IDA Donors Agree To Begin Fund Replenishment With AM-IMF Loans
SEOUL, South Korea (AP) _ Representatives of 33 donor nations agreed Saturday to begin negotiations early next year on replenishing the loan fund of the International Development Association.
The IDA, the World Bank affiliate that provides interest-free loans to the poorest countries, lent about $3 billion in the year that ended June 30.
Moeen Qureshi, an IDA senior vice president who led the meeting, said participants agreed to try to complete the replenishment, the eighth in the IDA’s history, a year from now, in time for next year’s annual World Bank- International Monetary Fund meeting.
The new monies would be lent between mid-1987 and mid-1990. The IDA replenishes its loan fund every three years.
Qureshi said the United States ″very strongly supported the taking up of the replenishment as soon as possible.″ Until now the United States had not committed itself to the funding effort.
He told reporters the donor governments agreed in their closed-door session to continue IDA’s loan program but said many representatives ″expressed a desire to reconsider the terms″ under which the agency lends money.
″No decisions were made and governments agreed to discuss this issue further″ at a meeting of the donor countries likely to be held in Paris next January, he said.
Participants indicated some nations, including the United States, proposed tightening loan terms by shortening the repayment period - now 50 years - or by charging interest, particularly for countries somewhat better off. Such steps would increase the amount of money available for making new loans.
Qureshi declined to specify how much money the agency was seeking in the fund replenishment. During the last replenishment, he said, ″numbers were floated around that did not yet have support in political capitals″ and the funding target was not achieved.
Congress stymied attempts by former President Carter to give more than $1 billion a year to the organization. The Reagan administration cut the U.S. contribution to $750 million a year and other countries also lowered their contributions.
As a result, only $9 billion was raised for the current three-year period. In addition, the IDA created a special short-term $1.3 billion fund to aid African nations suffering from a serious drought and famine. The United States did not contribute.
Qureshi called the combined loan fund of $10.3 billion ″completely inadequate″ for the borrowing needs of poor countries.
In the year just ended, IDA approved 105 loans to 45 countries. About 93 percent of the credits were to countries where the average income per citizen is less than $400 per year.
The IDA makes loans only to countries with annual per capita incomes of less than $790.