Wolfowitz predicts debt relief plan will clear hurdles
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A plan to wipe out $40 billion worth of debt for poor countries could be in place by the end of the month, World Bank President Paul Wolfowitz said Friday. In an interview with The Associated Press, Wolfowitz was hopeful that sticking points could be resolved when the world’s biggest economic powers gather here on Sept. 23 for the Group of Seven meeting and the subsequent annual meetings that weekend of the 184-nation World Bank and the International Monetary Fund. “Cautiously optimistic would be a good phrase,” Wolfowitz said. “I hope that we can sustain the momentum.” In addition to debt relief, Wolfowitz said he was pushing for the world’s rich countries to honor a commitment to double aid to Africa in the next 10 years. “It is important for the developed countries to keep those commitments. We need to hold their feet to the fire,” he said in a wide-ranging interview. Wolfowitz, the former No. 2 at the Defense Department and an architect of the Iraq war, began a five-year term as president of the World Bank on June 1. Its stated mission is to fight poverty and improve the living standards of people in developing countries, and it lends about $20 billion a year for various projects. The annual World Bank and IMF meetings later this month will be his first as president. Protesters are hoping to mount the largest demonstration yet against the Iraq war in Washington on Sept. 24 – the day the IMF and the World Bank meetings begin. Cindy Sheehan, whose 24-year old son was killed last year in Iraq, will conclude a 25-state bus tour in Washington that day. Wolfowitz said he didn’t believe the demonstrations – which will include protests against IMF and World Bank policies – would disrupt the meetings. “I hope at some point people will accept that we are all trying to achieve the same result,” he said. The Group of Eight most industrialized countries reached an agreement in July to erase $40 billion in debt that 18 of the world’s poorest countries – 14 of them in Africa – owe to international lending institutions, including the World Bank. The Group of Seven countries are the United States, Japan, Germany, France, Britain, Italy and Canada. The Group of Eight are those countries plus Russia. Anti-poverty groups are worried that the United States and some other rich countries will seek to water down pledges to provide the necessary money to the World Bank and the IMF to make up for the revenue the institutions won’t receive because of canceled debt payments. “The world is watching and will not tolerate backsliding and bickering that costs lives,” said Bernice Romero, advocacy director of Oxfam International. The disputes center around whether all of the money that will be lost through debt cancellation will be made up fully by the rich countries and how long the rich countries will need to make payments to cover the costs of the debt relief. Wolfowitz said he supported the rich countries paying as much as needed and for as long as needed to cover fully the costs of debt cancellation. In other issues, Wolfowitz declined to estimate the cost of Hurricane Katrina, which slammed into the Gulf Coast last week. “That’s not our job,” he said of the World Bank, which is the largest supplier of development loans to poor nations. Helping Africa – the poorest continent – would be a top priority during his tenure at the World Bank, Wolfowitz said. He said there were a number of signs that a new generation of African leaders was winning the fight against corruption – an enemy of effective development. |