The chief of the World Bank took a hard line on corruption on Friday while his counterpart at the International Monetary Fund (IMF) said policy-makers need to be ready to adapt to a more difficult economic environment in the coming year as delegates gathered for the sister institutions’ annual meetings.
”We can’t tolerate the misuse of our funds,” World Bank president Paul Wolfowitz told reporters. ”If we’re going to get out of poverty, the money has to go where its supposed to go and not line the bank accounts of government officials.”
Returning to Asia for the first time since 1997, the IMF and World Bank open their annual gathering in Singapore next Tuesday and Wednesday.
Normally held in Washington, the meeting is held every third year outside the United States capital. About 16 000 participants are expected, and already thousands have arrived for a series of meetings and seminars, including a round-table discussion with activist groups.
This is the biggest international conference that Singapore has ever hosted, and the city-state has undergone elaborate preparations, particularly in regards to security. The convention centre is surrounded by two-and-a-half metre fences topped with razor wire, and armed Gurkha guards stand watch at key sites throughout the city.
Singapore has banned outdoor protests during the meetings, saying they could lead to violence and damage to property.
Taking advantage of the gathering, finance minister and central bankers from the G7 were to meet on Saturday to discuss the global economy and IMF reform.
A key agenda item for the IMF, established in 1945 to foster economic and financial stability in the aftermath of World War II, is a proposed reform in the fund’s voting structure to reflect the growing economic power of China and other developing countries.
The World Bank, whose aim is to reduce poverty through providing development loans, will be focusing on fighting corruption and seeking ways to help development in Africa.
Wolfowitz, who has championed fighting corruption since becoming head of the bank last year, has blocked more than $1-billion (â,¬786-million) in loans from the bank to a range of countries for illegal practices.
Those moves have sparked criticism from Britain, whose international development secretary, Hilary Benn, told BBC Radio in an interview from Singapore that it should not refuse to help those in poverty despite the actions of their governments.
The British government threatened on Thursday to withhold a £50-million ($94-million) contribution to the bank to protest the conditions it places on aid to poor countries.
Benn said the payment — due in April — will be withheld until Britain sees some evidence that the bank is making progress in paying greater heed to the priorities of aid recipients.
Wolfowitz said the World Bank was aware of the concerns expressed by some members over the conditions for its loans.
”Hilary Benn and I are in complete agreement that the World Bank in the past has been … too full of prescriptions for countries about what they had to do and too inclined to force those prescriptions on them,” he said. ”But I think we’ve learned a lot from experience and I think we agree the whole approach has to be much more one of helping countries find what works.”
Non-governmental organisations say the World Bank needs not only to reduce the number of conditions attached to its loans, but also to work to stop tying economic policy reforms such as liberalisation and privatisation to its aid on poor countries.
The IMF’s managing director Rodrigo de Rato told a separate press conference that economies throughout the globe in the past year have shown resilience despite higher energy prices and monetary tightening by the world’s major central banks.
”The world economy has been able to respond positively,” he said.
On Thursday, the IMF said it projects that global growth will rise 5,1% this year before moderating a bit to 4,9% in 2007 — both a quarter-point higher than it forecast in April.
But it warned in its World Economic Outlook that the US economy faces a likely slowdown, which could drag on global growth.
”One important question … is how the world will adapt to a less buoyant US economy,” de Rato said. ”Policy-makers need to be ready to adapt to a more difficult environment” in the coming year.
IMF members will be voting on the proposal to reform the institution’s voting structure, though de Rato declined to predict whether the proposal would be passed.
Its executive board already has approved a two-step plan that would first boost the voice of four countries — China, South Korea, Mexico and Turkey — it considers most underrepresented by increasing their quotas, or financial commitments, to the fund.
Within two years, the IMF plans to rework the voting shares of the all 184 member countries.
”What is clear is that there was a very clear majority on the board to endorse the resolution,” said de Rato.
To pass, the proposal must win 85 percent of votes from member nations. Each country’s vote, however, is determined by its quota.
The US vote, for example, counts for about 17% of the total, and Japan counts for 6,1%. The Pacific Island nation of Palau has voting share of 0,013%. – Sapa-AP