[DEBATE] : UK withholds £50 million from World Bank over conditionalities

[MFleshman at aol.com]

14 September 2006
BBC
 
UK withholds World Bank donation 
The UK is  withholding £50m it had pledged to the World Bank in protest at 
conditions it  attaches to aid.  
International Development Secretary Hilary Benn voiced concerns that the Bank 
 is telling poorer nations how to run their affairs.  
He is concerned that the Bank has been demanding too strict conditions before 
 giving aid to developing countries.  
Mr Benn said the Bank had a duty to help those in poverty despite the actions 
 of their governments.  
 
The Bank has for a long time insisted that the countries it lends to meet  
economic targets and has encouraged trade liberalisation.  
In addition, since taking over as head of the Bank last year, World Bank  
chief Paul Wolfowitz has made it his mission to tackle corruption in poorer  
countries.  
His campaign has led to hundreds of thousands of dollars of loans and  
contracts to countries like Chad, Congo, Ethiopia and Bangladesh being  suspended.  
Campaign attacked  
However, it has also drawn significant criticism from charities and pressure  
groups.  
Mr Benn has also told Mr Wolfowitz that the UK is unhappy with the lack of  
progress at removing strict conditions on financial assistance.  
Last year, the UK provided £1.3bn to the Bank to help poorer countries and  
promised to donate a further £50m in 2007, provided it eased the strings  
attached to aid.  

      
"On other issues, particularly economic policy,  developing countries ought 
to take their own decisions"
Hilary Benn, international development  secretary  



However, Mr Benn has said he will now delay handing over the cash until he is 
 satisfied the World Bank has eased its position.  
The UK had taken the stance as it opposed World Bank efforts to impose  
damaging policies that force poorer countries to liberalise their markets.  
"Most people would agree that if you're invading your neighbour, if you're  
oppressing your population or if you're taking aid money and spending it on  
other things, then we shouldn't stand for that and we won't," Mr Benn told the  
BBC.  
"Britain doesn't and nor does the World Bank and we should attach conditions  
in those circumstances.  
"But on other issues, particularly economic policy, developing countries  
ought to take their own decisions and I do believe that this is one of the ways  
that we can increase the voice of the poorest countries of the world," he 
added.   
Decision-making  
Campaigners such as Christian Aid and Oxfam have attacked the World Bank's  
demands, saying they often leave people in developing countries worse off than  
before.  
"Imagine what life would be like if you had to run every decision you made by 
 your bank manager and if he or she didn't like it, you would have to change 
it,"  Christian Aid policy manager Anna Thomas said.  
"That is the reality for many poor countries and they can't just switch  
accounts."  
Christian Aid points to the example of Ghana where the World Bank's demand  
for a ban on tariffs and subsidies for the poultry market has led to an influx  
of cheap European imports and seen many thousands of Ghanaians lose their 
jobs  and livelihoods.  

Story from BBC NEWS:
_http://news.bbc.co.uk/go/pr/fr/-/2/hi/business/5344752.stm_ 
(http://news.bbc.co.uk/go/pr/fr/-/2/hi/business/5344752.stm) 





Oxfam Statement on UK decision to withhold £50 million to the World  Bank

September 14, 2006 ­ Singapore ­ Oxfam welcomes the UK  government¹s
decision today to withhold £50 million of its funding to the  World Bank on
the grounds that the Bank has made unsatisfactory progress to  stop tying
controversial economic policy reforms to its aid to poor  countries.

Oxfam has been campaigning for many years for the World Bank  and IMF to
stop its disastrous practice of attaching conditions like  trade
liberalization and privatization to much-needed aid and debt relief on  the
grounds that it often harms poor people.

Research commissioned by  Oxfam revealed that 15 out of 20 developing
countries assessed in 2006, had  privatization-related conditions attached
to their current World Bank lending  contracts.  Contrary to official World
Bank findings, the research also  revealed that privatization-related
conditions attached to World Bank lending  have risen in number, not fallen
since 2001.

Not only does this fly in  the face of developing countries¹ sovereign right
to determine their own  economic policy, but it can increase poverty rather
than reduce it. For  example, the privatization of essential services such
as water in developing  countries can price those services beyond the reach
of the poor.   Oxfam¹s new report ŒIn the Public Interest¹ shows that the
private sector is  not necessarily a more efficient provider of services,
let alone  equitable.  Furthermore, countries often have their aid delayed
as they  implement these unworkable economic reforms, denying poor people
access to  much-needed finance.

Oxfam is calling on other rich country donors to  follow the lead of the UK
and press harder for the World Bank and IMF to  restrict their policy
conditions only to the minimum necessary for ensuring  financial
accountability and poverty  reduction.

Notes

-----------------------------------

1.   The UK provided the Bank with £1.3bn last year to help poor
countries,  with the promise of an extra £50m next spring, provided it
softened its hard  line approach on economic conditions.  However, despite
the World Bank  implementing new operational guidelines on conditionality,
the UK government  believes progress has been far too slow.
2.    Oxfam commission the  European Network on Debt and Development to
undertake research on World Bank  and IMF conditionality in February 2006.
The report, ŒWorld Bank and IMF  conditionality: a development injustice¹ is
available at  www.eurodad.org
3.    Oxfam¹s new report Œ In the Public Interest:  Health, Education, and
Water and Sanitation for All is available  at
http://www.oxfam.org.uk/what_you_can_do/campaign/he/public_interest.htm



Taylor  Thompson
MDGs Media  Officer
taylor.thompson at oxfaminternational.org
202.496.1173  (office)
202.321.2967 (mobile)

Oxfam International Advocacy  Office
1100 15th Street, NW
Suite 600
Washington, D.C.  20005
www.oxfaminternational.org

Visit the web site at  http://www.oxfam.org