Asia's financial and economic crisis has forced the World Bank to increase lending to record levels last year, according to its annual report.
With more than 20 million people falling into poverty - defined as an income of less than $1 a day - in Indonesia and Thailand alone, the bank has been forced to a dramatic intervention. Up to July this year, it pledged £19.32 billion to developing countries, up from £12.93 billion in 1997.
Most of the money was earmarked for East Asia to help governments rebuild their shattered economies and avoid the worst extremes of poverty. South Korea alone claimed £3.4 billion of the £10.8 billion pledged to the region.
"What started as a financial crisis in Asia has spread to other sectors and other regions like a contagion," commented Mr Tim Cullen, a senior World Bank adviser who presented the report in Dublin yesterday.
Mr Cullen said the record level of loan commitments reflected a rapid response by the bank to the East Asia crisis, support for stronger economic performance by many African countries and a strong rebound in lending for the social sectors.
Increasingly, he added, bank spending was being targeted on the poor; 40 per cent of total investment last year went on education, health, nutrition and social projects.
Much of this investment is directed towards Africa, where the opportunities for development are greater than they have been for many years. For the third year in a row, the average country in the region experienced positive growth and 21 countries grew at 5 per cent or more.
Mr Cullen welcomed the decision by the Government to contribute to the World Bank and International Monetary Fund initiative on Third World debt. The Minister for Finance, Mr McCreevy, and the Minister for Foreign Affairs, Mr Andrews, last week announced a £31 million package of debt relief for developing countries.
"This is the kind of initiative we have been asking the industrialised countries to get involved in, so Ireland's contribution is very timely." The bank's report stresses the internal changes which have been made to make it more flexible, people-oriented and responsive. Earlier this week, the British prime minister, Mr Tony Blair, set a 12-month deadline for the reform of the World Bank and the IMF. The question of reform of the Bretton Woods organisations is expected to dominate the upcoming annual meetings of both organisations in Washington.
Among the changes Mr Cullen pointed to were a more rapid assessment of projects, the introduction of more flexible lending instruments and greater partnerships with outside partners.
The World Bank, which consists of the International Bank for Reconstruction and Development (IBRD) and the International Development Association, was founded in 1948 to alleviate poverty in borrower countries. The IRBD is owned by the governments of 181 governments. Ireland used to borrow money from the bank, but no longer needs to do so.
