The World Banks board is likely to approve a debt relief proposal for 18 poor countries on Tuesday March 28 despite haggling among member nations over how to fully compensate the development lender, board officials said Monday.
The officials said that many Bank donor countries had make firm commitments to cover the costs to the World Banks low-interest lending arm, the International Development Association (IDA), for the first 10 years of the debt relief plan. But future funding to cover the full 40 years of the debt relief was less clear.
The Group of Eight industrialized countries – the US, Britain, Germany, France, Japan, Italy, Canada and Russia — agreed in June to a plan that would write off the debts of the 18 countries owed to the World Bank, the International Monetary Fund and African Development Bank.
Only France has passed legislation to fund its share of the debt relief, creating some uncertainty and unease about the commitments of the other G8 member countries.
– This will be passed by July 1 because if we do not, there will be political recourse (langtrækkeri), said one board official, adding: – Simply to fail completely would be very bad politically, so that is unlikely even if it means a loss or a risk for the Bank itself.
– The real risk is not that some parliaments will not pass the law, but the risk is what happens to IDA in the next 30 years, the official stated.
Among the countries to benefit from the debt relief will be Benin (P), Bolivia (P), Burkina Faso (P), Senegal, Guyana, Tanzania (P), Mozambique (P), Nicaragua (P), Niger, Mali (P), Rwanda, Ethiopia, Honduras, Mauritania, Ghana (P), Uganda (P), Zambia (P) and Madagascar (P-et angiver, at der er tale om et dansk programsamarbejdsland).
Last year the World Bank estimated that the potential cost to the Banks IDA lending facility could be more than 50 billion US dollar (310 milliarder DKR) over the 40 years, including commitments made under previous debt-relief initiatives.
If there is no form of funding to make up for the losses, this would severely undermine the IDAs ability to continue lending to the worlds poorest nations, the Bank had noted.
A World Bank spokesperson said the March 28 board meeting will discuss a financing package and a paper on the implementation of the debt relief.
– We remain on track to implement the MDRI (Multilateral Debt Relief Initiative) on July 1 at the start of the bank’s fiscal year, the spokesperson said.
Kilde: www.worldbank.org
