The World Bank is substantially increasing its financing for countries in response to the global economic crisis, according to Vinod Thomas and Marvin Taylor-Dormond of the World Bank’s Independent Evaluation Group. A major problem for Africa has been the fall-off in private financial flows to developing countries from $1,200 billion on 2007 to $360 billion on 2009, and the poorer developing countries face as $12 billion financing gap.
To get economic growth back on track, it is essential to restart the private financial flows. It is also important that government fiscal stimulus spending be handled well, with spending directed to high-productivity areas such as key infrastructure projects and skills enhancement. Very few governments are actually doing the important work of analysing, tracking and evaluating project costs and benefits.
Unfortunately the countries which have the greatest poverty often have the governments and financial systems which are least equipped to deal skilfully with difficult economic situations. The World Bank can lend countries as much money as it likes, but life for the poorest people in the world will not improve until the systemic factors which keep them poor are removed.