'Don't Let World Bank Off Hook,' say Campaigners as Benn Promises £50m

The Jubilee Debt Campaign has told the UK government not to let the World Bank off the hook after Hilary Benn, the International Development Secretary, announced he would pay the £50 million previously withheld in September.

The Jubilee Debt Campaign has told the UK government not to let the World Bank off the hook. The drive for renewed pressure has come after Hilary Benn, the International Development Secretary, announced he would pay the £50 million previously withheld in September in a dispute over strings attached to aid and debt relief.

The decision follows the claims of a World Bank report that it is now imposing fewer controversial policy conditions on poor countries, and ensuring that conditions are 'owned' by the countries concerned.

Trisha Rogers, Director of Jubilee Debt Campaign, said: "We have welcomed the pressure that the UK government has put on the World Bank, including by withholding funding in order to force the Bank to examine its practice, but it must not now let the Bank off the hook.

"While the Bank has started to improve its language on conditions, it is still imposing them; by using aid and debt relief to force poor countries to adopt controversial policies - such as privatisation of services, or rapid unilateral trade liberalisation - it is still undermining democracy and damaging livelihoods. We totally support transparency and accountability over the use of funds; we also strongly support countries' ownership - accountable to their own people - of their economic policies."

Addressing the International Development Secretary, Rogers said, "If Hilary Benn is serious about getting the World Bank to change, the UK must continue to link its funding to the removal of undemocratic and harmful conditions, and must work with other governments - both South and North - to secure this."

The UK's current policy holds back on attaching any economic policy conditions - such as requirements for privatisation or trade liberalisation - to the aid it gives directly to poor countries. Contributions to multilateral aid and debt cancellation are, however, not subject to this same policy.

The UK committed £1.43 billion to the World Bank in the last round of 3-year financing commitments. Of this, £50 million was withheld until there was evidence of progress on reforming conditions This is
now being released. The negotiations over the next three-year round of financing begin in February 2007, Jubilee Debt Campaign has reported.

The World Bank study, prompted by Benn's September decision to withhold £50m in UK funding until there was proper evidence of reform in the Bank's use of conditions, was discussed by its Executive Board this week.

While the study claims that conditions in controversial areas have been reduced, this is largely by reclassifying some as 'benchmarks' and by grouping others together as single conditions.

It does admit, however, that in some cases conditions have given governments "less policy space than desirable".

On the issue of 'ownership', Trisha Rogers added: "The World Bank's definition of 'ownership' seems to come from a parallel universe. For a country to 'own' a policy, it must be chosen by its government after public debate, parliamentary scrutiny and a decision by its government. But the World Bank believes a country 'owns' any policy chosen by the Bank and IMF behind closed doors, as long as the government agrees to go along with it. This is no way to build accountable and transparent governments."

Jubilee Debt Campaign is part of an international movement demanding an end to the injustice of poor country debt. It is a UK coalition of about 200 national organisations and local groups, supported by thousands of individuals, working to help end the scandal of extreme poverty and the use of debt as a tool of Northern control over the South.

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