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Saturday, 24 June, 2000, 10:32 GMT 11:32 UK
Bank delays China loan review
Chinese counrtryside
The loan is to assist in moving poor rural families
The World Bank has abruptly cancelled plans to make public a highly critical review of a $40 million loan to China.

The loan is to assist Chinese authorities in moving poor rural families into mainly Tibetan-populated areas in a western province

The bank's directors had told reporters and non-governmental organisations the report would be made public late on Friday.

However after objections surfaced at a board meeting, the decision was made not to make the document public - at least for now.

Pro-Tibetan and environment groups have been pressing for the documents to be made public.

The $40 million loan is designed to provide for the relocation of mostly ethnic Han Chinese from Qinghai province in western China into areas inhabited by 4,000 Tibetan and Mongolian herders.

'Cultural genocide'

Chinese officials say the project will help ease poverty among subsistence farmers, but Tibetan exile groups say it amounts to "cultural genocide."

Dalai Lama
The Dalai Lama is critical of the loan

Tibet's exiled spiritual leader, the Dalai Lama, was asked about the loan following Tuesday's meeting with President Clinton.

He said, "Under the present circumstances this would be a source of more problems. Therefore it is not the right time."

A group of 60 members of Congress from both parties has also written to World Bank President James Wolfensohn, calling on him to release the review.

The report by the Independent Inspection Panel - a three-person watchdog group within the bank - said staff members had rushed through the loan evaluation process, failing to assess environmental and social concerns.

Dissent

One of its most surprising conclusions, according to those familiar with the contents, is that the bank staff never discussed asking the Chinese government to consider alternative relocation sites for the farmers.

When the board took up the loan last June, the United States, the bank's major shareholder, and Germany voted against it with several other nations abstaining.

World bank President James Wolfensohn
Bank President James Wolfensohn wants an end to the loan problem

That rare show of dissent at the board meeting, where most decisions are reached by consensus without a vote, prompted the order for the evaluation.

The bank directors will now debate the loan for the second time in 12 months with a decision expected July 6 or July 7.

Mr Wolfensohn said in London on Friday that the bank's management is determined to correct any problems with the loan, which is part of a larger $160m package for China.

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See also:

26 Apr 00 | Asia-Pacific
China accused of ruining Tibet
26 Feb 00 | Americas
China scorns US criticism
18 Feb 00 | South Asia
Dalai Lama's appeal for Tibet
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