WORLD BANK president Robert Zoellick has called for urgent reform of the global system for development aid, arguing that such a project should place development "on a par" with international finance.
In an address to the World Bank/IMF annual meeting in Washington, he warned that the international financial crisis could bring many developing countries to a "tipping point" this month.
International development aid was not keeping pace with the increase in need for such assistance, he said. "A drop in exports, as well as capital inflow, will trigger a fall-off in investments.
"Deceleration of growth and deteriorating financing conditions will trigger business failures and increase the risk of banking emergencies. Some countries will slip toward balance of payments crises. As is always the case, the poor are the most defenceless."
A flexible network, not a fixed system, was required to maximise the efforts of public and private groups, profit-making companies and non-government bodies.
"We have seen the dark side of global connectedness. We need to navigate toward the light. The first task will be to overhaul the failed system of financial regulation," he said. "The new multilateralism must put global development on a par with international finance."
IMF chief Dominique Strauss-Kahn said governments must act quickly, comprehensively and co-operatively if they are to emerge from the crisis with "economies and our societies intact".
Praising collective action on Sunday by euro zone governments, he said international co-operation had not been good enough. "Until this weekend, the collapse in confidence in the markets has been almost matched by a collapse in confidence between countries. We saw a very bad trend toward unilateral measures taken with national interests in mind," he said.
