Monday, February 12, 2007

WB Pres. Wolfowitz Calls for Liberian Debt Relief

More from Sarah:
From The Times
February 12, 2007
Gabriel Rozenberg in Essen

Paul Wolfowitz, President of the World Bank, pleaded with Group of Seven ministers at the weekend to widen their commitment to cancelling debt in some of the world's poorest countries.

He urged finance ministers to clear the log-jam that keeps Liberia heavily in debt, calling on them to endorse plans to clear the country's arrears.

The African state owes about $3.7 billion (£1.8 billion) to the World Bank, the International Monetary Fund and donor countries, which it has no realistic means of repaying.

However, Mr Wolfowitz said that the country was in a bind because, under existing rules, the Bank can write its debts off only when it has repaid its arrears, which have grown to make up the bulk of the total.

At the weekend meeting in Essen, Germany, Mr Wolfowitz "made a very strong pitch" to the G7 countries to pledge new funds for Liberia and allow the rules to be loosened. He told The Times that he hoped that other African countries could soon follow the same path.

After a four-year civil war, in which more than 200,000 people died, Mr Wolfowitz said that Liberia should now be supported for its voting in 2005 to elect as president the reformist Ellen Johnson-Sirleaf. He said: "They were given a choice between a soccer star and an economic reformer, who is the first woman president in Africa. She's doing remarkable work."

Mr Wolfowitz said that he had received a "sympathetic reaction" and that Britain had agreed to the plans. "Gordon Brown has been strongly supportive," he said. "He joined me in working to impress on others the importance of moving."

About half Liberia's population lives on less than 50 US cents a day, the World Bank says. Liberia's debt-servicing costs are 22 per cent of its GDP.


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