WB eyes rate reduction for developing nations

WASHINGTON – For the first time in almost a decade the World Bank is set to make meaningful cuts in the interest rates it charges China, Brazil, Mexico and other big developing countries, The Wall Street Journal Europe reported yesterday.

Under a deal to increase assistance to poor nations, unnamed bank officials told the Journal that “as part of the compromise, the World Bank will contribute as much as 3.5 billion dollars to the International Development Association, a World Bank unit that provides grants and no-interest loans to the world’s 80 poorest nations.” “The compromise was pushed hard by the World Bank’s new president, Robert Zoellick, who has emerged as a pragmatic horse trader, unsympathetic to conservative critics who say the bank should cut off lending to countries that can borrow easily on private markets,” the report said.Also in the deal “in exchange for lowering interest rates to pre-Asian-crisis levels, Zoellick pressed Brazil, Mexico, China and other middle-income countries to support a substantial contribution to the IDA by the International Finance Corp, a World Bank arm that lends to private companies, rather than governments,” the report added.Monday a top IMF official said the International Monetary Fund and the World Bank were developing a joint strategy to aid low-income countries that will define their separate roles.John Lipsky, IMF first deputy managing director, said the Fund’s role in low-income countries, which has drawn controversy in recent years, will be formalized in a Joint Bank-Fund Management Action Plan that will be unveiled ahead of the two institutions’ annual meetings next month.”This plan is intended to help insure that the efforts of these key institutions remain well-coordinated and consistent, while leveraging each institution’s resources effectively,” Lipsky said in a speech at an event organised at IMF headquarters by Oxfam International, a leading anti-poverty nongovernmental organization.”The plan is scheduled to be considered by both executive boards before next month’s annual meetings,” Lipsky said.The IMF and World Bank meetings are scheduled on October 20-22 in Washington.Nampa-AFP”The compromise was pushed hard by the World Bank’s new president, Robert Zoellick, who has emerged as a pragmatic horse trader, unsympathetic to conservative critics who say the bank should cut off lending to countries that can borrow easily on private markets,” the report said.Also in the deal “in exchange for lowering interest rates to pre-Asian-crisis levels, Zoellick pressed Brazil, Mexico, China and other middle-income countries to support a substantial contribution to the IDA by the International Finance Corp, a World Bank arm that lends to private companies, rather than governments,” the report added.Monday a top IMF official said the International Monetary Fund and the World Bank were developing a joint strategy to aid low-income countries that will define their separate roles.John Lipsky, IMF first deputy managing director, said the Fund’s role in low-income countries, which has drawn controversy in recent years, will be formalized in a Joint Bank-Fund Management Action Plan that will be unveiled ahead of the two institutions’ annual meetings next month.”This plan is intended to help insure that the efforts of these key institutions remain well-coordinated and consistent, while leveraging each institution’s resources effectively,” Lipsky said in a speech at an event organised at IMF headquarters by Oxfam International, a leading anti-poverty nongovernmental organization.”The plan is scheduled to be considered by both executive boards before next month’s annual meetings,” Lipsky said.The IMF and World Bank meetings are scheduled on October 20-22 in Washington.Nampa-AFP