TURNING AFRICA IN THE RIGHT DIRECTION:

US proposes Africa small business loans (BBC, 3 October, 2002)

The World Bank should set up a fund dedicated to backing small businesses in Africa, the US Treasury has proposed.

In a speech on Wednesday, Undersecretary for International Affairs John Taylor said the Bank should set aside $135m (£86m) to be distributed over the next four years, with extra money coming from the US and other countries. [...]

The initiative is the latest salvo in a long-running campaign by the Bush administration to switch World Bank funding from loans to grants.

Right-wing US politicians have been pushing for the switch for years, ostensibly to reduce the deep indebtedness of the poor countries which are the World Bank's clients.

But critics insist it is a way of handicapping the body by draining its funds.

A deal for rich countries to provide $13bn in new money over the next three years, reached in June 2002, was conditional on increasing the proportion of money that is paid out in grants.

The stress on the IFC, the critics say, is part of the same strategy of transferring development assistance to the private sector.

This sounds like a terrific initiative. How ironic would it be if the Right, longtime foes of the World Bank, succeeded in turning it into a useful institution? Posted by Orrin Judd at October 18, 2002 8:08 PM