- The Washington Times - Monday, April 22, 2002

World financial leaders, under pressure to battle poverty far more effectively after September 11, announced a major effort to educate more poor children yesterday as they concluded weekend discussions on the global economy.
They failed, however, to settle a contentious dispute between the United States and Europe over a World Bank loan program for the world's poorest countries.
At a closing news conference, World Bank President James Wolfensohn sought to play down the failure, saying there was a real commitment among all countries to keep the program "strong and growing" under new guidelines emphasizing country accountability. But he did not suggest when the dispute might be resolved.
The World Bank initiative on education will select 10 poor nations for a pilot program to develop the best approaches to achieving universal primary education by 2015. Currently, 125 million children in poor nations, two-thirds of them girls, do not attend school.
Mr. Wolfensohn said he hoped the participating countries could be selected by late June, when the seven top industrial nations and Russia meet in Canada for their annual economic summit, so funding commitments could be pursued.
Only Germany and the Netherlands have pledged to support the pilot program, expected to cost between $2.5 billion and $5 billion. Among countries under consideration for the pilot program are Tanzania, Malawi, Senegal and India.
Complaints against global capitalism have gained new urgency since the September 11 attacks.
Mr. Wolfensohn has been a leading proponent of the view that the United States and other wealthy countries will not defeat terrorism unless they commit more money to eradicate poverty.
The Bush administration last month proposed an increase in U.S. foreign aid of $10 billion over the 2004-2006 period, including an 18 percent increase in U.S. support for a World Bank program to help the poorest countries.
That offer, however, came with a demand that the World Bank use more direct grants to poor nations rather than loans.
European countries say that approach would deplete World Bank resources unless wealthy countries significantly increase their contributions.
Treasury Secretary Paul H. O'Neill, who predicted the discussions on the issue would be "testy," complained in a speech to the World Bank's Development Committee that the United States had shown a "high degree of flexibility." He said opponents must show a similar willingness to compromise.
But Clare Short, Britain's secretary for development, said the U.S. effort had "delayed considerably" the campaign to boost World Bank resources by a June 30 deadline. She said the U.S. plan would threaten the loan program's "future financial sustainability."

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