World Bank's $400mn Trade Aid Program to help poor countries
24 Sep '05
2 min read
The United States, European Union and other donors would provide up to $400 million in new funding to help poor countries adjust to opening their markets to more imports under a World Bank and International Monetary Fund (IMF) proposal being considered this weekend.
The recommendation is aimed at easing fears many developing countries have about world trade talks that could require them to cut tariffs that often are a big source of government revenue or that would erode 'trade preferences' for goods such as sugar, textiles and bananas they currently enjoy with the US and the EU.
Finance ministers from the G7 leading industrialized nations called on the World Bank and the IMF in February to come up with ways to provide additional trade adjustment assistance for developing countries. US President George W. Bush, British Prime Minister Tony Blair and other world leaders echoed that call at the G8 summit meeting in July.
The resulting proposal would ramp up a program that draws on resources from the World Bank, the IMF, the World Trade Organization (WTO) and United Nation agencies to provide developing countries with trade-related technical assistance. Increased funding would be between $200 million and $400 million over the first five years, compared to about $30 million now, a World Bank aide said.
Another aspect of the plan is aimed at strengthening the capacity of developing countries to trade among themselves. A third plank would bolstertools to assess whether countries need trade adjustment assistance and could, in particularly severe cases, prompt the World Bank and IMF to coordinate with other donors 'to bring an additional package of assistance, in the form of grants or loans as appropriate,' a joint World Bank-IMF report said. The World Bank's Development Committee is due to consider the proposal on Sunday.
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