Finance meeting focuses on poverty

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Posted 10:36AM on Sunday, April 21, 2002

WASHINGTON - Finance ministers from around the world focused on problems facing the estimated 1 billion people who live in poverty as their weekend of negotiations, debate and party-going drew to a close. World Bank President James Wolfensohn planned to announce a new development compact Sunday for education to get all children into primary school by 2015. Some 125 million children, many of them in the world's poorest nations, don't go to school, two thirds of them girls. ``There is a growing understanding that education is the number one priority,'' facing poor countries Wolfensohn said before the meeting of the bank's policy-setting 24-member Development Committee. He said the education compact would start with a pilot projects in 10 countries yet to be named and then extend to other nations based on lessons learned. The meeting of the bank's steering committee followed Saturday's session of the International Monetary Fund's policy-making group and separate talks bringing together ministers and central bank governors from the Group of Seven major industrialized nations. The G-7 officials agreed to intensify efforts to combat terrorist financing and also adopted a plan to better deal with international debt crises. Finance officials acknowledged that rising oil prices and Argentina's economic woes threaten the fledgling global recovery. But they expressed confidence that the world's economy was on the mend following a U.S. recession and the Sept. 11 attacks. ``Economic recovery from the slowdown is under way,'' finance ministers and central bank presidents from the seven wealthiest countries said in a joint statement after the discussions among the United States, Japan, Germany, France, Britain, Italy and Canada. The IMF told Argentina, facing a deepening financial crisis, it had to make greater efforts to overhaul its economy and rein in spending by its provinces. IMF Managing Director Horst Koehler told a news conference Saturday night that he expected the IMF would not be ready to send a team to Argentina to negotiate new loans until probably mid-May. Published reports said Argentina is seeking $9 billion in new loans to stabilize its finances. The country closed its banks on Friday to halt a further drain on deposits. While the ministers met, protesters who have long complained that the IMF and World Bank have not done enough to alleviate poverty turned out for a series of demonstrations. They made no effort to block access to the meeting sites, which were heavily guarded by police whose riot gear was at the ready. As police helicopters hovered overhead, Treasury Secretary Paul O'Neill, who hosted the G-7 meeting with Federal Reserve Chairman Alan Greenspan said the group still was split on one major U.S. initiative - increasing World Bank aid to the world's poorest countries in the form of grants. Virtually all World Bank assistance now comes through loans that have to be repaid. European countries said a reliance on grants would deplete World Bank resources unless wealthy nations agreed to significant increases in their contributions. The battle against poverty, which is seen as a breeding ground for terrorism, has gained new urgency among the wealthy nations since Sept. 11. The finance officials also called on the IMF and World Bank to make assessments of their member countries' efforts to crack down on money laundering and terrorist financing a part of their regular economic reviews.