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World Bank to fast-track $2 bln to poor countries

DHAKA - The World Bank has unveiled a $2 billion ‘fast-track facility’ to help for the world’s poorest countries cope with the worst global financial crisis since the 1930s. The move will speed up grants and long-term, interest free loans to 78 of the world’s poorest nations, the bank said.

The World Bank’s 2009 Global Economic Prospects report forecast world growth would weaken to 0.9 percent next year from 2.5 percent in 2008, with simultaneous recessions in the United States, Western Europe and Japan.

The spreading economic downturn will dramatically slow the growth of the past decade in the developing world to 4.5 percent, down from 6.3 percent in 2008 and 7.9 percent in 2007.

‘The poorest people will be hit the hardest by the crisis that is likely to get worse next year,’ a bank statement quoted its president, Robert B. Zoellick, as saying.

‘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 new facility would fast-track an initial $2 billion from the $42 billion the bank’s International Development Association plans to make available to poor countries over the next three years.

The World Bank said the global economic recession will cause commodity prices to drop further, but remain well above the low levels of the 1990s because of growth in developing countries.

‘Already 100 million people have been driven into poverty as a result of high food and fuel prices, and we estimate that a 1 percent decline in developing country growth rates will trap 20 million more people in poverty,’ said Zoellick.