World Bank wants to work with China in fighting poverty

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WASHINGTON, Oct 22 (AFP): World Bank president Robert Zoellick yesterday invited China to team up with the 185-nation development lender to fight global poverty and said he would visit Beijing in December.
"China is an important partner in the international economy on growth and development issues and I therefore think it is incumbent on the World Bank to treat China as a partner ... (and) also to be in position to work with China in third countries," Zoellick said at a news conference following a meeting of Bank policymakers.
"I think Chinese investment in Africa can be very beneficial. It can help the country develop infrastructure, it can help (countries) access some of the natural resources," he said.
"At the same time there will be issues that the countries need to face in terms of the transparency of the investment and how it fits with past efforts to have debt forgiveness and whether this increases the debt load," he added.
Zoellick added that he would travel to China in December "to talk about how we can work together."
Western nations however have warned that Chinese lending practices risk saddling poor countries with extra debt.
German Finance Minister Peer Steinbrueck, at a meeting of Group of Eight finance ministers in May, maintained that Chinese lending in Africa, driven by a need to acquire natural resources, ran counter to approaches advocated by the G8 that seek to avoid heavy debt accumulation by poor countries.
"We see there's a growing interest by China related to African resources, and by their relation to African states, they are willing, when buying resources, to re-launch ... what we wanted to break with our debt relief," he said then.
Zoellick's overture to Beijing comes as poor countries are looking for aid from sources other than the World Bank, particularly from cash-rich emerging states such as China that provide loans on easier terms.
Debt Relief International, an activist group, Sunday highlighted the G8's failure to deliver on its aid promises or move fast enough to cancel obligations weighing on some of the world's most impoverished states.
"Countries from Africa are being forced to look to other donors such as China, or are looking at borrowing on capital markets in the absence of the aid promised by the G8," Debt Relief International said.
Presiding over his first Bank policy-setting meeting Zoellick, a former US trade chief and executive at Wall Street investment titan Goldman Sachs, vowed to place agriculture at the heart of the Bank's anti-poverty drive while mobilising private financing in the battle.
"We need a 21st century 'green revolution' designed for the special and diverse needs of Africa," Zoellick said at the weekend annual meeting of the Bank.
The initiatives are among the first proposed by Zoellick following his appointment in June after the resignation of Paul Wolfowitz in the midst of a favouritism scandal.
In report released this week the Bank pledged to boost lending to the farm sector in poor countries, where an estimated 900 million people live on less than a dollar a day, after allowing it to decline in the 1980s and 1990s.
The report said lending to agriculture began to pick up four years ago and would increase further. Commitments this year are expected to come to 3.1 billion dollars.
Nevertheless, while 75 percent of the world's poor live in rural areas "a mere 4.0 percent of official development assistance goes to agriculture in developing countries," the report found.
Zoellick has also floated a controversial proposal that would allow private-sector business to help finance the International Development Association (IDA), the Bank's main lender to the most impoverished countries.
He said he did not expect any "particular problem" with getting approval by the Bank executive board for the project, but for some the plan raises conflict of interest concerns.
The World Bank is "a public institution accountable to citizens," not to shareholders, said Sebastien Fourmy of Oxfam International.