October 14, 2008	Tuesday	Shawwal 14, 1429

WASHINGTON, Oct 13: The World Bank and the International Monetary Fund have warned that the current financial crisis could do permanent damage to developing countries and have offered to help them deal with it.

“The poorest and most vulnerable groups risk the most serious — and in some cases permanent — damage,” said a communiqué issued after the meeting of the Development Committee of the bank and the IMF.

The committee offered to help developing countries strengthen their economies, bolster their financial systems, maintain growth and to help protect the poor.

“Developing and transition countries could suffer serious consequences from any prolonged tightening of credit or sustained global slowdown,” the communiqué said. “We are concerned by the impact of the turmoil in world financial markets and the continued high prices of fuel and food.”

Member countries also agreed to take “comprehensive and cooperative measures” to restore financial stability and the orderly functioning of credit markets.

The financial crisis “has been a manmade catastrophe. The actions and responses to overcome it lie in our hands,” said World Bank president Robert Zoellick.

He noted that as the current crisis 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,” Mr Zoellick said. “We need to take them seriously.”

The communiqué said the World Bank Group and the IMF must help address these critical challenges, in particular the impact on developing countries, and draw lessons from the current crises.

“It will be crucial to maintain a focus on support for sustainable growth, poverty reduction, and the achievement of the Millennium Development Goals,” it added.

“Developing countries, many of them already hit hard by high prices for energy and essential foodstuffs, risk very serious setbacks to their efforts to improve the lives of their populations from any prolonged tightening of credit or a sustained global slowdown,” Mr Zoellick told a press conference.

“The poorest and most vulnerable groups risk the most serious – and in some cases permanent – damage. One hundred million people have already been driven into poverty this year and that number will grow,” he warned.

IMF managing director Dominique Strauss-Kahn said the world should not forget the other crisis of rising food and energy prices in poor countries.