TRADE, DEBT AND AIDS DOMINATE IMF, WORLD BANK MEETINGS
by Gumisai Mutume
Washington, 17 Apr 2000 (IPS) -- The World Bank and International Monetary Fund ended their Spring meetings Monday with calls for an intensification of action to combat AIDS/HIV, for the expansion of trade to rid developing countries of poverty and for the speeding up of debt forgiveness.
The Spring meetings of the Bank and Fund are centred around meetings of finance ministers, central bank governors and officials of the Bank and IMF at two committees -- the International Monetary Fund Committee (IMFC) and the Development Committee. The IMFC concluded its meeting Sunday.
World Bank president James Wolfensohn told a press briefing at the conclusion of the Development Committee meeting Monday that strengthening efforts to fight AIDS was one of the most important issues under discussion in that meeting. "I said to the committee that for efforts to finance AIDS there will be no limits to the financing they get from the Bank," Wolfensohn said. "We are prepared to fund a greater part of it and ensure that no sensible programme is stopped for lack of money."
The AIDS epidemic is ravaging sub-Saharan Africa where 23 million people (85% of the global toll) live and the Bank warns of dire economic consequences globally.
In Zimbabwe for instance where the infection rate exceeds 25 percent, annual per capita growth is at least one percentage point less than it would otherwise be the Bank says.
The Development Committee also known as the Joint Ministerial Committee on the Transfer of Real Resources to Developing Countries was chaired by Thai Finance Minister Tarrin Nimmanahaeminda.
It also discussed trade issues with developing countries amplifying the call for a more equitable trading system to allow them access to markets of the industrialised countries. "The events at the third ministerial conference of the World Trade Organisation in Seattle should prompt our institutions to develop a more equitable multilateral trading system which takes the development dimension duly into account," Morocco's Finance Minister Fathallah Oualalou said in a statement to the meeting.
"Urgent measures include eliminating trade barriers to exports from the poorest countries and launching new negotiations to liberalise trade in those sectors in which developing countries enjoy a comparative advantage."
The average tariffs in developed countries on manufactured imports are now relatively low - about four percent. But with tariff peaks and escalation at stages of processing, they are extremely high on products in which developing countries have a comparative advantage, the Bank notes.
For instance, meat product exports from developing countries attract a 826% duty in the European Union, the Bank says in a working paper to the Development Committee. On processed food products in Japan the tax is 781 %, 147% on fruit and processed products in the United States and 123% on footwear in Japan.
"While recognising that this is not the forum to decide how to reduce and/or remove these barriers, it is our conviction that since the primary objective of the Development Committee is to focus on issues that promote growth and accelerate the pace of development, we must focus on these barriers so that substantial pressures can be created," says Yashwant Sinha, Indian Finance Minister.
The World Bank forecasts that if slow economic growth and intermittent crises persist the number of people living on less than one dollar a day will remain roughly constant at the current 1.2 billion by 2008.
But the figure would fall to 700 million under a brighter scenario of more rapid growth. However even under such a bright scenario, Latin America, the Caribbean and Sub-Saharan Africa would see little change.
The last decade witnessed a series of international meetings that set several goals to be achieved by 2015 including halving poverty, ensuring universal education and reversing trends in the loss of environmental resources. At the current pace, these seem unattainable.
"The experience of the last two decades suggest that the world economy, often portrayed as a two-way division between rich and poor now seems to be at the point of de facto division into three groups of industrialised countries, middle income developing countries (more or less successful participants in global trade) and the remaining group of almost 80 ... which are failing to keep pace with globalisation," the Bank says.
Despite multiple efforts to reform, the majority of these 80 countries, comprising 35% of the world's population, continue to fail to grow or to integrate into the global economy. The share of global trade of the 28 least developed countries has fallen from 0.8% in 1980 to less than 0.4% by 1997.
UNCTAD Secretary General Rubens Ricupero says biases in the world economy continue to stymie growth prospects in the developing world and there is need to correct this.
"The unbalanced nature of the globalisation process is clearly visible in its selective nature, with finance moving much further and indeed faster than trade and or real investment and the movement of labour almost entirely excluded," says Ricupero.
"But even more significantly, the architects of integration have all too often ignored or downplayed the concerns of developing countries."
Also of concern to developing countries was how best to find ways of managing global capital flows that ravaged Asian economies in 1997 and then saw crises in Russia and Brazil, slowing down the world economy.
"The high volatility of private international capital flows remains a source of ongoing concern to the members of this constituency," says Jorge Giordani, Minister for Development Planning in Venezuela.
"This volatility suggests that foreign investors have reacted in the absence of a fair and balanced assessment of economic conditions in the developing countries and of the actual ability of these countries to meet their financial obligations." (SUNS4651)