Zoellick Sees Economic Risks From Food Prices, Debt, Inflation
World Bank President Robert Zoellick said the global economy faces risks from inflation, sovereign-debt woes and rising food and energy prices.
“The world is coming out of one crisis, the financial and economic crisis, but we are facing other risks and tumultuous changes,” Zoellick told reporters on a conference call in Washington today. Europe’s debt crisis, repeated natural disasters and political turmoil in the Middle East all pose risks to the recovery, even as emerging markets face rising inflation and a risk of overheating, he said.
Zoellick urged the Group of 20 nations to take action to shore up the economy and curb rising hunger. “This is not a time for complacency,” Zoellick said. “The best way for the G- 20 to show it’s alive and active is to do things.”
The Washington-based World Bank is planning ways to help African countries in the midst of political transition, like Tunisia, Egypt and the Ivory Coast, Zoellick told reporters. The bank’s financial arm, the International Finance Corp., will meet this week with multilateral development banks on the agenda.
For Tunisia, the World Bank is putting forward $500 million that could combine with up to $700 million in aid from the African Development Bank and other nations, Zoellick said. Zoellick added he is planning a trip to Tunisia next month and will meet with Ivory Coast’s finance minister this week.
The World Bank will be looking at short-term aid measures for the Ivory Coast as well as longer-term issues like debt relief, Zoellick said. And for Egypt, Zoellick called for cooperation on ways to help its economy.
Egypt can’t afford to return to the “old, failed ways” of a government-driven economy, Zoellick said. The country needs new ways to create jobs and use aid, rather than using old models that “blow a hole in budgets and won’t be sustainable,” he said.
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