[stop-imf] Bush calls for grants > loans

[Robert Weissman]

Bush Calls for World Bank to Increase Grants

WASHINGTON, July 17 (Reuters) - U.S. President George W. Bush on
Tuesday called on the World Bank and other development banks to make up
to 50 percent of its cash disbursements to the world's poorest
countries in grants rather than loans.

``I ... propose the World Bank and other development banks dramatically
increase the share of their funding provided as grants rather than
loans to the poorest countries,'' Bush said in a speech at the World
Bank.

``Specifically I propose that up to 50 percent of the funds provided by
the development banks to the poorest countries be provided as grants
for education, health, nutrition, water supply, sanitation and other
human needs,'' he said.

``It would be a a major step forward. Debt relief is really a
short-term fix. The proposal today doesn't merely drop the debt, it
helps stop the debt.''

The idea that the World Bank provide more grants rather than loans has
been mentioned often by U.S. Treasury Secretary Paul O'Neill, but
Tuesday's speech marked the first time the administration named a
specific figure -- 50 percent.

National Security Council spokeswoman Mary Ellen Countryman said after
about 10 years of providing grants, donor countries like the United
States and others would have to increase funding for the World Bank to
pay for the proposal.

Bush's speech came ahead of a trip to Europe to attend the Group of
Eight summit in Genoa, Italy. The theme of the summit is poverty
alleviation.