World Bank-IMF talks face bargaining on debt relief
Afp, Washington
Financial leaders from across the world were to open annual meetings of the World Bank and IMF Saturday battling to sign off on an ambitious debt cancellation plan designed to transform the poorest nations. Debate over reforming the sister institutions, which have long been dominated by the United States, European nations and Japan, to give more say to developing nations was also to intensify here. Finance ministers and other policymakers from the 184 members of the Bank and International Monetary Fund, who will meet here at 8:30 am (1230 GMT), were to assess prospects for a faltering global economy menaced by natural disasters and rising energy costs. Their meetings Saturday and Sunday under heavy police guard could well be overshadowed by Hurricane Rita, another powerful storm threatening major oil and gas installations in the southern United States just weeks after the sector suffered a devastating blow from Hurricane Katrina. They were to open their talks a day after the Group of Eight powers pledged to finance the plan to erase the crippling debt burden of 18 desperately poor countries in a bid to unblock an impasse that has left campaigners fuming. Haggling over which other aid donors would have to help foot the 40-billion-dollar bill appeared to have been trumped by the announcement made after talks among finance ministers from the Group of Seven countries. Joined by Russia in the G8 formation, the ministers said they agreed "to cover the full cost" to offset, dollar for dollar, the principal and interest payments still owing to the World Bank that would be cancelled. The commitment from the G8 -- Russia plus the G7 members Britain, Canada, France, Germany, Italy, Japan and the United States -- was contained in a letter to World Bank president Paul Wolfowitz. The letter said the G8 would make additional funds "immediately" available to cover the cost of the cancellation to the International Development Association, a unit of the World Bank that lends to poor countries. Several industrialized countries feared that cancelling the debt would deprive the IDA of revenues needed to continue its lending to developing parts of the world. The 40 billion dollars is owed primarily to the World Bank, and to a lesser extent the IMF and the African Development Bank, by 18 of the world's most impoverished nations, nearly all in Africa.
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