[stop-imf] Press Review WEDNESDAY, SEPTEMBER 5, 2001 (fwd)

[Robert Weissman]

A range of interesting press summaries today from the World Bank,
including a hilarious synopsis of a letter from British International
Development Secretary Clare Short, calling anti-corporate globalization
protesters "reactionary."

--=20
Robert Weissman=09<rob@essential.org>
Essential Information
P.O. Box 19405, Washington, DC 20036, USA
Tel: 1-202-387-8030
Fax: 1-202-234-5176
www.essential.org


This summary is prepared by the External Affairs Department of the World Ba=
nk.
All material is taken directly from published and copyright wire service st=
ories
and newspaper articles.

For more news go to http://www.worldbank.org/developmentnews
To subscribe go to http://www.worldbank.org/subscriptions/



Headlines for WEDNESDAY, SEPTEMBER 5, 2001:
- SOME I.M.F. DIRECTORS URGE MORE SELECTIVE LENDING APPROACH
- REACTIONARY CRITICS IGNORE WORLD BANK PROGRESS:  SHORT.
- LEGAL BATTLE LOOMS OVER PROTESTS IN WASHINGTON
- SCHR=D6DER CALLS FOR DEBATE ON CAPITAL FLOWS.
- INDONESIA SEEKING DEBT RELIEF, WORLD BANK URGES ACCOUNTABILITY.
- ALSO IN THIS EDITION:
WORLD BANK TO HELP AILING TURKISH MANUFACTURERS.

MANAGUA TELECOMS SALE 'WILL NOT BE REVERSED.'

SOME I.M.F. DIRECTORS URGE MORE SELECTIVE LENDING APPROACH

Some directors at the IMF think the global crisis lender "should be more
selective" when deciding whether to provide finance to member countries wit=
h a
poor economic track record, according to a summary of recent board discussi=
ons
issued Tuesday, reports Dow Jones.

In the past, countries that have consistently found themselves in financial
crisis have in turn been burdened with an ever-increasing number of loan
conditions form a wary IMF. Indonesia, most recently, has been a prime exam=
ple
of a country with a poor track record asked to meet an enormous number of I=
MF
loan condition to be sure of continuing financial support.

"Some directors questioned whether including a large number of conditions i=
n a
program is an appropriate response to such situations," the IMF board summa=
ry
acknowledged. "In this light, some directors argued that the Fund should be=
 more
selective in providing financial support to countries, particularly in case=
s
where there is a weak track record or an insufficient commitment to the
program," it said. Stanley Fischer, who stepped down last week as the IMF's
first deputy managing director, expressed a similar sentiment in his farewe=
ll
remarks last week, when he suggested the Fund must be prepared to walk away=
 from
those countries that are unable, or unwilling, to meet the IMF's loan
conditions.

The IMF said yesterday it had pared back the amount of conditions it attach=
es to
its loans, but that more needed to be done on the policy, which aims to giv=
e
borrowers more freedom in setting their own economic policies, Reuters repo=
rts.
An IMF executive board assessment on the new policy, which has been in plac=
e for
less than a year, found there has been a notable reduction in the numbers o=
f
conditions attached to loans to poor countries, mainly in Africa.

However, it also found that some of its recent standby loans, the sort of
facilities used by nations like Argentina and Brazil, have had more conditi=
ons
attached to them since the new policy was put in place.  The board discussi=
on,
which took place at the end of July, also revealed that some IMF directors =
would
like to see the lender become, "more selective in providing financial suppo=
rt to
countries, particularly in cases where there is weak track records or an
insufficient commitment to the program."

Sources on the Fund's board said the US and Britain were the most vocal in
demanding fewer loans to countries with bad track records of performing und=
er
earlier loans, such as Kenya and Zimbabwe. "The US and Britain want the IMF=
 to
be more selective, in the belief that by lending to countries that have
performed well in the past, you will have a greater chance of success with =
IMF
programs," the board member said.

The source added that the US had also voiced concern about continuing to le=
nd to
countries that have become too reliant on IMF programs in the past and cont=
inue
to borrow without ever "graduating" from the lender's help-a category that =
would
include most African countries.

The IMF has been instituting the policy in recent loans. While the conditio=
ns
attached to poverty reduction loans have been reduced, some standby loans h=
ave
had more conditions attached where countries have weak past records.  "With=
 this
new policy, the IMF's staff really has to justify why they include measures=
 in a
loan that are not part of monetary or fiscal policy," the board member said=
=2E
"You really can see some reductions in the conditions on recent programs.  =
There
is a new tendency to leave some things to the World Bank and there is now a
general assumption of parsimony."





REACTIONARY CRITICS IGNORE WORLD BANK PROGRESS:  SHORT.
Responding to recent critiques of the World Bank and its president, James
Wolfensohn, British International Development Secretary Clare Short writes =
in a
letter to the editor of the Financial Times (p.14) that while no institutio=
n is
perfect, these critics ignore the considerable progress that has been made =
and
are seeking to promote a narrow and reactionary agenda that could return th=
e
Bank to the mistakes of the past.

Over the past few years, Short says, there has been a fundamental shift in =
the
World Bank's approach.  It is now unequivocally committed to poverty reduct=
ion
as the goal of all its operations and has firmly embraced the agreed
international development targets.  Many more country directors are based i=
n the
countries in which they operate and the Bank has played a leading role in t=
he
Heavily Indebted Poor Countries (HIPC) debt relief initiative.

One of the most important developments has been the launch of the poverty
reduction strategy process.  This represents a radical shift in the way
development agencies approach low-income countries, strengthening the capac=
ity
of government systems so that management of the economy and provision of pu=
blic
services are improved in a way that promotes sustainable development and be=
tter
services for all.

Many recent criticisms of the Bank are about opposition to this new approac=
h to
development, says Short.  By attacking Wolfensohn, they hope to turn back t=
he
clock to old-style projects and excessive conditionality.  Short says she
strongly agrees with calls not to undermine the intellectual integrity of t=
he
Bank, but that she does not believe that economists sitting in Washington h=
ave
all the answers.  Governments of developing countries must take the lead in
decisions about their own development, taking full account of the views of =
their
citizens and building on national democratic processes.

It is this change that the critics so strongly oppose, as it removes power =
from
their representatives in Washington, Short says.  Reactionary forces are at
work, wanting to undermine this paradigm shift in development practice.  Th=
ey
cannot be allowed to succeed.

Also writing to the editor of the FT (p.14), World Bank Managing Director
Shengman Zhang says that under Wolfensohn's leadership, the World Bank has =
seen
project quality rise to record levels; overall client satisfaction has impr=
oved;
shareholders have expressed strong support for the Bank's strategic directi=
ons
and for the Comprehensive Development Framework, including unanimously appr=
oving
a budget increase; and anti-corruption is now on the Bank's agenda.

Wolfensohn and former IMF Managing Director Michel Camdessus introduced the
first international response to provide comprehensive debt relief to the wo=
rld's
poorest, most indebted countries, and as a result of this initiative, 23
countries today are receiving debt relief of $34 billion over time-somethin=
g
believed far from possible even six years ago.

Noting that Wolfensohn has been criticized for listening to advice and crit=
ics
from outside the Bank, for learning from the past and for broadening the Ba=
nk's
traditional economic approach, Zhang says that whether we go forward with a
modern, comprehensive approach to development or go back to the economics o=
f the
1980s is a debate we do not fear.





LEGAL BATTLE LOOMS OVER PROTESTS IN WASHINGTON
A legal battle is brewing over demonstrators at this month's annual meeting=
s of
the IMF and the World Bank as protesters contest police plans to cordon off=
 the
center of Washington, the Financial Times (p.8) reports.  A lawsuit filed b=
y a
coalition of anti-globalization activists  says that one police idea-to ere=
ct a
three-meter-high security fence around a six-block district of
Washington-contravenes their right to protest.

"Not even at the height of the Vietnam war and civil rights movement during=
 the
1960s did the government use protests as a pretext to close off a large par=
t of
the nation's capital," said Brian Becker of the International Action Center
(IAC).  "This is a clear infringement of our First Amendment rights."

The atmosphere around the annual meetings has been soured by jockeying for
position between anti-globalization protesters and the two financial
institutions, the story says.  The Mobilization for Global Justice, the gro=
up
coordinating many of the activities, called a demonstration last week to pr=
otest
at the failure of the IMF and the World Bank to hold their meetings in publ=
ic.

The Fund disputed the criticism.  "I think we view the meetings as being qu=
ite
open," said Thomas Dawson, head of external relations at the IMF.  He accep=
ted
that the watchdog committees for the two institutions, the International
Monetary and Financial Committee and the Development Committee, held their
meetings privately, but that "it's quite clear what we are discussing at th=
e
IMFC and the Development Committee.  It's reported on more or less instantl=
y.
We have a very open and increasing commitment to transparency and openness.=
"

Proposals for a set-piece debate between the protesters and the two institu=
tions
at the meetings are progressing gradually, the story notes.

The news comes as Martin Wolf of the FT (p.15) writes that what he thinks o=
f as
"antiglobalization.com" has become the world's most successful internet-ena=
bled
service industry. The question confronting governments is how best to respo=
nd to
the protests. Policing the violence is a duty but it is not enough.

It is wrong to imagine that the protesters agree even among themselves. The=
re
are strong tensions  between organized labor and campaigning non-government=
al
organizations; between people who want to protect national autonomy and tho=
se
who want to override it; between those who want to save the environment and
those whose main aim is development; between those who want to protect
traditional ways of life and those who wish to upset them; and of course,
between those who want reform and those who seek a revolutionary transforma=
tion.

The collapse of communism, it turns out, liberated the utopian left to drea=
m
dreams, free of the burden of "real existing socialism."

First, leaders need to recognize and react to the sources of the present
disquiet.  Some protesters worry about looming environmental catastrophes;
others lament the prevalence of extreme poverty.  Neither problem has been
created by globalization, says Wolf, but policymakers need to explain why t=
his
is the case and, as important, how they intend to allay both of these anxie=
ties.

Second, the rich countries must admit that they have failed to help large p=
arts
of the world, notably Africa, to take off into sustained growth. Nobody has=
 the
answer.

Third, leaders need to recognize that some aspects of the global economic
process have worked poorly. This is true, above all, for financial markets.
There has to be a procedure for dealing with unmanageable debt burdens. Hig=
hly
indebted countries, should not stagger, like zombies, for years.

Fourth, countries should, for the most part, be allowed to decide their
priorities and policies for themselves, even if the IFM or the World Bank, =
or
for that matter, Greenpeace of Oxfam, disapprove.

Fifth, advanced countries must at last act in accordance with their own sta=
ted
principles.

Sixths, NGOs' are right to complain about the excessive intrusion of narrow
corporate interests into policymaking. Exactly the same complaints can, of
course, be made about the intrusion by NGOs themselves.

Seventh, the legitimacy of decisions imposed by the high-income countries i=
s
questionable. A global democracy does not exist. But leaders of the Groups =
of
Seven should regularly meet the leaders of the world's biggest developing
countries to form a consensus on necessary reforms.

Eight and moth important, leaders should realize that they will never satis=
fy
the protesters. Democratic politicians are accountable to electorates, not =
to
the streets. Demonstrators are entitled to pose questions. They cannot be
allowed to impose mistaken answers.





SCHR=D6DER CALLS FOR DEBATE ON CAPITAL FLOWS.

German Chancellor Gerhard Schr=F6der yesterday called for Germany and Franc=
e to
lead a debate on speculative international capital flows-putting one of the=
 main
demands of the anti-globalization movement on the European agenda, reports =
the
Financial Times (p.16).  There was a need, Schr=F6der said, to recognize "w=
eak
spots" in the international financial system, such as offshore centers, hed=
ge
funds and derivatives.  "So I want to discuss with our European, and especi=
ally
French, partners how we can react to these relatively autonomous speculativ=
e
financial flows."

He stopped short  of supporting French Prime Minister Lionel Jospin's recen=
t
espousal of the so-called Tobin tax that would put a levy on turnover in
currency markets.  The anti-globalization movement has suggested that the
proceeds of such a tax could be used to relieve poverty.

Schr=F6der noted serious shortcomings with the Tobin tax, says the story, q=
uoting
him as saying, "How do you distinguish speculative financial flows from tho=
se
related to genuine trade finance?"  But his comments marked an important sh=
ift
in Germany's willingness to recognize the concerns of the anti-globalizatio=
n
movement.  Only last week, German Finance Minister Hans Eichel rejected the=
 tax
on practical grounds at a meeting with French Finance Minister Laurent Fabi=
us.

Schr=F6der's remarks also contrasted with criticisms from Bundesbank Presid=
ent
Ernst Welteke, who noted in a speech prepared for delivery last night that =
the
Tobin tax would come at too high a cost.  "Foreign trade in goods and servi=
ces
is bound to suffer as well," he is quoted as saying.  "In the end, the
wealth-enhancing international division of labor will be hampered."

In times of economic distress, he also noted, a Tobin tax would be ineffect=
ive
because profits from speculative capital movements would far outweigh the c=
ost
of any sensible tax on transactions.





INDONESIA SEEKING DEBT RELIEF, WORLD BANK URGES ACCOUNTABILITY.
Indonesia would seek debt relief from international creditor nations, espec=
ially
those grouped in the Paris Club, in order to ease pressure on the 2002 stat=
e
budget, reports the Jakarta Post.  "I don't want to use the word haircut, b=
ut we
are seeking debt relief from the Paris Club donor countries," Boediono is q=
uoted
as saying after he was asked to respond to a statement by Vice President Ha=
mzah
Haz that Indonesia would seek a reduction in its debt from international do=
nor
countries in order to ease pressure on the state budget.

Boediono said the government would try its best to secure debt relief from =
the
Paris Club donor countries.  "Debt relief could also mean delaying the paym=
ent
of our debt to the Paris Club donors," said Boediono, adding that the move =
was
taken in view of President Megawati Sukarnoputri's appeal to international =
donor
countries to give Indonesia some breathing space in honoring its internatio=
nal
obligations.

State Minister for Development Planning and National Development Planning B=
oard
(Bappenas) Chairman Kwik Kian Gie also admitted yesterday that the governme=
nt
had long been seeking debt relief from donor countries.  "But the request w=
as
vehemently rejected by donor countries, who argued that Indonesia was not
entitled to a haircut," Kwik was quoted as saying by Detik.com.

According to Kwik, Indonesia could request a debt reduction, "but if Indone=
sia
unilaterally decides not to service its debt, an economic embargo would
immediately be imposed on it and not a single dollar would flow into the co=
untry
either from the Consultative Group on Indonesia, the World Bank or the IMF.=
"

Indonesia's sovereign debt is estimated at around $70 billion, notes the st=
ory.
The government is scheduled to meet with the Paris Club early next year to =
seek
the rescheduling of debts maturing this year and next year.

In other news from Indonesia, Agence France-Presse reports that lack of
accountability in Indonesia's public sector was a major challenge to its
economic reform program, World Bank country director Mark Baird said yester=
day.
Political reforms since the fall of the Suharto government had increased
transparency, Baird noted, but added that more accountability was needed.

"We don't really have proper accountability to deal with these problems and=
 that
gap is posing a major challenge to Indonesia," he said during the launch of=
 an
aid project. The government's letter of intent on reforms, signed on August=
 27
with the IMF, contained some measures for improving accountability, he note=
d,
but he said these could not be imposed from outside.

"Government reforms should not be a knee-jerk reaction to donor demands," h=
e was
quoted as saying by AFX-Asia.  Rather, they should be formulated in line wi=
th
Indonesian culture and practice to reflect ownership by the people rather t=
han
ownership by the IMF.

Baird also said the IMF's reform agenda was crucial for reducing poverty bu=
t had
been criticized for risking civil unrest through policies such as fuel subs=
idy
cuts.  He said such policies must be assessed more in terms of their medium=
-term
impact on poverty reduction and economic stability.  If savings were used
effectively to cut the budget deficit and reallocate spending to poverty
alleviation programs, then raising fuel prices would actually benefit the p=
oor.

"If we cannot get a healthy financial sector, if we cannot get a performing
civil service, if we cannot get a judiciary that upholds the law, then we w=
ill
not be able to sustain growth in this country and investor confidence at
anywhere near the levels needed to create jobs and reduce poverty," Baird s=
aid.

The news comes as the Straits Times (Singapore) reports that millions of po=
or
Indonesians are among the hardest-hit by corruption, as various unofficial
levies charged by low-level officials are eating into their meager earnings=
=2E  A
recent survey conducted by the World Bank and the Partnership for Governanc=
e
Reform Indonesia showed that the poor were affected by corruption in almost=
 all
aspects of their lives-right down to their waste disposal.  According to th=
e
study, entitled "Corruption and the Poor"-which interviewed 1,250 household=
s in
Jakarta, Yogyakarta and Ujung Pandang, South Sulawesi-corruption involving
garbage disposal ranked as one of the most common of all irregularities.





ALSO IN THIS EDITION:
WORLD BANK TO HELP AILING TURKISH MANUFACTURERS.
MANAGUA TELECOMS SALE 'WILL NOT BE REVERSED.'

WORLD BANK TO HELP AILING TURKISH MANUFACTURERS.  The World Bank said yeste=
rday
it was seeking solutions together with the Turkish government and civil
organizations to help the country's manufacturing sector recover from month=
s of
severe financial crisis, reports Reuters.  Manufacturers, particularly medi=
um-
and small-sized businesses, have complained of large losses two crises in
November and February hammered the Turkish economy.  GDP shrank 2.2 percent=
 and
9.3 percent in the first and second quarters of this year, respectively.

"The issue is how to help good companies during the period of economic reco=
very
be able to come through and be able to play an important part in the recove=
ry of
the Turkish economy as we go further," said World Bank country director Aja=
y
Chhibber after a meeting the Turkish Union of Chambers of Commerce.

The IMF and the World Bank have pledged $15.7 billion of loans to help Turk=
ey
overcome the crisis, the story notes.  The program first focused on
macroeconomics and the financial sector, Chhibber said, but "it is now time=
 to
turn to the real sector for coming up with some solutions and options to he=
lp
the competitive part of the real sector to come out of this economic crisis=
=2E"

A delegation from the World Bank, whose share of the program amounts to $4
billion, would continue meeting with Turkey's economic officials and NGOs i=
n
coming days, Chhibber said. Financial aid from the IFC was also under
discussion, he added.


MANAGUA TELECOMS SALE 'WILL NOT BE REVERSED.'  The Swedish company that won=
 a
controversial uncontested auction for Nicaragua's state telecommunications
company said yesterday that legal challenges would not annul the $83 millio=
n
sale, reports the Financial Times (p.8). "We have promises and guarantees f=
rom
the Nicaraguan government. The World Bank and the IMF favored the sale," sa=
id
Anders Noren, vice-president of Telia Swedtel.  "There is too much at stake=
 in
this process for Nicaragua to reverse it. It has been a clear and transpare=
nt
process."

Privatization is a key demand of the IMF to grant Nicaragua debt relief,
although corruption concerns have also held up the initiative, notes the st=
ory.


CONSTRUCTING A NORTH AMERICAN COMMUNITY: COMMENT.  The failure of NAFTA lie=
s in
its incapacity to lift Mexico's economy in a geographically balanced way an=
d to
reduce the income gap between Mexicans on one side and US and Canadian citi=
zens
on the other, writes Robert A. Pastor of Emory University in the Internatio=
nal
Herald Tribune (p.8).  If Europe built too many institutions, NAFTA made th=
e
opposite mistake, argues Pastor: NAFTA lacks institutions to anticipate or
respond to crises or take advantage of opportunities.

The World Bank estimates that Mexico needs $20 billion a year for 10 years =
just
for infrastructure, Pastor notes, saying the three leaders of the NAFTA sho=
uld
establish a North American Development Fund, whose priority would be to con=
nect
the border to central and southern Mexico. If roads were built, investors w=
ould
come, immigration would decline and income disparities would narrow. The bo=
ldest
step now would be to agree to establish a development fund.  It would not n=
eed a
new bureaucracy-the World Bank and the IDB could administer it.  But it wou=
ld
need an injection of funding comparable to that of the Alliance for Progres=
s.


A TALE OF FISH AND FORESTS:  COMMENT.  Destroying traditional cultures in
pursuit of economic ideals does more harm than good, writes John Kay of the
Financial Times (p.11). The massive destruction of the Indonesian forests
started when president Suharto decided to abolish the traditional system of=
 land
tenure in rural assets, which allowed smallholders to cultivate land for th=
eir
own use, with the agreement of the local community. In the same way, Canadi=
an
fishermen were once restricted to meeting the needs of their own boats and =
crew
in the country's eastern seaboard. In 1976, Canadian government imposed its=
 own
"New Order" fisheries policy, and since then the industry rationalized,
prospered and grew until the early 1990s, when there were no more fish to b=
e
found.

The thesis that all government needs to do is to create the institutions of
private property and markets will take care of the rest is one of the most
pernicious doctrines of our times, says Kay. It is a theory that has destro=
yed
not only the Indonesian forests and the West Atlantic fisheries but also th=
e
social structure of Russia and its prospects of economic recovery. The
relationship between institutions and development is much more complex, he
says-and much more interesting.

This is because the thesis that capitalism is necessarily the enemy of the
environment is wrong, too. Developing and preserving resources in order to =
sell
them to future generations may not be as morally admirable as recycling gla=
ss
bottles and old newspapers, but it is far more important.  The stability of
institutions is vital, too. The notion of the noble primitive in tune with =
the
environment-the Borneo farmer or the Canadian fisherman-is a romantic fanta=
sy,
says Kay, but it is not complete nonsense either.  Where such communities h=
ave
operated in stable conditions for generations, this is almost certainly bec=
ause
they have successfully developed mechanisms for regulating the relationship
between themselves and their environment.

Sometimes, disruption of these mechanisms by technological or institutional
change is unavoidable, says Kay. But to impose such disruption deliberately=
, in
pursuit of a theory of economic development, will usually do more harm than
good. And that is why the fish have gone and the trees are burning.


AT RACE TALKS, DELEGATES CITE EARLY MISTRUST. As South Africa and the Europ=
ean
Union scrambled to salvage a United Nations conference on racism, the deleg=
ates
who had gathered from across the world were trying to figure out what went =
wrong
and how, reports the New York Times (A1). Whether the negotiators will find=
 an
acceptable compromise remains to be seen. But some diplomats here said the
conference was doomed from the start because its organizers failed to resol=
ve
the prickly issues before the meeting opened last week.

Diplomats familiar with the negotiations say Robinson, the conference
coordinator, South African officials and others have known for months that
trouble was brewing. United Nations officials insisted publicly last month =
that
the "Zionism equals racism" phrase was dead, but they were still building a
conference around draft documents that described Israel's treatment of the
Palestinians as a "new kind of apartheid."

The new negotiating team, which includes representatives from South Africa,
Belgium, Norway, Namibia and the Arab League, plans to complete its
deliberations tomorrow. Today, Robinson said she believed that a chance sti=
ll
existed to salvage the conference by coming up with some consensus on langu=
age
describing the Middle East conflict. She said she believed that the team wo=
uld
develop a declaration against racism that could be supported by all nations=
=2E


BRIEFLY NOTED...Water shortages could become the greatest threat to the sec=
urity
of the world's food supplies, the FT reports the International Food Policy
Research Institute has warned.

Just days after the mini-summit of WTO trade representatives in Mexico, rep=
orts
Les Echos (France, p.6), the agriculture and trade ministers of the Cairns =
group
of agricultural exporting countries are gathering in Uruguay to outline the=
ir
position at the WTO ministerial meeting in Doha, Qatar in November, when th=
ey
plan to oppose the EU's reluctance to lower protectionist measures and
agricultural subsidies.

The world's newest and biggest trade union grouping, Union Network Internat=
ional
(UNI), set up to meet the challenge of adapting union activity to a globali=
zed
and technologically-transformed world economy, holds its first-ever congres=
s
this week, reports AFP, noting that the union says  is pressing for the
involvement of the ILO and global unions in discussions on reforming the wo=
rld
economy and trade, which would mean reforming institutions such as the UN, =
the
IMF, the World Bank and the WTO by including representatives of trade union=
s and
"civil society".

An OECD report says that neither dollarization nor indexing to strong curre=
ncies
through currency boards nor pure currency flotations offer can offer securi=
ty,
stability or durability to developing-country economies, Les Echos (France,=
 p.6)
reports, noting that Jorge Braga de Macedo of the OECD's Development Center=
 says
the putting in place of institutions is more important than the index of
reference.

One of the most notable features of the latest international attempt to res=
cue
Argentina from the threat of debt default is that all parties involved in t=
he 12
days of negotiations in Washington last month walked away happy, says Dow J=
ones,
noting that Argentine Finance Secretary Daniel Marx returned to Buenos Aire=
s
with the promise of an additional $8 billion in additional finance to suppl=
ement
the $14 billion in IMF loans already pledged to his government; the IMF aga=
in
won widespread support for another bailout; and the US Treasury was quietly
satisfied that it had nudged the Fund into focusing on Argentina's core
problem-its debt.

The IMF yesterday expressed concern over the effects of Bulgarian fiscal re=
forms
proposed in August by the new government of Prime Minister Simeon Saxe-Cobu=
rg,
reports AFP, quoting a Fund spokeswoman as saying, "Our concern at present =
is
the potential fiscal impact of some of these tax reductions, to what extent=
 it
will imply revenue losses and to what extent they can be recompensed."

Sri Lanka's central bank is looking to revise per capita income upwards thi=
s
year using a lower-than-expected population figure from a recently conclude=
d
census, AFP reports, noting that per capita GDP could rise to about $886 wh=
en
the lower population figure of 18.7 million people from the recently releas=
ed
census is used, but that this could disqualify the country from interest-fr=
ee
borrowing from the World Bank's IDA, which currently has a per capita GDP c=
utoff
of $885...Indian Prime Minister Atal Behari Vajpayee has unveiled a plan to
revive his country's slowing economy with fresh reforms, BBC Online reports=
=2E  At
a meeting on Tuesday, he pledged US$16 billion equivalent to kick-start the
economy.  He also set up a cabinet committee on economic strategy with an a=
im to
provide direction for growth.

The government of the Philippines will apply shortly to the World Bank for =
a
$400 million loan to finance reforms in its expenditure management and tax
collections systems, BusinessWorld  (Philippines) reports.

Last month in Kenya, a proposal came before Parliament that would have
established an independent anticorruption authority and entrenched it in th=
e
Constitution, but the bill failed, because reformers said it was not strict
enough, the Christian Science Monitor (p.7) reports.  It was just the lates=
t
high-profile failure to handle a problem that analysts say could devastate
Kenya's economy.

So far, Jordan is winning a key struggle to cope with economic contagion fr=
om
the Israeli-Palestinian conflict next door, the Wall Street Journal (p.A21)
reports diplomats and Jordanian officials say.  Despite the decline in regi=
onal
tourism after 11 months of Mideast turbulence, the overall number of touris=
ts
has grown by 11 percent so far this year.  The value of the Jordanian dinar=
 has
been stable, the economy continues to grow, and after a number of successfu=
l
privatizations, an IMF program also remains on track...The government of Ye=
men
has approved the partial privatization of the country's leading bank, the B=
ank
of Yemen, BBC Online reports.  In recent years the World Bank and IMF have
encouraged economic restructuring in Yemen, the story says.






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