast-track facility to speed up grants and long-term, interest-free loans to help the world’s poorest countries face the global financial crisis.

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The International Development Association (IDA) Financial Crisis Response Fast-Track Facility, approved late Tuesday by the WB, will allow the development bank to provide fast funds for social safety nets, infrastructure, education and health.

“The poorest people will be hit the hardest by the crisis that is likely to get worse next year. Our Global Economic Prospects report projects developing country growth will be 4.5 percent next year, down from 7.9 percent in 2007,” WB chief Robert Zoellick was quoted as saying in a statement released by the bank.

“We want to help countries manage this downturn with rapid financing to help minimize its impacts and by assisting them in designing supportive policies.”

The facility would fast-track an initial $2 billion of the $42 billion of IDA resources available to 78 of the world’s poorest countries over the next three years.

“We cannot afford business as usual. We need a human rescue package, not just a financial rescue package — and we need a new rapid response capability to make sure the money gets quickly to where it is most needed,” said Zoellick.

“Already 100 million people have been driven into poverty as a result of high food and fuel prices, and we estimate that a one percent decline in developing country growth rates will trap 20 million more people in poverty,” Zoellick said.