World Bank offers new help for poor nations
The World Bank is offering more cash to help poor nations
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Friday, 28, Sep 2007 10:10
The World Bank is to provide $3.5 billion (£1.7 billion) from its reserves to help the poorest countries.
In a statement the agency confirmed that the amount was more than double that which it had previously pledged to give a unit of the bank which distributes funds to such nations.
World Bank president Robert Zoellick expressed hopes that the additional cash would encourage richer countries to provide more assistance for developing countries.
"This should help us gain momentum as we urge donor countries to increase their commitment to help the 81 poorest countries, especially in Africa," he explained.
Mr Zoellick said the World Bank's pledge to boost its contribution to the International Development Association (IDA) showed that the organisation was "putting its money where its mouth is".
The World Bank needs to increase the money available through the IDA as the 2005 decision by the Group of Eight (G8) industrialised nations to cancel the debts of 19 of the agency's poorest borrowers could leave the facility with a shortfall.
According to reports key donors to the IDA, such as the United States, are reluctant to make new commitments to the unit as a result of budget problems they face and a desire to provide aid for specific projects independently.
Meanwhile the World Bank has announced that it is cutting the price it charges on loans to emerging countries such as China, India and Brazil. Mr Zoellick said that the first reduction in loan charges in nine years, granted to the 79 states the World Bank classifies as low-and middle-income countries, would return prices to pre-1998 levels.
Analysts say that the move is part of the World Bank's strategy to increase its business with such nations and to encourage them to assist with efforts to fight global poverty.