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To: Mark Bartlett who wrote (19707)	9/25/1998 7:24:00 AM
From: Alex	Read Replies (1) \| Respond to of 116762

World Bank lending shoots up to $28bn By Mark Atkinson, Economics Correspondent Friday September 25, 1998 World Bank lending to developing countries rose to a record high last year as it sought to combat the savage impact of Asia's financial and economic crisis on the poor. With tens of millions threatened with being dragged back into poverty, the bank pledged to lend $28.594 billion (£17 billion) in the year to July 1998 compared to $19.147 billion in 1997. The 1998 total was the largest in the bank's 54-year history. Most of the new money - some $16 billion, including a $5 billion loan to Korea - was earmarked for East Asia to help the crisis-torn countries rebuild their shattered financial systems and fight poverty at the sharp end. "In human terms the cost has been brutal, with possibly as many as 20 million people falling into poverty in 1998 in Indonesia and Thailand alone," said senior World Bank adviser Tim Cullen, presenting the bank's annual report in London. Poverty is defined as living on less than a dollar a day. The World Bank said the increase in new loan commitments also reflected an improved focus on schools, hospitals, birth control, water and sanitation in the developing world in general - now accounting for 30 per cent of total lending - and the relatively upbeat economic outlook in Africa. Sub-Saharan Africa has experiened three successive years of economic growth, with 21 countries' economies expanding by 5 per cent or more in 1997. The World Bank said the combination of increased political openness and economic progress had 'created greater opportunities for development in the region'. Lending commitments to Africa increased by almost two thirds to $2,873.8 million. With private capital flows from rich countries to developing countries drying up in the wake of the Asian financial crisis, the World Bank's role in fighting the spread of poverty has been reinforced at a time when it is being questioned by politicians. On Monday, the Prime Minister set a 12-month deadline for fundamental reform of the World Bank and its sister organisation, the International Monetary Fund. The question of reforming the two Bretton Woods institutions is expected to dominate the forthcoming annual meetings of the two institutuons in Washington. Mr Cullen said the World Bank was open to ideas about reform, but added that it had already embarked on a programme of renewal which had enhanced its ability to fight poverty. Changes included basing more country directors in the field and the introduction of a range of 'new products' including two new types of flexible lending instruments. The bank was now able to lend up to $5 million to support small, pilot projects without board approval which could receive extra cash if they proved successful. Mr Cullen said internal reforms, begun four years ago after the G7 summit in Halifax, Nova Scotia, had reaped dividends in the form of fewer 'problem projects'. reports.guardian.co.uk