Africa did not cause the financial crisis–Marwan Muasher

As a result of the economic downturn, an additional 55 to 90 million people will be trapped in extreme poverty in 2009, with the number of hungry people expected to soar past one billion. To speed recovery, the world must learn from past mistakes and make sure that the interests of the poor are high on the financial crisis agenda. Before the financial crisis Africa had made great progress, with a robust growth rate of 4.9% in 2008. Many had hoped initially that the financial crisis would have a limited impact in the continent. But African countries are now feeling the full effect of the rapid declines in remittances, commodity prices, exports and private capital which had all been important ingredients in the gains made against poverty in previous years. We now estimate that Africa’s growth will dramatically slow to only 1.7 % in 2009. These dry statistics hide the human cost of the crisis: the Millennium Development Goals, key global benchmarks for hunger, child and maternal mortality, education, and progress in combating HIV/AIDS, malaria and other major diseases, will be much harder to reach. The World Bank Group, and others, moved in last year to help address the twin shocks of fuel-and-food crisis with food-for-work programs, distribution of seed and fertilizers, maternal and child nutrition programs, and a range of other initiatives. Now attention has turned to mitigating the impact on the poor of the global crisis and laying the foundation for renewed growth. Under the leadership of Robert B. Zoellick, the World Bank Group has stepped up to the challenges. The Bank is positioned to triple our lending to $100 billion over three years. We are also fast-tracking our interest free loans and grants to the 78 poorest countries, many of which are in sub-Saharan Africa. Infusing all of our work is a strong recognition that we must act now to help the poor. President Zoellick has called for rich countries to devote 0.7% of stimulus bailouts to a Vulnerability Fund. The World Bank Group, the United Nations, regional development banks, bilateral aid agencies and civil society organizations could manage and deliver these funds quickly and flexibly, coupled with safeguards to make sure the money is spent well. We are working closely with Rwanda on issues that are critical to growth and poverty alleviation such as food production, energy security, and regional interconnections. For example, we supported Rwanda in providing farmers with fertilizers, enabling wheat and maize farmers to boost yields, leading to record 15 percent growth in the agricultural sector last year. President Kagame recently wrote that entrepreneurship is a key part of growing and strengthening societies. This is indeed a major thrust of our partnership with Rwanda. The World Bank’s private sector arm, the International Finance Corporation (IFC) is supporting Rwandan entrepreneurs, particularly women entrepreneurs, gain access to funding that is increasingly hard to find due to the credit crunch. Education is critical to building a knowledge-based economy that is at the center of Rwanda’s Vision 2020. The IFC has invested $4.8 million to help local banks finance construction of private schools. An efficient, modern banking system will help that vision, and the Bank’s Multilateral Investment Guarantee Agency (MIGA) is helping modernize Rwandan banking with more ATMs, by recently providing a $9.5 million guarantee to help recapitalize Rwanda’s electronic payment service provider. Expanding the voice of developing countries in shaping the global development agenda is an urgent imperative, and not only at a time of crisis. The World Bank recently added a third seat for Africa on our Board. And we’re increasing voting power for smaller countries in our institutions. As we move towards our second phase of reforms, we will continue to expand the voice and participation of developing countries in a consultative and inclusive manner. Africa did not cause the financial crisis, and Africa must be supported in its effort to weather its impact and protect the progress it had achieved in the previous decade. Its voice must be heard. If the global community is wise, it will see Africa’s continued growth as key to the global rebound. Rwanda and Africa are integral to the World Bank’s development mission. Together, we can chart a future of hope and opportunity. The author is a Senior Vice President for External Affairs, communications and UN affairs.

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Africa did not cause the financial crisis–Marwan Muasher