IMF, World Bank Members Mull Third World Aid

Ngozi Okonjo-Iwela of Nigeria is a managing director of the World Bank.

RAY SUAREZ: What kind of problems are developing economies having because of the global financial crisis?

NGOZI OKONJO-IWELA, managing director, World Bank: Well, the developing economies have to be looked at in several ways in this crisis. There are some of them, the emerging market countries, particularly in Eastern Europe, whose financial systems were hit in much the same way as you see in the developed countries, in the first wave, because of the strong linkages of their banking systems to those in Western Europe.

So they saw an immediate transmission of the crisis to their banking systems. And so the monies being asked for would help to stabilize, recapitalize, and steady their banking systems in much the same way that is being looked at either in the U.S. or Western Europe, and also help to stimulate their economies.

This weekend, ministers will discuss how to secure those funds, says Simon Johnson, a former chief economist for the IMF, but that's just the first step.

SIMON JOHNSON, MIT Sloan School of Management: But the question is going to be not "Can they come up with the cash?" but "Can they deploy it? Can they use it in a way that actually stabilizes the world, that stabilizes individual countries in Eastern Europe, or changes attitudes in Asia, for example, towards the world trading system?" That's going to be the difficult question.

RAY SUAREZ: Even before the latest meetings, emerging economies, like Latvia's, have already asked the IMF for emergency loans. Einars Repse is Latvia's finance minister.

EINARS REPSE, finance minister, Latvia: The economic situation is deteriorating. Our GDP fall this year is expected to exceed 12 percent.

RAY SUAREZ: So Latvia asked for some help. The money will initially be used to simply bolster the government's capital reserves, but Repse says there's a reason the loan was important.

EINARS REPSE: It will be more as a safety deposit in case we need to strengthen liquidity of our banking system.

SIMON JOHNSON: They're also trying to provide money to high-performing countries, so-called -- or you could call them the platinum club. Mexico has come in. Poland has come in. Colombia has come in, all countries with good policies who could use this as a cushion to, let's say, do a little bit more fiscal stimulus, have less contractionary policies, and generally, you know, buffer themselves against the world's tumult.

Now, this is all a beginning. This is relatively small scale. It's not at the level of being able to move the world economy dramatically to a different place, but it's helpful.

RAY SUAREZ: The United States remains a central force in the global effort to shape a response to the financial crisis.

So today, Treasury Secretary Timothy Geithner held a conference here at the Treasury Department, bringing together the seven largest industrial economies. He had a message for them: Live up to your commitments to fund the emergency response and reform the global finance system.

TREASURY SECRETARY TIMOTHY GEITHNER: It is very important that we deliver on these commitments to mobilize additional resources for the IMF and the World Bank and the regional development banks and important for them to deploy those resources in ways that are directly relevant to, and particularly helpful to, address the challenges in emerging and developing countries.

Recovery in the United States depends significantly on establishing recovery in those large and previously rapidly growing markets.