The world needs a "new development architecture" to match the new global financial system, the president of the World Bank has said. Mr James Wolfensohn, expected to be re-appointed soon, said this week he had spent much of his first term "turning around the organisation".
Mr Wolfensohn will be only the third president since the bank was founded in 1946 to serve more than one period in office.
Yesterday he said he would now press ahead with the bank's comprehensive development framework which aims to combine social and macro-economic aspects of development policy.
At the bank's annual meeting in Washington, Mr Wolfensohn said better co-ordination of development required a coalition between the United Nations, governments, multilateral organisations such as the World Bank and the private sector. "It is shameful that Tanzania must produce 2,400 reports each quarter for its donors," he said.
He welcomed the new joint World Bank/International Monetary Fund agreement on debt relief for highly-indebted poor countries reached earlier this week, but said good governance in recipient countries was vital to ensure resources released were used for poverty reduction.
It emerged yesterday that Uganda would probably be the first country to benefit from the debt-relief initiative. It is a relatively easy country to admit to the programme, having already passed most of the qualification tests under an earlier, less generous, debt-forgiveness plan. It will benefit by about $80 million (€76.2 million) a year.
The World Bank said yesterday that up to 12 countries should be ready to enter the relief programme by the end of this year. The bank's target is to get three-quarters of the 38 countries eligible for relief into the programme by the end of 2000.
Mr Michel Camdessus, IMF's managing director, said yesterday that the common approach of the bank and the fund to poverty reduction and growth meant that there would be "a far greater degree of synergy" between the operations of the two organisations. However he claimed integration of a social dimension into the fund's policies was not new.
Repeated demands had been made on the fund to cope with the aftermath of war. The IMF should be "more pro-active" in promoting initiatives for peace.
He gave his support to proposals to abolish the use of export credit for sales of military equipment and to adopt maximum national defence spending levels, which should not exceed 1.5 per cent of gross domestic product for African countries. IMF member countries are still unable to agree to changes in the fund's statutes that would hold off law suits while governments sorted out debt problems.
The proposal from IMF staff is one of several plans aimed at easing the way for negotiations between debtors and creditors at a time of financial crises. A stay of litigation would make it more difficult for individual creditors to derail debt negotiations, and give creditors and debtor groups more time to manage debt restructurings.
Mr Camdessus said yesterday that some member governments had yet to be convinced of the need to change the IMF's articles to allow stays of litigation among member countries. He said that drawing on recent financial crises, policy-makers had now to "try to distil a set of principles that could help resolve crises at less cost than in the past".
