Loan and Recommendation options divide WB Committee

Rome,11/03/13 - On Saturday, the second meeting of the World Bank Committee was still stalling on the first agenda topic (Target 8.a). It was hard for delegations to reach an agreement on how to achieve an open, rule-based, predictable, non-discriminatory trading and financial system. All delegates acknowledged the need for a global partnership. 

However, two different lines emerged from the discussion. On the one hand, France pushed hard for passing a recommendation on a sustainable free trade and financial system, as well as on continued agricultural enhancement, in the long run. In advocating this, France was sponsored by the US. "We want to provide people living in least developed countries (LDCs) with long-lasting skills to achieve sustainable development. That's why we believe that a recommendation would be more effective than delivering financial aid. In a nutshell, it's better to teach people how to catch fish on their own, rather than provide them with something that will disappear in the long-run", the US delegate told RussiaToday.

On the other hand, a group of countries led by South Africa, Morocco, Kenya and Argentina has proposed the WB to deliver further loans to LDCs, as they believe that financial aid provided so far has not produced satisfactory outcomes. Financial support would be targeted at improving agriculture, industry and stimulating the use of renewables in the public sector.

Russia was also in favour of a loan, which it considers a concrete measure to tackle obstacles to development in several countries. “What we care about is providing pragmatic solutions” the Russian delegate stated. Yet, Russia decided not to join the above-mentioned group of countries proposing a loan to LDCs, as it believes that the signatories lack the financial and political weight needed to actually support them. The Russian delegation is thus cooperating with China and Saudi Arabia to fund development projects in Mongolia, the Caucasus, and Iraq.

Yesterday, the conclusive session of the WB (World Bank) Committee took place. After three days of intensive works, the possibility of a real compromise still seems quite far. Several strategies to achieve MDG 8.a have been drawn up, but they have been more influenced by local and regional interests rather than the will of meeting halfway. Despite the hesitation, the most supported line is the one led by Russian Federation and China, which focuses on a loan to improve infrastructures and transports. This loan proposal would actually involve areas in need of financial support and at the same time have the potential for economic growth.

Eleonora Amabili

Gianmarco Ventura (Russia Today)