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Wednesday, 20 February, 2002, 23:35 GMT
World Bank calls for doubling aid
World Bank President James Wolfensohn
Wolfensohn: Rich countries must double donations
The leader of the World Bank has called on rich industrial nations to increase their financial contributions to poorer countries twofold over the next 15 years.

The World Bank estimates that to achieve its goals of cutting poverty and hunger by half, developed countries need to contribute an additional $40bn to $60bn a year - above current contributions of $57bn.

UN Millennium Development Goals
Halve poverty and hunger by 2015
Universal primary education
Promote gender equality
Reduce child mortality
Improve maternal health
Combat HIV/AIDS and other diseases
Ensure environmental sustainability
Develop a global partnership for development
"These numbers show that without additional resources, we will not meet the development goals," said World Bank president James Wolfensohn, referring to the Millennium Development Goals (MDG) as established by the United Nations.

But even as he called on rich states to do more, Mr Wolfensohn said developing countries must make concrete steps toward reform in order to improve the effectiveness of development aid.

"If the aid goes to countries with poor policies and institutions, it is likely to be wasted," said Shanta Devarajan, an economist at the world lending body.

Treasury Secretary speaks out

Separately, speaking at a conference on global development in Washington, US Treasury Secretary Paul O'Neill defended the Bush administration's earlier call for the World Bank to provide more aid to poor countries in the form of grants - not loans.

Mr O'Neill told the gathering that policies employed by the Bank, the International Monetary Fund and other international aid organisations have driven developing countries "into the ditch".

US Treasury Secretary Paul O'Neill
O'Neill: "We've driven them into the ditch".
Mr Wolfensohn was vocal at a meeting of the Group of Seven industrialised nations in Ottawa, Canada, last autumn that such a scheme utilising grants was not viable.

Other members on the panel that appeared on Wednesday with Mr O'Neill, including billionaire investor George Soros and former World Bank chief economist Joe Stiglitz, said grants alone would not alleviate the problems of extreme poverty in developing nations.

Mr Stiglitz, an ardent critic of the World Bank, said the poorer nations need to find ways to attract capital but are not capable of doing so without basic infrastructure such as roads as well as healthy and educated workforce.

Mr Stiglitz was, however, in seeming agreement with Mr Wolfensohn in calling for aid to be doubled.

See also:

06 Feb 02 | Business
Ghana 'misled' IMF
04 Feb 02 | Business
IMF approves $16bn for Turkey
04 Feb 02 | Business
'Worst over' for Turkey
01 Feb 02 | Business
World Bank returns to Ivory Coast
30 Jan 02 | South Asia
Dollar could be Afghan stopgap
29 Jan 02 | Business
Argentina seeks US backing
14 Jan 02 | Business
IMF chief calls for open markets
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