The World Bank faces “an uphill task” persuading donor countries to meet its fundraising target of $39bn for the International Development Association, the bank’s concessionary lending arm that provides funds to the world’s poorest countries, Robert Zoellick, president, said on Thursday.
In a briefing in Tokyo, Mr Zoellick said factors including budget constraints, taxpayer resistance and a weak US dollar and Japanese yen made the current three-year round, which closes in December, very difficult.
“Part of my job is to explain why IDA is important. What tends to sell aid is if you can show it has a direct connection for the country or a particular problem or a disease. But IDA is the general fund,” he said.
Japan had cut its IDA pledges sharply, from 18.7 per cent of the total six years ago to 12.28 per cent now, pushing it into third place behind the UK. Mr Zoellick said he was trying to persuade Tokyo not to cut further.
Overall, Japan’s overseas development aid had shrunk 38 per cent in six years. By some calculations Germany and France could overtake Japan as aid donors by next year, pushing the world’s second-biggest economy into fifth place, a world bank official said.
Apart from budgetary constraints and currency depreciation in the US and Japan, which make buying each “special drawing right” more expensive, the round is complicated by previous debt forgiveness pledges. Poor countries have been allowed to skip about $6bn in IDA repayments, which would normally have been reinvested.
One positive, if largely symbolic, development was that China for the first time had indicated it might be willing to pledge funds, Mr Zoellick said. Jin Renqing, China’s finance minister, had said he wanted to attend an IDA donors’ meeting in November in Dublin.
“This is China being a responsible stakeholder in the world of IDA support,” Mr Zoellick said.
The Ministry of Finance in Beijing declined to comment on Thursday but an official familiar with the issue said the State Council, or cabinet, had not yet approved participation in the IDA round.
China received $1.67bn of aid in 2004, according to the OECD, making it the seventh largest recipient, although that will decline as aid from Tokyo ends. As it has become richer and its global interests more important, China has begun using aid as a tool of diplomacy, especially in resource-rich Africa, but also in parts of Asia.
one from the Financial Times. President Bush presumably chose Robert Zoellick for his good rapport with America's allies after previously installing the antagonistic Paul Wolfowitz. Unfortunately for Zoellick, it appears that his efforts at meeting aid targets by collecting the aid monies promised by the G-8 at the Gleneagles summit and elsewhere have not borne much fruit. However, an interesting development is that China may be taking up the slack to some extent by pledging aid to the Bank: