Divisions emerge over more funds for World Bank
Istanbul - Governments appeared divided Monday over whether the World Bank and other development institutions should get a fresh influx of cash for lending to the world's poorest countries.
US Treasury Secretary Timothy Geithner said any new funds would be linked with reforms at the world's major development banks, while French Finance Minister Christine Lagarde said over the weekend that she didn't believe more capital was needed for the time being.
Geithner said a decision was expected in the first half of next year, but developing countries were pushing for an earlier agreement as finance ministers gathered for a meeting of the World Bank and International Monetary Fund Development Committee in Istanbul.
"Given the size of projected demand associated with the current crisis, the (World Bank) needs a general capital increase," said Indonesian Finance Minister Sri Mulyani Indrawati in a statement. "We urge members to come to an early agreement."
In April, countries called on the World Bank to scale up its lending by 100 billion dollars over three years to help poor countries battle the worst global recession in decades.
World Bank President Robert Zoellick said last week that record demand for loans would soon outstrip supply, and that his institution could face "serious constraints" by the middle of next year.
"Our shareholders are going to have to calculate how close they want to run us to the edge," Zoellick said.
Geithner said that already-high budget deficits back home meant donor countries wanted assurances that the money was necessary, and that "any new resources will be managed well and used effectively."
"To this end, we will be seeking critical institutional reforms in any consideration of additional resources," he said, calling for greater transparency and accountability. (dpa)