'Dull Meet'Makes For Lots Of News

For starters, the Heavily Indebted Poor Countries (HIPC) initiative finally seemed set to swing into action. Gathering just before the meetings, the rich countries decided to up their debt forgiveness ceiling to 80 per cent, thus clearing the last obstacle in the way of the programme.

Both the World Bank and the IMF have said that they are now prepared to deal with the poorest countries on a case by case basis. Only one condition has been set: prospective receipients must agree to implement the Fund's structural adjustment programme over two three year periods. The increased debt forgiveness ceiling also bought a breather for the potentially contentious issue of gold sales. Camdessus, along with a majority of the IMF board, was inclined to sell upto $2 billion of the Fund's gold reserves to fund the debt initiative. But Germany, Italy and Switzerland were opposed to the idea arguing that it would set a bad precedent.

 

Gold sales have now been temporarily deferred as the last option, after exhausting all other bilateral and multilateral sources of funding.

Bilateral contributions will also form the backbone of the Fund's effort for a self sustaining Enhanced Structural Adjustment Facility (ESAF), the concessional lending window, that was slated to run out of funds for the period 2000-05.

There was much more sound and fury over at the World Bank where the International Development Association (IDA) suddenly found itself with a questionable future.

At the crux of the issue was a one year interim fund, set up to help the facility bridge the lack of American contributions. The other donors decided to ban US firms from procurements under the facility, the Americans objected,and the result was uncertainly over IDA's future. Bank president James D.Wolfensohn said he had a very positive feeling about IDA, but still warned that it wasn't too early to begin campaigning for funds for IDA-12.

Wolfensohn,himself, created a stir by making a drive against the cancer of corruption, a major element in his address to the annual meetings.

The initiative was welcomed,but atleast some member countries worried that the bank may be treading into slippery territory.

Responding, Wolfensohn said the initiative would concentrate on weeding corruption out of Bank projects, not making political judgment calls on nations.

The Bank president also faced much criticism about the institutions's much-touted guarantee programme.

Faced with opposition from governments that resented having to offer counter-guarantees and a private sector that wanted access to the instrument,-Wolfensohn said he was looking at proposals to increase the flexibility of the programme.