World Bank faults the rich countries
Compiled From Dispatches
Tuesday, September 23, 2003
iht.com
Too little spent helping the poor, it says
DUBAI, United Arab Emirates The World Bank
opened its annual meeting here on Tuesday with
a blistering attack on rich countries for spending
hundreds of billions more on their militaries and
their farmers than on helping the poor.
"Our planet is not balanced," the bank's
president, James Wolfensohn, told delegates from
184 countries. "Too few control too much, and too
many have too little to hope for. Too much turmoil,
too many wars. Too much suffering."
The failure of global trade talks this month in the
Mexican resort of Cancún highlighted the deep
divide that must be overcome to create a stable
future, Wolfensohn said in an opening address to
the joint meeting of the World Bank and the
International Monetary Fund in Dubai.
He criticized rich countries for providing just $56
billion a year in development assistance to poor
countries, compared with more than $300 billion
they spend on agricultural subsidies and $600
billion spent on militaries. Nations have
committed an additional $16 billion in aid by
2006, but Wolfensohn said poor nations could
easily use twice that amount.
At Cancún, rich nations balked at greater cuts in
their farm subsidies and poor nations, saying that
their farmers suffer from those subsidies, refused
to proceed.
The U.S. Treasury secretary, John Snow, and
other top finance leaders have been lobbying for a
quick resumption of the trade negotiations,
arguing that breaking down barriers to global
commerce would benefit all.
But rich nations need to do what they say they
support, Wolfensohn said.
"It is inconsistent to preach the benefits of free
trade and then maintain the highest subsidies
and barriers for precisely those goods in which
poor countries have a comparative advantage," he
said.
Finance leaders are worried about the American
budget deficit, approaching a record $500 billion,
but Snow called the spending "understandable"
and pledged that Washington would bring it down
through economic growth and responsible
spending.
"It came about because of a recession and efforts
to deal with a recession" Snow said.
He called it "Economics 101" that countries run
deficits to tackle recessions but said the United
States planned to slash its deficit in half over the
next five years, to below 2 percent of gross
domestic product.
The IMF's managing director, Horst Koehler, said
increased U.S. spending had provided a stimulus
to the global economy but called on Washington
"to establish a credible framework for a return to a
balanced fiscal position."
Refusing to lay blame for global troubles entirely
on the West, Wolfensohn called poor countries'
spending of $200 billion on militaries - more than
they invest in education - "another major
imbalance."
Nigeria's central bank governor, Joseph Sanusi,
hailed Wolfensohn's speech but said developing
countries wanted action, not words.
"When you have poverty and some people living in
affluence, then you have conflicts," Sanusi said.
"There is a saying: the hungry dog and a dog that
is full, they cannot play successfully."
The meeting, which conclude on Wednesday, is
the first such event held in an Arab country, and
many delegates are calling that a good signal for
the troubled region.
The host country, the United Arab Emirates,
opened Tuesday's session with a call on the
international community to help rebuild Iraq and
bring peace in the Palestinian-Israeli conflict.
"The Arab world is a region of tremendous
richness, diversity and potential," said the finance
minister, Sheik Hamdan bin Rashid al-Maktoum.
"This part of the world will not be able to realize its
full economic potential until a just and permanent
solution to the regional conflict is found and the
international community makes a serious effort."
He cited "rays of hope" in Iraq, which is hoping to
recover from decades of economic mismanagement
under Saddam Hussein and United Nations
sanctions that held back its crucial oil industry.
Iraq has just announced a plan to establish a
market-based economy with access to foreign
investors in all segments but oil. (AP, Reuters)
Help for North Korea urged
South Korea's finance minister on Tuesday urged
the International Monetary Fund and the World
Bank to help North Korea prepare for eventual
membership, saying the move was necessary for
the reclusive North to participate in the world
economy, The Associated Press reported from
Dubai.
Amid the standoff with the United States over
nuclear weapons, the North has "already taken
important steps toward a peaceful settlement," but
it must eventually become part of the globalized
economy "to be truly successful," said the finance
minister, Kim Jin Pyo.
"Getting there will require help, both from the IMF
and the World Bank," Kim said.
He also urged the two lenders to provide
"technical assistance" that would prepare North
Korea for membership. North Korea is not a
member of the IMF or World Bank and therefore
could not get any financial assistance from them
for now. To gain membership, North Korea would
first need to improve its relations with other
members, an IMF official said. |
