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| October 5, 2004 |
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| World Bank: Growth An Antidote to Terrorism |
WASHINGTON - October 5, 2004. World Bank president James Wolfensohn has warned that the global war against terrorism runs the risk of deflecting attention from efforts to strengthen the international recovery and reduce poverty, reports The Australian Financial Review.
"It is absolutely right that we fight terror. We must," Wolfensohn told a
joint International Monetary Fund/World Bank session. "The danger,
however, is that in our preoccupation with immediate threats, we lose
sight of the longer-term and equally urgent causes of our insecure world:
frustration and lack of hope." Wolfensohn was speaking at the annual
IMF/World Bank meeting, which is being held in the shadow of concerns
about higher oil prices and the global war on terrorism.
Meanwhile, finance ministers from leading Western economies wrangled until the last minute in their efforts to reach an agreement on debt relief for Iraq and other developing countries, but resolution of the problem proved elusive. In two days of talks, the ministers narrowed their differences between competing British and American proposals under which poorer nations have a large chunk of their debt forgiven to enable them to make a fresh start. US Treasury Secretary John Snow said America was prepared to forgive 100 percent of debt for the world's poorest countries, but the US insists that new loans be curtailed to those countries by the amount of their increased debt forgiveness. Britain, on the other hand, wants to pay for expanded debt relief by revaluing the IMF's gold reserves according to world prices, and by getting wealthy nations to commit more money.
Le Monde (France) notes that Italy and Germany have argued that their
budgetary constraints do not allow either country to do more than what
they are doing under current development aid plans. France meanwhile fears that a total cancellation of the multilateral debt could deprive developing countries of ulterior financing and reject them into a subcategory of assisted countries. Paris has observed in the American proposal of total debt cancellation, a new initiative to reform the role of the World Bank and IMF, and supports the progression of government aid to development through an international tax.
The Australian also writes that the main obstacle to progress now is the
division between the US and Britain over how to proceed. The US Treasury's
plan is to write off the debts owed by HIPC countries to the World Bank
using the funds from which the Bank currently gives concessional loans to
developing nations. Washington points out that much of this borrowing is
simply used to repay other loans. But this would help only countries in
the existing framework of highly indebted nations, and would do little to increase overall development assistance. The scheme also risks damaging the financing of the World Bank.
The Montreal Gazette (Canada) further reports that the inaction by the
world's economic powers on the "Millennium Development Goals" promised in 2000 drew a stern rebuke from Wolfensohn, who said world leaders spend too much time reviewing proposals and plans and not enough time making concrete decisions to fight poverty, improve education, and make the world a more secure place. "Without greater visible engagement by global leadership, we will not make the breakthroughs we need to ensure real security and peace," Wolfensohn said in a speech to the world's finance ministers on the final day of the World Bank and IMF annual meetings in Washington.
The Miami Herald reports that IMF and World Bank officials acknowledged
that with the notable exceptions of fast-growing China and India, most
developing countries stood little chance of achieving the millennium
goals. Although poor countries are expected to do their part by combating
corruption, lowering trade barriers, and promoting private enterprise,
some delegates attributed the lack of progress in large part to the
reluctance of wealthy nations to provide promised financial aid.
The Daily Mail (Australia) meanwhile writes that amid the platitudes
spouted at the IMF/World Bank sessions, the address of Wolfensohn touched a chord. Wolfensohn, like Gordon Brown, is rightly frustrated that the millennium goals for bringing education and health care to the poorest countries are being met at a snail's pace. He called for more Group of Seven summits and more global leadership to ensure progress on the poverty battle.
The Hindustan Times (India) further reports that save for the promise of a
new plan by the year-end to resolve the long-pending issue of debt relief
to poor countries, the IMF and World Bank Annual Meetings have ended
without any consensus on critical issues. No assurances have been held out on any step-up in aid flows to developing countries to make a dent on
their "Millennium Development Goals" (MDGs). Nor is there any word on
reforms to provide for them a greater voice in the Fund-Bank setup. Both
IMF managing director Rodrigo de Rato and World Bank president James
Wolfensohn conceded at a press conference on Sunday that there was "no
consensus yet on three issues of vital importance to developing countries". The third of these issues relates to trade on which the low income countries have been battling for years for access to the markets of rich nations.
La Tribune (France) finally reports that the only point on which rich
countries agreed is the extension by two years of the Heavily Indebted
Poor Countries (HIPC) Initiative. Eleven of the poorest countries will
have two additional years to qualify for a reduction of debt within the
framework of this joint IMF/World Bank initiative.
Source: The World Bank |
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