December 14, 2007 / 11:54 AM / 11 years ago

U.S. loses status as top World Bank donor to Britain

BERLIN (Reuters) - The United States lost its status as the largest donor to the World Bank’s main fund for poor countries, the lender said on Friday, as Britain pledged more in the latest funding round which secured a record amount of aid.

World Bank President Robert Zoellick speaks during a meeting with editors in Jakarta December 13, 2007. Zoellick said on Thursday he was confident the World Bank would raise record funds to aid the poorest countries. REUTERS/Crack Palinggi

After negotiations that began in March in Paris and ended with two days of talks in Berlin, Britain promised $4.2 billion for the period from July 2008 through June 2011, World Bank President Robert Zoellick told reporters on a conference call.

He declined to say how much the United States had pledged before a statement from the U.S. Treasury due later on Friday.

Losing its position as the top donor could weaken Washington’s influence over the World Bank, which is the largest provider of development assistance to poor countries, and over the policies that decide how its cash is spent.

“The U.S. pledged a very substantial contribution but is now down to second place after Britain,” World Bank Vice President Philippe Le Houerou told a news conference in Berlin.

The Washington-based lender conducts a fund-raising campaign among its richer members every three years to determine funding for the International Development Association (IDA), the bank’s lending arm.

Forty-five donor countries, the most ever, promised a record total of $25.1 billion at the Berlin talks, with a further $16.5 billion coming from the bank and previous donor pledges for financing debt forgiveness, officials told the news conference.

The total of $41.6 billion, also a record, represents an increase of $9.5 billion over the previous funding period and will support around 80 countries, mainly in Africa.

In a coup for Zoellick, who is in China this week, Beijing was one of six nations joining the list of donors for the first time, along with Cyprus, Egypt, and the three Baltic states.

“We’re feeling pretty positive but I’m glad I don’t have to do this every year,” Zoellick said. “The donor community has demonstrated its full commitment to helping countries overcome poverty and achieve sustainable growth, especially in Africa.”

WEAKER DOLLAR

The latest talks were complicated by slowing economic growth in rich nations and the weakening dollar, which inflates contributions by some other countries when calculated in the U.S. currency.

At the same time, the bank’s mission is widening, with governments demanding more help in developing sophisticated economies and markets.

The United States, whose economy is almost six times as big as Britain’s, has been keen to hold on to its No. 1 spot as the bank’s largest donor but is also struggling with a budget stretched by the wars in Iraq and Afghanistan.

The U.S. share of contributions has slowly declined from 22 percent in 1960, the year of the fund’s inception. After the last round of IDA negotiations in 2005, the U.S. share stood at 13.8 percent and Britain’s at 13.2 percent.

Germany made the fourth biggest contribution to the new funding round, boosting its pledge by 18.57 percent to 1.514 billion euros ($2.20 billion), the Development Ministry said.

Zoellick said the money would go towards helping 2.5 billion people in poor nations across five continents.

IDA-financed projects support education, basic health services, clean water and sanitation, as well as environmental safeguards, infrastructure and policy and institutional reform.

Reporting by Iain Rogers; editing by Tony Austin

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below