A senior economist at the World Bank says international agencies dealing with the financial crisis in Asia exacerbated some of the problems with their initial prescriptions of what was needed.

The official, Dipak Dasgupta, said the higher interest rates recommended had failed to stabilise currencies and had added to the downward pressures on economies.

Speaking in Hong Kong at the presentation of the Bank's latest report on economic prospects, Mr Dasgupta said the primary focus now should be on restoring domestic demand and expanding social safety nets.

The report says the economic situation facing developing countries is the worst for twenty years, with the incomes of a quarter of the developing world's population falling -- a problem exacerbated by a decline in prices for raw materials.