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World Bank pledges aid
The bank agreed to protect countries that are vulnerable in the current financial turmoil.

October 12, 2008: 5:00 PM ET

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WASHINGTON (AP) -- The World Bank agreed Sunday to help developing countries strengthen their economies, bolster their financial systems, maintain growth and protect the poor against the financial turmoil roiling international markets.

The head of the bank's policy-setting committee, Mexican Finance Minister Agustin Carstens, and World Bank President Robert Zoellick announced the commitment at the end of a daylong meeting.

Zoellick said the financial crisis "has been a manmade catastrophe. The actions and responses to overcome it lie in our hands."

He said that as the current crisis has unfolded, people in the United States and Europe reacted first with confusion, then anger, then fear. "Those natural reactions will spread around the world as the impact spreads," Zoellick said. "We need to take them seriously."

He said any prolonged tightening of credit or a sustained global slowdown could cause serious setbacks to developing countries' efforts to improve the lives of their populations.

Such countries are already struggling with high prices for energy and food. "The poorest and must vulnerable groups risk the most serious -- and in some cases, permanent -- damage," Zoellick said. "One hundred million people have already been driven into poverty this year and that number will grow."

Zoellick said the financial crisis underscored the need to modernize markets for a new global economy.

He said the bank and its sister institution, the International Monetary Fund, must ensure that as developed governments turn their attention to domestic matters they do not step back from their commitment to provide billions in aid to poor countries.

"Aid flows must be maintained," Zoellick said. "Today's meeting of ministers was unanimous in that regard."

Carstens said ministers were unanimous in their view "that the World Bank had to protect the poor and vulnerable in the context of the global financial crisis." He said the Bank needs to be flexible to address the differing problems faced by poor countries and those with rapidly growing economies.