Monday, September 18, 2006

U.K. ENDS THREAT ON WORLD BANK CASH !

The World Bank's tough loan conditions have drawn criticism. The UK has pulled back from its threat to withhold £50m ($94m) from the World Bank after the Bank agreed to alter the way it made decisions on loans.
Britain last week said it might withhold the funds in protest at the Bank's tough policy of withdrawing loans to nations deemed to be corrupt.
The UK government said the rule unfairly penalised the poorest people in such developing countries.
The World Bank will now give donator nations more say in the loan process.
Monday's news came after the World Bank's Development Committee met in Singapore.
'Reaching the poor'
UK Development Secretary Hilary Benn said he had now "got what I need in terms of a process" to pull back from withdrawing the £50m.
We cannot abandon the poor because their governments or institutions are weak
World Bank boss Paul Wolfowitz
Other World Bank member states such as India and South Africa had also criticised the strong anti-corruption drive instigated by World Bank boss Paul Wolfowitz.
"If we are to reach the poor, we must find ways of providing support for development in challenging environments," South African Finance Minister Trevor Manuel told the World Bank's Development Committee.
"The Bank's new enhanced framework on governance and anti-corruption should not compromise the Bank's core mission of poverty reduction."
'Unfairly penalising'
Mr Wolfowitz appeared to soften his stance at the meeting, saying poor people should not be penalised for the abuses of their leaders.
"We cannot abandon the poor because their governments or institutions are weak," he said in an address to the World Bank's Development Committee.
"That would mean they would be penalised twice."
He had earlier told the meeting that despite his anti-corruption drive, lending to developing countries was up 9% this year to $9.5bn.
The World Bank's board, which comprises finance ministers from member states, will now have more say in the anti-corruption drive and therefore which, if any, countries have their aid suspended as a result of poor practice.
Mr Benn has also raised concern over the World Bank's determination that nations receiving loans must liberalise their economies, saying the Bank is far too prescriptive.

BBC NEWS REPORT.

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