< /head > Colorado Coalition for Human Rights: World Bank Profits From Poor Countries - Report

Wednesday, September 20, 2006

World Bank Profits From Poor Countries - Report

From the Inter Press Service via Common Dreams News Center:

The World Bank receives more from developing countries than what it disburses to them says a new report released Tuesday as finance ministers endorsed a controversial new Bank plan to tackle corruption in developing countries.

The Social Watch Report 2006, released here at the annual meetings of the Bank group and the International Monetary Fund (IMF), stressed the need to reform the current international financial structure. Net transfers (disbursements minus repayments minus interest payments) to developing countries from the Bank and the International Bank for Reconstruction (IBRD), have been negative every year since 1991, the report pointed out.

The IBRD is now not making any contribution to development finance other than providing funds to service its outstanding claims. The International Development Association (IDA), which provides interest-free credits and grants to the poorest developing countries to boost their economic growth, is the only source of net financing from the Bank.

But these disbursements amount to only 4-5 billion US dollars a year. Taken together, the contribution of the Bank to the external financing of developing countries is negative by some 1.2 billion dollars, thus ‘‘failing to fulfil the purpose of its mission'', said Social Watch, an international network of over 400 citizens' organisations in 60 countries monitoring commitments to eradicate poverty.

Meanwhile, critics say the Bank has embarked on a public relations offensive using the good governance and poverty eradication rhetoric to mask its unpopular neo-liberal agenda of ‘deregulation', privatisation, and removal of government subsidies for essential services.

Good governance is not an end in itself, but the foundation of the path out of poverty, said Bank group president Paul Wolfowitz in his address to the annual meeting of the Board of Governors on Tuesday. ''It leads to faster and stronger growth. It ensures every development dollar is used to fight poverty, hunger and disease.'' Wolfowitz said that governance, a ‘‘much broader concept than anti-corruption'', was aimed at poverty reduction and would not be used as a new conditionality for lending.

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