“The poorest and most vulnerable groups risk the most serious, and in some cases, permanent damage,” Robert Zoellick, the head of the World Bank, told reporters.
“This has been a man-made catastrophe. The actions and responses to overcome it lie in all our hands.”
He said the IMF and World Bank would try to ensure that aid donors keep to their commitments to boost overseas assistance while they battle economic problems on the home front.
“Developing countries … risk very serious setbacks to their efforts to improve the lives of their populations from any prolonged tightening of credit or a sustained global slowdown.”
The World Bank said it had the capacity to “comfortably double” lending to the developing world while the IMF said it was ready to respond with a $200bn war chest.
It also outlined plans for new energy and lending programmes to help developing nations and called for global co-operation.
Over the weekend the IMF warned that the world’s financial system was nearing a meltdown.
Sharp hikes in food and fuel prices have caused 75 million more people to go hungry, the Food and Agriculture Organisation said.
|Millions of people are already going hungry in poor countries [Reuters]|
With donor aid programmes under pressure due to the financial crisis, the World Bank estimates that up to 100 hundred million people could be pushed into poverty.
The Development Committee was picking up on complaints that a prolonged global downturn will have serious setbacks to developmental programmes in many poor countries.
Finance ministers from developing countries have also accused wealthier nations of being selfish.
P Chidambaram, the Indian finance minister, said poorer countries could be hit twice by the crisis: falling demand for their exports and problems in getting funding.
“The developing countries will suffer for no fault of theirs. They did not cause the contagion. Many are not well-equipped to face the consequences,” he said.
At a separate news conference on Highly Indebted Poor Countries, David Carew, Sierra Leone’s finance minister, said the plight of the weakest has been “largely forgotten”.
He said Africa did not have the “capacity for intervention” that banks in the developed world had, adding: “The ripple effect of the crisis is coming … likely later this year.”
On Saturday the International Finance Corp, the IMF’s private-sector lender, said it planned a $3bn fund to help recapitalise small banks hit in developing nations.
‘Crisis to a crisis’
Dominique Strauss-Kahn, the head of the IMF, said on Sunday that “the financial crisis adds a crisis to a crisis”.
“I hope that in a few weeks, the peak at least of the financial crisis will be behind us, but the other crisis, the crisis faced by poor countries, low income countries, even emerging countries, will still be here and that’s the reason we shouldn’t forget it.
“We should not forget this other crisis,” he said on Sunday.
But charity group Oxfam was very critical of the IMF and World Bank meetings which it said “offered shamefully few new solutions” to the world’s poorest countries.
“World leaders acknowledged there is a global poverty crisis but they’ve failed to address it,” Marita Hutjes, an Oxfam spokeswoman, said.
“We needed to see real action for poor countries … instead developing countries’ problems were sidelined… It is still not clear how poor countries will be helped to deal with the credit crunch.”