WORLD BANK, IMF TO PROTECT POOR COUNTRIES / RP ECONOMY WON'T CRASH
WASHINGTON, October 13, 2008 (MSNBC from the ASSOCIATED PRESS) The World Bank agreed Sunday to help developing countries strengthen their economies, bolster their financial systems and protect the poor against the financial turmoil in international markets.
Robert Zoellick, the bank's president, said the contagion affecting the global economy "has been a manmade catastrophe and responses to overcome it lie in all our hands."
He spoke as the U.S. moved to shore up Wall Street and financial institutions and the 15 countries that use the euro agreed in Paris to temporarily guarantee bank refinancing to ease the credit squeeze.
Speaking at a joint news conference with Zoellick, Dominique Strauss-Kahn, the head of the International Monetary Fund, endorsed the European move and said he expected markets to react favourably, "although you never can be sure what will happen."
Strauss-Kahn also called for quick implementation of the $700 billion U.S. rescue plan, which includes the government buying part-ownership in an array of banks.
Zoellick said that as the current crisis has unfolded, people in the United States and Europe reacted first with confusion, then anger, then fear.
"Those natural reactions will spread around the world as the impact spreads," Zoellick said. "We need to take them seriously."
He said any prolonged tightening of credit or a sustained global slowdown could cause serious setbacks to developing countries' efforts to improve the lives of their populations. Such countries are already struggling with high prices for energy and food.
"The poorest and must vulnerable groups risk the most serious - and in some cases, permanent - damage," Zoellick said. "One hundred million people have already been driven into poverty this year and that number will grow."
Zoellick said the financial crisis underscored the need for "concerted global action now, not just to deal with the crisis but to put in place new architecture, new norms and new oversight to ensure that this crisis never happens again."
He said the bank and the IMF must ensure that as governments turn their attention to domestic matters, they do not step back from their commitment to provide billions in aid to poor countries.
"Aid flows must be maintained," Zoellick said. "Today's meeting of ministers was unanimous in that regard."
RP economy may slow down but not crash – NEDA Monday, October 13, 2008
(STAR) A high-ranking official of the National Economic and Development Authority (NEDA) said yesterday that there is no need to panic amid the global financial crisis.
Augusto Santos, NEDA deputy director general, said the country’s economy may slow down, but there is no chance of a crash.
Santos appealed for calm as he predicted workers would still get their bonuses this Christmas.
“There is really no cause for panic,” Santos said on local ANC television. “The moment that people panic, that will make the situation worse.
We will still have positive economic growth. It will contract, but it will not go negative.”
He said the government was working on a contingency plan for overseas-based Filipino workers who may be affected by the global financial crisis.
The local economy has for years relied on the country’s estimated eight million workers abroad sending money home.
Last week, economic experts said Philippine economic growth would likely fall to 4.3 percent this year and 4.2 percent in 2009.
The economy, however, grew 7.2 percent last year, the highest in 30 years, the government said.
No need for assistance Malacañang said there is also no need for the country to seek the assistance of the International Monetary Fund (IMF), which earlier expressed willingness to lend to distressed countries.
The IMF last week said it was ready to give financial aid to countries in distress.
Press Secretary Jesus Dureza said while the Philippines would certainly be affected by the global economic slowdown, the economy remains strong enough to withstand external shocks.
“I don’t think there is a need for us to do that (tap into IMF assistance),” Dureza told dzRB. “Actually, we have already graduated from the IMF so I don’t think we want to return to that.”
The Philippines paid in 2006 all its obligations to the IMF.
“We have gone through that when we were in the ICU (intensive care unit), so to speak, but we are now in good health,” Dureza said.
He said it was “ironic” that the developed economies are now looking at the IMF for help when the institution was set up for least developed or developing countries.
He said while developed economies, including the US, are showing signs of recession, the Philippines is still expected to post growth this year and next.
He said the government is also doing its best to shield the country from the global economic crisis, especially that “financial transactions are connected in the global village.”
He noted the local stock market’s reaction to developments in other bourses around the world.
“We should be preparing for worst case scenarios and everybody should pitch in,” Dureza said. “But we also should be feeling a little confident that our country has prepared in advance. We did not expect it to be this bad, but the President has taken initiatives before that were criticized but now it is serving us in good stead.” – Paolo Romero
Chief News Editor: Sol Jose Vanzi
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