The World Banks Board is expected to consider a plan next week for wiping out poor countries debt, the lending institutions president said Wednesday, reports the World Bank press review.
The expected approval by the board would be mostly a formality. Financial leaders nailed down the landmark debt-relief plan at meetings in late September of the 184-nation World Bank and International Monetary Fund (IMF).
A general framework for the deal was endorsed by leaders of the worlds eight major industrial powers at the July economic meeting in Scotland. Details of putting the deal in place were left largely to the World Bank and the IMF.
World Bank President, Paul Wolfowitz, said that the plan would forgive almost 40 billion US dollar (248 milliarder DKR) in debt owed by 18 poor countries, mostly in Africa, over a 40-year period. The plan is expected to be implemented in fiscal year 2007, which begins on July 1, 2006.
Wolfowitz said donors reached a unanimous consensus and will report their results to the board positively promptly. The World Bank President added that some donors had chipped in additional funding to ensure there were no financing gaps over the next three years and cover 80 percent of the costs for the next 10 years of the agreement.
He further said there was a strong political commitment to make up the remaining costs. – Because of the way in which countries appropriate money and parliamentary procedures work, the further out you go the less unqualified a commitment can be, but its very strong in terms of the political commitment by donors to keep IDA whole, Wolfowitz said.
Earlier on Wednesday Wolfowitz said the debt relief would allow countries to spend more on basic services.
Separately, the IMF has called a briefing on the implementation of its side of the debt relief initiative, launched by the Group of Eight industrialized countries.
The debt cancellation would cover countries such as Benin, Bolivia, Burkina Faso, Zambia, Uganda, Tanzania, Senegal, Rwanda, Mali, Guyana, Honduras, Madagascar, Ethiopia, Ghana, Uganda, Mauritania, Mozambique and Nicaragua.
Kilde: www.worldbank.org
