UPDATE 2-Don't leave poor behind, World Bank chief tells G20

Wed Sep 16, 2009 2:06pm EDT

* World Bank says G20 must not leave behind world's poor

* 43 poor countries still mired in an economic downturn

* Poor countries face external finance gap of $59 bln (Adds details from conference call)

By Lesley Wroughton

WASHINGTON, Sept 16 (Reuters) - World Bank President Robert Zoellick on Wednesday called on Group of 20 leaders, meeting in Pittsburgh next week, not to leave the poorest countries behind as they focus on ways to keep the global recovery going.

A new World Bank report shows that more than 40 poor countries are still mired in an economic downturn and struggling to finance key needs such as health and education despite signs of recovery in some industrialized and emerging economies.

"We're entering a new danger zone, not of freefall, but of complacency," Zoellick told a conference call with reporters. "While some are moving toward the exits, many are still many being left behind (in) the burning house," he added.

"Pittsburgh can be an opportunity to build a responsible globalization," Zoellick said.

The G20 summit could help put in place incentives to help developing countries grow productivity, investment and energy -- all linked to regional and global trade.

But Zoellick said there were many countries that were being left behind because they have little ability -- and few resources -- to help themselves.

For these countries, Zoellick said the G20 should authorize a new emergency facility, that could operate alongside the World Bank's existing fund for the world's poorest countries, to help them weather global economic shocks.

The World Bank report said the nascent global economic recovery and improving financial market conditions have yet to provide the impetus needed to lift the world's poorest countries out of their deep economic downturn.

Without budgetary resources to respond to the crisis, essential spending, including for health and education, may face a funding gap of $11.6 billion in 2009 due to revenue shortfalls and increased demand for social protection, the Bank said.

Overall, the World Bank said there were 43 poor countries still at risk and struggling with the effects from the sharp drop in trade, capital flows, tourism and worker remittances.

It estimated that low-income countries will face external financing needs of about $59 billion in 2009.

Zoellick also urged the G20 to finalize a U.S.-hatched plan to increase investment $20 billion in agriculture in developing countries, approved by industrial countries in July.

"We have the pledges but good intentions need to be quickly operationalized and implemented," he said, adding that the World Bank could play a facilitating role to ensure that programs are coordinated and poor farmers aren't sidelined.

"We're suggesting that we can help in terms of trying to manage the fiduciary responsibilities for financing," he added.

Zoellick also called for a renewed global commitment to combat corruption, including increased efforts to recover an estimated $20 billion to $40 billion in assets stolen from developing countries.

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