WASHINGTON (AFP) – The International Monetary Fund and World Bank were to focus in talks Sunday on aid to developing countries battered by the global financial crisis that is pushing millions more into poverty.
Topping the agenda of a meeting of the joint IMF-World Bank development committee was the fallout from the crisis that began in the advanced economies but which is now hitting the most vulnerable countries.
The global economic crisis means up to 90 million more people will remain trapped in extreme poverty this year while the chronically hungry could top one billion, according to a World Bank/IMF report released Friday.
Reforms to give the developing world a greater voice and participation in the 185-nation institutions, traditionally dominated by the United States and other major advanced economies, also were expected to be discussed.
The meeting comes on the second and final day of the spring meetings of the IMF and its sister institution the World Bank, held under tight security at their headquarters just blocks from the White House in Washington.
On Saturday, the IMF, which underpins global financial stability, said it was time to talk about exit strategies since all members now endorsed stimulus measures taken to combat the global financial crisis and the need to clean up banks’ bad assets.
“Everybody is happy with what has been done on fiscal stimulus … all agree on the absolute necessity of cleansing the financial system,” the head of the International Monetary Fund, Dominique Strauss-Kahn said at a news conference.
He said there were substantial differences, however, over what steps should be taken to prepare for the economic upturn on the other side of the crisis, adding that countries needed to have a view three to four years ahead.
Some wanted to discuss the issue later but “our point of view is that (the) exit strategy view has to be taken into account as soon as possible,” the former French finance minister told a news conference.
The IMF earlier this week sharply downgraded growth forecasts, saying it now sees the global economy contracting by 1.3 percent this year before returning to growth of 1.9 percent in 2010.