Developing nations were not able to achieve an agreement on debt forgiveness for the most heavily indebted poor nations at the weekend meeting of the International Monetary Fund and the World Bank, but there were signs of progress, reports the World bank press review Monday.
– I hope it will be resolved before long, said James Wolfensohn, President of the World Bank. – It is a political decision that must be made by the shareholders, he said.
Finance ministers and central bankers indicated that negotiations over funding more debt relief are at a early stage, and details of competing proposals were vague. Some shareholders emphasized that new debt relief funding should not reduce the amount of money the International Development Association (IDA) has available for new lending to poor countries that are not heavily indebted.
The World Bank estimates 40 percent of IDAs current lending of about 9 billion US dollar will be recycled into future new loans for poor countries. Having the Bank simply forgive those loans, rather than have debt service paid by donors, would reduce the scope of World Bank lending, said World Bank President James Wolfensohn.
– It is clear that IDA is a revolving fund. If repayments are not made and not made up by somebody, the amount of money loaned by IDA will be diminished. The impact will not show up quickly because IDA loans have 10-year grace periods, Wolfensohn said.
The Los Angeles Times further notes that on Sunday, IMF and World Bank officials acknowledged that beyond fast-growing China and India, most developing countries stood little chance of achieving their millennium goals.
– Four years ago … almost every single country signed up for a historic shared commitment to right the greatest wrongs of our time, said the UK Chancellor of the Exchequer Gordon Brown.
Instead of attaining millennium goals by 2015, Brown said, current trends indicate that sub-Saharan Africa will not achieve universal primary education until 2130, a 50 percent reduction in poverty until 2150 and the elimination of avoidable infant deaths until 2165. – I believe the whole world will say 150 years is too long for a people to wait for justice, Brown said.
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.
Pakistans Salman Shah said his country had initiated a “sea of change” of financial reforms but would be unable to achieve its development goals without a significant increase in international aid.
The Press Trust of India notes that both Wolfensohn and IMF chief Rodrigo de Rato promised they would intensify their efforts to mobilize international support to attain the Millennium Development Goals.
Both the International Monetary and Financial Committee (IMFC) of the IMF and the Development Committee for the Transfer of Real Resources to Developing Countries obtained the backing for help to achieve the goals from the US and other leading donors.
They stressed the need for countries with high fiscal deficits to bring them down. They also urged nations that are slow in implementing reforms to speed them up.
– Structural reforms, said the IMFC, “remain crucial to strengthen the foundations for sustained growth. Most advanced economies, should step up their efforts to increase economic efficiency and flexibility to take full advantage of the opportunities from rapid technological change and global integration.”
This is probably the first year, according to observers, that the abolition of poverty, illiteracy and squalor are accepted as an international concern.
Agence France Presse notes that African finance ministers voiced optimism Sunday about what they said was fresh momentum on the part of Western nations toward easing the multilateral debt burden carried by the poorest countries.
Speaking of the debt owed by poor nations – and those in Africa in particular – to multilateral bodies such as the Bank and the Fund, Malawi Finance Minister Goodall Gondwe said “our understanding is that ideas are traveling forward on dealing with that.” – There are now new ideas circulating. We do not have a preference for one or the other. We think that all the ideas should be put together.
The Globe and Mail of Canada notes that Canada has thrown up a major new roadblock to a debt-cancellation deal for the worlds poorest countries by vigorously resisting a British plan to inflate the value of the International Monetary Funds vast gold reserves.
Finance Minister Ralph Goodale said Ottawa wants guarantees the plan will not undermine gold mining companies in Canada and elsewhere. Goodale made the comments after the IMFs top policy-making group failed on the weekend to finalize a deal to cancel billions of dollars worth of debt owed by the worlds poorest countries.
But a communiqué released Saturday by the IMFs international monetary and financial committee made no mention of the gold plan or debt cancellation. On Friday, Canada and other Group of Seven industrialized nations pledged only to report back by year-end on the progress of their debt-relief efforts.
The Guardian meanwhile comments in Mondays editorial that the real failure of the weekends meetings was in an area where they do have leverage: debt relief. While an international consensus now agrees that those debts should be paid off, and quickly, the international bodies are being hamstrung by arguments between the wealthiest and most influential countries over how the debt relief should proceed.
What is important is that the worlds wealthiest countries continue to work on writing off 100 percent of the debt belonging to the worlds poorest countries. But discussions and calls for action are trying the patience of the worlds poor – and Brown, US Treasury Secretary John Snow and their colleagues are all guilty of not doing enough, fast enough, according to the Guardian.
Kilde: www.worldbank.org
