Ongoing turmoil in Middle Eastern countries will not trigger another global financial crisis, World Bank President Robert Zoellick said on Monday, adding that the impact should be limited to rising oil prices. "I think the effect in the macroeconomy is more oil prices and there you have prices that have increased because of risk and uncertainty," Zoellick told Reuters on the sidelines of a conference on ageing global populations.
The wave of popular uprisings across North Africa and the Middle East has sparked fears of oil supply constraints, pushing up prices to over $100 a barrel. Analysts polled last week by Reuters forecast crude will remain above $100 a barrel through 2013. Economists have voiced fears that rising energy costs will fuel higher inflation, weighing on consumer spending and undermining a still-fragile global recovery. However, Zoellick said the upheavals in the Middle East offered economic opportunities for those countries affected, as well as creating global risks.
"You're going to be dealing with political transitions that are going to run for a long time. And you're going to have social and economic transitions as part of that," he said. "Part of the challenge will be: how do we lean forward to help but help in a way that makes it sustainable and develops opportunity over time," he added.
Despite the market uncertainty and the ongoing political turmoil, developed nations will be discussing how to spur economic growth in the Middle East through trade, such as encouraging more exports of agricultural products or basic manufactured goods, Zoellick said. The World Bank is meeting other multilateral lenders over the possibility of sending aid to North African countries in the wake of the unrest, he added.
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