World Bank may need more resources: Zoellick
SANTIAGO (Reuters) - World Bank President Robert Zoellick said on Thursday the poverty-fighting institution may need to raise additional resources if lending remains at record levels as countries try to combat the global recession.
"We started the crisis with a strong capital base, so we've been able to safely expand lending quite quickly, and I expect the demands next year to be at least as great," Zoellick said before a meeting of finance ministers from the Americas in Chile.
"If we continue lending at this pace we'll need to look, just as some of the regional development banks, about ways to augment our financial resources.
On Wednesday, the bank said its lending soared 54 percent to a record $59 billion in the fiscal year that ended June 30.
Commitments from the World Bank's fund that assists 79 of the world's poorest countries, the International Development Association (IDA), rose 25 percent to $14 billion from $11.2 billion in the previous fiscal year.
One way of increasing resources, especially for the bank's poorest borrowers, would be to summon an early meeting of 40 large donor countries to replenish IDA, which provides low-cost loans and grants for the world's poorest.
With its AAA-credit rating the World Bank could also try and raise funding on global credit markets.
Zoellick said he has talked with the World Bank board about options "including the possibility of a special capital increase that might be related to increasing the voice and voting share of developing countries."
The World Bank and its sister agency, the International Monetary Fund, are looking to increase the role and influence of emerging market economies by increasing their quota subscriptions, which generate finance resources for the institutions.
DEALING WITH THE CRISIS
Zoellick said Chile can be seen as an example of smart policies that other countries could follow. It saved up cash when copper prices were high and is using its savings to finance an economic stimulus package.
He also praised Peru, Colombia, Mexico and Brazil for having sound economic policies.
But he said the crisis is not over.
"The world financial markets have broken the fall and you see some signs of recovery but the world economy still faces significant uncertainty," he said.
Those risks include rising unemployment, protectionism, and financing gaps in some developing countries, among others.
"The financing needs of developing countries in this crisis remain very large. We estimate that the financing gap globally for developing countries in 2009 ranges between 350 billion and 635 billion dollars," he said.
(Reporting by Terry Wade; Writing by Kevin Gray; Editing by Kenneth Barry and Leslie Adler)
