Global Policy Forum

The head of the World Bank, James Wolfensohn, has called for greater help from Western countries for the world's poor. Speaking in advance of the IMF/World Bank annual meetings in Prague, Mr Wolfensohn said that the bank was adopting a radical new approach to poverty, with less emphasis on economic growth and more on the importance of empowerment.

But he said that the falling level of official development assistance, and continued trade barriers to poor countries' products, are jeopardising their chances of tackling poverty, and could cause serious dislocation around the world. "The fact that official development assistance has dropped is a crime," Mr Wolfensohn said.

And opening up rich country markets could boost incomes in the poorest countries by $40bn each year, he added. Mr Wolfensohn urged the world to seize the opportunity given by the favourable economic climate to increase aid - even as he warned that if oil prices continued to stay above $30 a barrel, growth rates in oil-importing countries could decline by up to 0.75%.

Thousands of demonstrators are converging on Prague, determined to protest against globalisation and the failure of the World Bank to tackle the debt issue. Andrew Pendleton of Christian Aid told the BBC that it remained to be seen whether Mr Wolfensohn was "all mouth and no trousers" or whether any concrete measures of additional aid would be forthcoming from the world's rich countries.

Debt protest

Mr. Wolfensohn rejected calls from campaigners like Jubilee 2000 for the World Bank to cancel 100% of the debts it is owed by poor countries. He said that such a move - which could involve up to $70bn of World Bank loans - would mean that the Bank would have greatly reduced funds to lend in the future, since it depends on the repayments to fund future programmes.

However, he called on the US Congress to pass legislation to ensure that the bank's HIPC (highly indebted poor countries) initiative was fully funded. He added that he and Horst Kohler, the new head of the International Monetary Fund, were 'personally supervising' the implementation of the plan to offer debt relief to 20 countries by the end of the year - half the number eligible for the programme. Tony Burdon of Oxfam said that the "World Bank and its board continue to fail to deliver on its mandate and his vision, especially on debt relief."

Globalisation fears

Mr Wolfensohn said it was "no bad thing" that the protests were taking place in Prague, as it stimulated awareness of the issues of global inequality and poverty. But he told the BBC that the door to dialogue was "wide open" and he hoped the protestors would talk rather than "burn the building down." He called on multinationals to accept social responsibility in developing countries.

Mr Wolfensohn warned that the growing global injustice was the greatest threat to social stability around the world, and argued that rich countries should recognise that it was in their self interest to help the poor. At present the richest 20% of the world's population controlled 80% of global economic output, and "these inequalities cannot continue."

He praised the UK Prime Minister Tony Blair and UK Chancellor Gordon Brown for their political leadership in responding positively to these issues. Mr Wolfensohn, a former investment banker, was recently reappointed to a second term as head of the World Bank. He has had to respond to major criticisms of its work from both left and right, with the US Congress sponsoring the highly critical Meltzer report which called for many of its functions to be delegated to regional banks.

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