Wolfowitz sees debt relief plan progressing
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The head of the World Bank said Thursday that good progress was being made to wrap up an agreement that will provide more than $40 billion in debt relief to the world’s poorest countries. World Bank President Paul Wolfowitz said he was encouraged by recent developments but he conceded that it was a challenge to win endorsement from all countries for the agreement struck by the world’s seven richest nations at their annual economic summit in July. The debt relief would forgive about $40 billion in debt owed by the world’s poorest countries, many of them in Africa, to the World Bank, the International Monetary Fund and other international lending institutions. Proponents hope the IMF and the World Bank will endorse the deal at their annual meetings this weekend. However, a debate has erupted with a group of countries led by Belgium and the Netherlands who have complained that not enough money has been committed to make up for the loan repayments that the World Bank will lose by forgiving the debt. But Wolfowitz said he was encouraged by the Bush administration’s recent endorsement of congressional legislation that would pledge U.S. support to make up the lost funds. Wolfowitz said he shared the concerns being raised by Belgium and the other nations but he believed negotiators on the issue were getting close to an agreement. “We are committed to getting it done and we expect real progress at these meetings,” said Wolfowitz, who took over as head of the World Bank on June 1 after serving as deputy secretary of defense in the Bush administration. Wolfowitz spoke at a news conference previewing global finance talks that begin on Friday with a meeting of the finance ministers and central bank presidents of the world’s seven richest countries. Those discussions will be led by Treasury Secretary John Snow and Federal Reserve Chairman Alan Greenspan and will be followed on Saturday and Sunday by meetings at the IMF and World Bank. Administration officials said on Wednesday that they plan to reassure finance officials at the meeting that the billions of dollars in federal spending on recovery from Hurricane Katrina will not delay reaching the goal of cutting the U.S. federal budget deficit in half by 2009. However, the International Monetary Fund is deriding that goal as “relatively unambitious” and suggesting that a better target would be to totally eliminate the deficit by 2010 with the help of tax increases. (Related story: IMF urges deficit reduction) |