Britain May Withhold World Bank Donation

The Associated Press
By JANE WARDELL
The British government threatened Thursday to withhold a $94 million contribution to the World Bank to protest the conditions the bank places on aid to poor countries.
The bank has cracked down on corruption under new president Paul Wolfowitz, but Britain's International Development Secretary Hilary Benn said it should not refuse to help those in poverty despite the actions of their governments.
'It's a way of demonstrating that Britain takes this issue very, very seriously,' Benn told BBC Radio in an interview from Singapore, where the World Bank and the International Monetary Fund are to hold their annual meetings. 'I want to see the evidence that this practice is changing.'
The move was welcomed by Christian Aid, one of several charities and pressure groups that have criticized Wolfowitz's mission to tackle corruption in poorer countries. Wolfowitz's campaign since he took over as head of the bank last year has led to hundreds of thousands of dollars of loans and contracts to countries like Chad, Congo, Ethiopia and Bangladesh being suspended.
'This is a very welcome development and vindicates Christian Aid's long-held belief that economic conditions imposed on poor countries by the World Bank and the International Monetary Fund can be disastrous for poor countries,' said Christian Aid spokesman Charles Abugre.
However, Abugre said Britain should now 'go the extra mile' and withhold all its contributions.
Britain made a core commitment of $2.4 billion last year to the International Development Association of the World Bank. It also announced a further $94 million to be paid in 2007, provided the World Bank cut some of the strings attached to aid.
Benn said that payment _ due in April _ will be withheld until Britain sees some evidence that principles implemented by the World Bank last year to pay greater heed to the priorities of aid recipients are being put in place.
'I think when it comes to fighting corruption, to improving transparency, upholding human rights, above all making sure the money is spent on reducing poverty, I'm all in favor of attaching conditions,' Benn said.
'But when it comes to economic policy choices, in particular things like privatization and trade liberalization, I don't think it's right that we should be telling other countries what to do. The U.K. doesn't do that anymore with its aid,' he added.
Aid agency Oxfam said its own research showed that 15 out of 20 developing countries assessed in 2006 had privatization-related conditions attached to their current World Bank lending contracts. It added that the number of such conditions attached to World Bank lending has risen since 2001, a finding contrary to the bank's claims that they have fallen.
Danny Leipziger, vice president of the World Bank, said the bank imposes conditions on the money lent 'to try to ensure that it's well spent.'

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