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IMF Committee Clears Debt Reduction Measure

The deal would write off $40 billion owed by 18 poor nations; it still needs final approval.

September 25, 2005|From Times Wire Services

WASHINGTON — A deal to erase billions of dollars of debt for poor countries cleared an important hurdle Saturday, winning the endorsement of the International Monetary Fund's steering committee.

The agreement would forgive an estimated $40 billion worth of debt for at least 18 poor, mostly African, countries owed to the IMF, the World Bank and the African Development Bank.

As many as 20 other countries could qualify for relief if they meet certain conditions. That would push the total amount of debt cancellation to more than $55 billion. The write-off would be spread over decades.

The breakthrough was announced by Britain's finance minister, Gordon Brown, who is chairman of the IMF's policy-setting panel.

The deal still must be endorsed by the IMF's 24-member executive board and the World Bank. The annual meetings of the World Bank and IMF continue today, and U.S. officials predicted swift approval of the deal.

At Saturday's session, the new World Bank president, Paul Wolfowitz, gave his first policy speech to member countries, calling for tangible results from bank programs to fight poverty.

The speech was the first clear presentation of how Wolfowitz intends to lead the world's main development agency over the next five years. He laid out an agenda that sharpens the priorities of the bank, which critics say has deviated from its main mission of reducing poverty and become mired in bureaucracy.

Wolfowitz, the Bush administration's choice to head the bank, said he would promote anti-corruption measures, accountability, good governance, women's empowerment, education, health, increased infrastructure and agriculture.

"Whether investing in education, health, infrastructure, agriculture, the environment, we in the World Bank must be sure that we deliver results," Wolfowitz said. "And by results, let me be clear -- I mean results that have a real impact in the day-to-day lives of the poor. We stand accountable to them."

Wolfowitz also reiterated that the impoverished continent of Africa is a priority for the bank.

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