World Bank President Sees China Spurring Global Recovery.

"China's stellar growth could help pull the world out of its current economic slump, World Bank President Robert Zoellick said Monday, while hailing the yuan's progress toward becoming a global reserve currency. With Chinese growth in the first quarter of 2009 exceeding most expectations, Zoellick said China could act as a catalyst for a global economic resurgence...." [Dow Jones/Factiva]

AFP adds that "... 'Any forecast in this environment is hazardous, but I think China is likely to surprise on the upside,' the former US trade envoy said....'By and large (China's growth) has not only been a stabilizing force, but a force that will pull the system (out of the downturn).' China's meteoric rise as a global economic player has boosted world trade in manufactured goods and provided western companies with an enormous new market for their products and services...." [Agence France Presse/Factiva]

Reuters adds that "...when asked in a question-and-answer session whether China might decrease its purchases of US treasuries, Zoellick warned against any abrupt, unilateral moves that could worsen an already fragile global financial situation. 'Over time, I think I could see China moving further in diversification of its reserves, but one has to recall that China has been very sensitive about maintaining its exchange rate versus the dollar and you can't do that unless you're buying dollars, and if you're buying dollars you're going to be holding dollar securities,' Zoellick said at [the International Economic Forum of the Americas] in Montreal...." [Reuters/Factiva]

Poor Nations Desperate For Cash, World Bank Says

In an interview with the Globe and Mail, World Bank President Robert Zoellick says "... 'If the demand for our lending stays at the pace it looks like it is going to be at, it is more likely than not that we will need some sort of increase.'... Zoellick acknowledged that it's 'a challenge' to get the developed countries to consider the needs of others at the same time their own unemployment rates and debt levels are fast rising.

Demand for World Bank loans over the next year or more appears likely to be 'very, very high' because the ripples from the global recession are only now being seriously felt in Africa and other poorer regions.... 'In sub-Saharan Africa, you have no cushion,' Zoellick said. 'The harsh reality is they will feed the boy before the girl, that if they have some ability to keep someone in school, they will keep the boy and not the girl.'...

The bank's trade finance fund... is still short of the G20's goal by about $1.5-billion, Zoellick said. The idea is to raise pledges of about $5-billion to finance trade worth $50-billion over the next three years.... 'We need to build multiple poles of growth,' Zoellick said...." [Globe and Mail (Canada, 6/7)/Factiva]

World Bank Lending Poland $3.75 Billion For Reforms.

"The World Bank is lending Poland a total of $3.75 billion, in three tranches, to help the country finance its structural reforms, the bank said in a statement Monday. Last December, the World Bank and Poland signed an agreement on the first tranche of the Development Policy Loan, and the parties are in talks on details for tranches two and three, said World Bank spokeswoman Anna Kowalczyk. 'We expect to pay out the second tranche this year,' she added...." [Dow Jones/Factiva]

Polish News Bulletin adds that "...during his visit to Warsaw, World Bank President Robert Zoellick...met with Polish central bank (NBP) head Slawomir Skrzypek and Finance Minister Jacek Rostowski. 'We discussed loans which would not be granted directly to the government, but the government would issue guarantees for them. One particularly important such initiative would be an around $500 million loan for PKO BP, the aim of which would be to enhance the development of small and medium businesses,' he said...." [Polish News Bulletin/Factiva]

In related news, FT writes that "...Poland's external financing needs are much smaller than previously thought, according to a new study by the country's central bank .... In a report released on Monday, the central bank concluded that external debt due this year comes to $86.6 billion.... Zoellick said, 'The most recent numbers show that Poland has held up better than others, in part because of consumer spending.'..." [Financial Times/Factiva]

World Bank Head: Global Growth May Resume Late '09.

"The pace of decline in the global economy is set to slow and it could see resumed growth as early as late 2009, World Bank President Robert Zoellick said on Monday....'My sense is that, while we will still have declines, the rate of the declines (in the global economy) will lessen,' Zoellick said...." [Reuters/Factiva]

EFE adds that Zoellick "...rejected the predictions of some experts that economic recovery is delayed until 2011....Zoellick said that the collapse of the world economy 'is losing its rhythm' but emphasized that the crisis is day-by-day and recognized that there continues to be financial 'uncertainty'...." [EFE/Factiva]

La Republica writes that in addition "...Zoellick said that growth in China could be better than expected thanks to government measures to stimulate demand.... [In Eastern and central Europe,] 'in the short term, the crisis will dry up foreign direct investment' Zoellick said ...." [La Republica (Colombia)/Factiva]

World Bank's Zoellick Cautious On Global Outlook.

"There is still a high degree of uncertainty regarding the outlook for the global economy... World Bank President Robert Zoellick said on Tuesday. Speaking at the start of a two-day International Finance Corporation (IFC) conference on global private equity, Zoellick said views on the world economy's health ranged from cautious optimism that the pace of decline was slowing to lingering concerns over low capacity utilization...." [Reuters/Factiva]

Dow Jones adds that "...still, Zoellick noted 'sighs of relief' among global leaders he has met with recently about signs that the global crisis may be easing. In particular, China's economy may 'surprise to the upside,' he said. Risks to the world economy include the need to fix financial sectors, Eastern and Central Europe, protectionism, tighter financing for the private sector, and unforeseen events like the swine flu, [Zoellick added]...." [Dow Jones/Factiva]

The Chosun Ilbo writes that Zoellick said "... 'China acted quite quickly and aggressively to stimulate demand, and has had some pretty good first quarter numbers.' [He added that] when you examine the numbers closely, the good news from China results mainly from government spending, and it remains to be seen when the country's private sector will boost its investments again...." [The Chosun Ilbo (South Korea)]

US Lawmakers Back Increased Funding For IMF

Lawmakers on Wednesday said they support US Treasury Secretary Timothy Geithner's call to significantly increase funding for the International Monetary Fund (IMF). Senate Foreign Relations Committee Chairman Senator John Kerry said there was bipartisan support on the panel for providing additional resources. He spoke at a press conference following a meeting with IMF Managing Director Dominique Strauss-Kahn and World Bank President Robert Zoellick.

The US share of the IMF's New Arrangements to Borrow (NAB) is about 20 percent, meaning the US could contribute about $100 billion to the facility under the proposed expansion. In addition, Kerry said there was general agreement at the committee meeting for some amount of increase in IMF funding.

Strauss-Kahn said he supports not only the increase in resources but also more voting power within the IMF for emerging economies. Zoellick expressed concern about trade protectionism and warned senators about the negative effects of countries restricting imports. 'The danger of protectionism, whether of a creeping or overt type, would really make a situation that is very bad much worse,' said Zoellick.

World Bank Says Global Economy To Shrink 1-2 Percent

The global economy is on track for its worst recession since the 1930s with output likely to shrink by 1-2 percent this year, World Bank President Robert Zoellick told the Daily Mail newspaper. Central and eastern European countries were particularly vulnerable, he said, urging rich nations to do more to fill the financing gap left by an exodus of capital from the developing world.

The Daily Mail writes in an interview with Zoellick that when Zoellick looks across the horizon he sees mounting problems for both the industrialized and developing world. The global economic meltdown is costing lives. He says: "Our estimates are that because of the drop in growth, another 200,000 to 400,000 children will die each year. So that is certainly the wrong direction".

As matters stand, Zoellick is doing all in his power to try and fill the financing gap for the developing world left by the withdrawal of frightened bankers from the global capital markets. "We have about an extra $100 billion of lending to countries that are qualified to borrow, but these are not the very poorest countries". Zoellick also wants to gear up lending through the Bank's concessional arm, the International Development Association (IDA) "We have $42 billion for the 80 poorest countries... we are trying to front load that as much as possible"