Worldwide problem in 2009

The president of the World Bank warned Thursday of a worldwide struggle in the first half of 2009 as a deepening global economic crisis hits Asian countries.

Robert Zoellick also cautioned against a return to trade protectionism that could worsen the crisis.

Asia-Pacific region remained reasonably well-placed to weather the global slowdown but will see growth ease to 5.3 percent in 2009 from 7.0 percent this year.

It said the global economy would expand a mere 0.9 percent next year and world trade volume would fall 2.1 percent, the first drop in 26 years.

"In the discussions that I have had with people around the world, no one has a very good prediction for the length and depth of this crisis," Zoellick said.

Government monetary and fiscal policy, as well as open trade systems, will determine whether the situation can improve later next year, he said.

"Particularly I am concerned about the rising dangers of protectionism," he added, describing as "unfortunate" the difficulties encountered during the Doha Round of talks on a new global trade pact.

"The international system needs to stay on offence on trade because protectionist forces will raise their heads," he said.

The so-called Doha talks started at the end of 2001 in the Qatari capital.

They aim to boost international commerce by removing trade barriers and subsidies, but a deal has proved elusive.

Developing countries, including China and India, want the industrialised world to scrap agricultural subsidies, while Western powers are seeking greater access for their products in emerging markets.

"Whatever parties can do to try to get the Doha Round back on track would be vitally important," Zoellick said later at a dialogue session with students from a local university.

"This financial and economic and unemployment problem is serious enough.

"If we start to trigger a round of protectionism, as you saw in the 1930s, it could deepen (the global crisis)."

Pascal Lamy, the head of the World Trade Organisation (WTO), last Friday scrapped plans to hold a ministerial meeting on the trade talks, citing the "unacceptably high" risk of failure and dashing hopes that the long-delayed global trade pact could be clinched this month.

The World Bank, which provides financial and technical assistance to developing countries, said last week that healthy growth in recent years had left major economies such as China in good shape to fight the global crisis with macroeconomic measures.

But it said "in the near term, downside risks are substantial" due to recessions in developed markets.