WASHINGTON, Sept 25, 2007 (AFP) – For the first time in almost a decade the World Bank is set to make meaningful cuts in the interest rates it charges China, Brazil, Mexico and other big developing countries, The Wall Street Journal Europe reports Tuesday.
Under a deal to increase assistance to poor nations, unnamed bank officials told the Journal that “as part of the compromise, the World Bank will contribute as much as 3.5 billion dollars to the International Development Association, a World Bank unit that provides grants and no-interest loans to the world’s 80 poorest nations.”
“The compromise was pushed hard by the World Bank’s new president, Robert Zoellick, who has emerged as a pragmatic horse trader, unsympathetic to conservative critics who say the bank should cut off lending to countries that can borrow easily on private markets,” the report said.
Also in the deal “in exchange for lowering interest rates to pre-Asian-crisis levels, Zoellick pressed Brazil, Mexico, China and other middle-income countries to support a substantial contribution to the IDA by the International Finance Corp., a World Bank arm that lends to private companies, rather than governments,” the report added.
Monday a top IMF official said the International Mo