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Last Updated: Thursday, 22 September 2005, 19:45 GMT 20:45 UK
World Bank hopes on debt relief
World Bank President Paul Wolfowitz
The World Bank's president says challenges on debt relief lie ahead
World Bank President Paul Wolfowitz has said he is hopeful that "real progress" can be made to implement a debt relief deal for the world's poorest countries.

But he warned winning endorsement for a deal struck by leading rich nations earlier this year remained challenging.

The deal aims to cancel $40bn (22bn) in debt owed to international lenders by poorer nations, mostly in Africa.

Mr Wolfowitz was speaking ahead of the World Bank and International Monetary Fund's annual meeting this weekend.

Campaigners and aid agencies are pressing for ministers and officials representing the 184 member states of the World Bank and IMF to back the debt relief deal at the gathering in Washington.

But a number of countries, led by Belgium and the Netherlands, have complained that not enough money has been committed by rich nations to make up for the shortfall in funds that the World Bank will face if debt repayments are forgiven.

Fulfil promises

The debt issue explored

Mr Wolfowitz said that agreement needed to be reached so that the $40bn debt cancellation deal would not come "at the expense" of the World Bank and its funds for developing countries.

"We are committed to getting [agreement for debt relief] done, and we expect real progress at these meetings," Mr Wolfowitz said.

However, he added: "It's a challenge to get that many countries together for a consensus."

IMF managing director Rodrigo Rato said it was unlikely that agreement on the debt cancellation plan would be reached over the weekend. He said he expected agreement on the deal "in the next few weeks".

Leading rich nations at July's G8 summit in Gleneagles agreed in principle to cancel the debts of 18 of the world's poorest and most heavily indebted nations.

UK-based aid charity Oxfam called on Mr Wolfowitz to "use his influence to force rich countries to fulfil their promises to the poor".

Neoconservative

The annual meeting of the World Bank and IMF will be the first Mr Wolfowitz has attended as head of the Washington-based lender since taking up his post at the beginning of June.

As former deputy US defence secretary and a leading proponent of the US-led invasion of Iraq, he was regarded with suspicion by critics would said he was too closely aligned with bullish "neoconservative" views which promote America's dominant role in world affairs.

However, in his new post Mr Wolfowitz has called for increased development aid to lift millions of people out of poverty.

As well as debt relief, officials at the two-day meeting are expected to discuss ways the global economy can deal with the recent soaring cost of oil.

On Friday, finance ministers and central bank bosses representing the G7 group of leading industrialised nations - Canada, France, Germany, Italy, Japan, the UK and the US - plan to hold talks.

They will be joined by representatives from Russia, China, Brazil and South Africa for a working lunch.




SEE ALSO:
World Bank rediscovers inequality
20 Sep 05 |  Business
World Bank offers India $9bn loan
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Government defends G8 aid boost
09 Jul 05 |  Business
Trade 'vital' to African progress
04 Jul 05 |  Business
Wolfowitz seeks more Africa aid
20 Jun 05 |  Africa


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