Stay on top of the latest advancements driving our changing world.
You are here:
Business & Finance
The Great Debate
Do More With Reuters
Make Reuters My Homepage
Support (Customer Zone)
About Thomson Reuters
Developing world may need $700 billion: World Bank
Sun Mar 8, 2009 1:12pm EDT
Email | Print |
| Reprints | Single Page
By Lesley Wroughton
DAR ES SALAAM (Reuters) - Developing countries could face a financing gap of $270-$700 billion -- equivalent to the latest U.S. economic rescue package -- to help deal with the effects of the global crisis, the World Bank said Sunday.
The World Bank said even at the lower end of that estimate, resources of international institutions would not be sufficient to meet the financing needs as more and more emerging and developing countries are hit.
"Should a more pessimistic outcome occur, unmet financing needs will be enormous," the World Bank said in a paper prepared for meetings of the G20 group of countries in London in April.
The World Bank spends billions of dollars annually fighting poverty in developing countries.
Last week, the International Monetary Fund said developing countries would need $25 billion, and possibly as much as $140 billion, in 2009 to meet their financing needs.
The World Bank said the crisis threatened long-lasting repercussions for developing countries, struggling to find markets for goods as world trade volumes suffer their first annual decline since 1982, while remittances from overseas workers slow, and falling commodity prices provide less revenue for governments.
"The challenge facing developing countries is how, with fewer resources, to pursue policies that can protect or expand critical expenditures, including on social safety nets, human development and critical infrastructure," the World Bank said.
Until recently, the impact the crisis would have on developing countries was unclear. But recent data has highlighted the potential scale of the damage, prompting institutions like the World Bank and IMF to raise alarm bells.
The worry is that many developing countries will not be able to afford fiscal stimulus packages of their own and will require aid from external sources.
MATURING DEBT RISKS
More immediately, concerns are mounting as to how the rollover of maturing debt in emerging markets will be financed given the global credit crunch, especially for banks and large corporations, which will put financial pressure on governments who themselves are finding foreign capital hard to access.
The World Bank estimates well over $1 trillion in emerging market corporate debt and $2-3 trillion in total emerging market debt will mature in 2009, the majority of which reflects claims of major global banks extended cross-border or through affiliates and branches in emerging markets.
Most of this lending is in foreign currency, and for relatively short terms, meaning currency and maturity risks are primarily on the balance sheet of emerging market banks, corporate and households.
"There is mounting evidence of growing pressure on interbank lines, particularly those extended to the corporate sector. Recent evidence of rollover efforts on public debt of major corporates indeed suggests that even stronger corporates in key emerging markets are struggling," the World Bank said.
It estimated that in 2009, 104 of 129 developing countries will have current account surpluses smaller than private debt coming due. For these countries, total financing needs were expected to amount to more than $1.4 trillion during the year. Continued...
View article on single page
N.Korea vote may point to Kim successor
"Never waste a good crisis"
Secretary of State Hillary Clinton told an audience of young Europeans that the current economic crisis was a golden opportunity to take action on climate change, highlighting opportunities to rebuild greener economies. Full Article | Video
Tongue-tied Clinton gets warm EU welcome
Clinton seeks to press reset button on Russia ties
More International News
Real IRA claims shooting of British soldiers
Clinton rolls out foreign policy approach in trip
Suicide attack kills 28 at police academy in Iraq
Iran test-fires new missile: media
Sudan's Bashir threatens more expulsions in Darfur
More International News...
A selection of our best photos from the past 24 hours. Slideshow
Most Popular on Reuters
Clinton tells how she fell for Bill "long ago"
Who got AIG's bailout billions?
U.S. healthcare system pinched by nursing shortage
Mexican capo Guzman behind drug war deaths
Tongue-tied Clinton gets warm EU welcome | Video
UPDATE 2-Pressure may mount to know who got AIG bailout blns
Venezuela's Chavez turns to confrontation in crisis
In crisis, GE finds its deep bench not so magical
Next shoe to drop for U.S. job seekers: lower wages
Europe banks silent on reported AIG bailout gains
Most Popular Articles RSS Feed
Harare in shock over death
Baghdad police attacked, many killed
Clinton says Obama to visit Turkey
Is anybody out there ?
Clinton: "Never waste a good crisis"
China cooperates with U.S and U.K
Indian kids love python pets
Pro Tibet demo in London
Car bomb kills eight in Pakistan
British politician in custard attack
Most Popular Videos RSS Feed
The Great Debate
Setback for America’s pro-Israel hawks
There are signs that the influence of Washington's right-wing pro-Israel lobby might be waning under the administration of President Obama. Commentary
Follow Bernd Debusmann on Twitter
The global destination for corporate leaders, deal-makers and innovators
Knowledge to Act
Help and Contact Us |
Advertise With Us |
Interactive TV |
Reuters in Second Life |
Site Index |
Thomson Reuters Corporate:
Professional Products |
Professional Products Support |
About Thomson Reuters |
Latin America |
United Kingdom |
Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. Thomson Reuters journalists are subject to an Editorial Handbook which requires fair presentation and disclosure of relevant interests.
NYSE and AMEX quotes delayed by at least 20 minutes. Nasdaq delayed by at least 15 minutes. For a complete list of exchanges and delays, please click here.