World financial leaders announce plan to boost school enrollment
WASHINGTON (AP) – World financial leaders, under pressure to battle poverty far more effectively after Sept. 11, announced a major effort to educate more poor children on Sunday as they concluded weekend discussions on the global economy. They failed, however, to settle a contentious dispute between the United States and Europe over a World Bank loan program for the world’s poorest countries.
At a closing news conference, World Bank President James Wolfensohn sought to play down the failure, saying that there was a real commitment among all countries to keep the program “strong and growing” under new guidelines emphasizing country accountability. But he did not suggest when the dispute might be resolved.
The World Bank initiative on education will select 10 poor nations for a pilot program to develop the best approaches to achieving universal primary education by 2015. Currently, 125 million children in poor nations, two-thirds of them girls, do not attend school.
Wolfensohn said he hoped the participating countries could be selected by late June, when the eight top industrial nations meet in Canada for their annual economic summit, so funding commitments could be pursued.
Only Germany and the Netherlands have pledged to support the pilot program, expected to cost between $2.5 billion and $5 billion. Among countries under consideration for the pilot program are Tanzania, Malawi, Senegal and India.
Protesters who contend globalization works for the wealthy but not the poor staged sporadic demonstrations outside the meetings Sunday. Standing watch were hundreds of police with riot gear at the ready.
The crowd, estimated at about 1,000 people, was mostly peaceful and there were no arrests. During a rally a the Washington Monument, police moved into the crowd at one point to stamp out a small fire after an American flag was set aflame.
The complaints against global capitalism have gained new urgency since the Sept. 11 attacks.
Wolfensohn has been a leading proponent of the view that the United States and other wealthy countries will not defeat terrorism unless they commit more money to eradicate poverty.
The Bush administration last month proposed an increase in U.S. foreign aid of $10 billion over the 2004-2006 period, including an 18 percent increase in U.S. support for a World Bank program to help the poorest countries.
That offer, however, came with a demand that the World Bank use more direct grants to poor nations rather than loans that must be repaid.
European countries say that approach would deplete World Bank resources unless wealthy countries significantly increase their contributions.
Treasury Secretary Paul O’Neill, who predicted the discussions on the issue would be “testy,” complained in a speech to the World Bank’s Development Committee that the United States had shown a “high degree of flexibility.” He said opponents must show a similar willingness to compromise.
But Clare Short, Britain’s secretary for development, said the U.S. effort had “delayed considerably” the campaign to boost World Bank resources by a June 30 deadline. She said the U.S. plan would threaten the loan program’s “future financial sustainability.”
The chairman of the bank committee, which sets broad policy, said developing countries do not support the U.S. approach. South African Finance Minister Trevor Manuel said there is lingering suspicion it is part of a hidden conservative agenda to “shut down” the World Bank.
British Chancellor of the Exchequer Gordon Brown insisted that despite the failure to reach agreement on the grants versus loans debate, the meeting still accomplished much.
The ministers focused on a U.N.-supported goal of doubling rich country aid to poor countries, from the current roughly $50 billion a year, to cut the poverty level in half by 2015, he said.
The Sunday committee sessions followed meetings Saturday of the IMF’s policy committee and the Group of Seven finance ministers and central bank presidents.
Saturday’s talks produced a deal on how to handle international debt crises. The agreement encourages countries to adopt clauses in their bond contracts that would speed the process of restructuring debt burdens in the event of defaults.
In December, Argentina had a record default on $141 billion in foreign debt.
Argentine Economy Minister Jorge Remes Lenicov, who made a personal appeal for new IMF loans over the weekend, said his government is focused on securing agreements with provincial governments to restrain spending.
He declined to say when Argentina might reopen its banks, shut down Friday to halt a massive drain on deposits.
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