Jubilee Scotland

1. UK Withholds £50 million Payment over World Bank Conditionality
In another strong signal that campaigning works, the UK made an announcement on the eve of the World Bank and IMF meetings in Singapore that they would continue to withhold a payment of £50 million unless the World Bank cut the strings to the loans they make to poor countries.

This is a big boost for campaigners who have sent countless cut the strings postcards and emails to the UK government over the past 6 months. However, the UK demand for an end to harmful conditions by the World Bank does not mention the conditions that are attached to debt relief.

The conditions that come with the HIPC debt relief process are those that can be the most damaging, including demands for privatisation and trade liberalisation. But whereas the UK is damning of the World Bank when they apply these conditions to loans, they remain silent on the same conditions attached to debt relief.

Hilary Benn, the Secretary of State for International Development has been disappointed by the lack of progress by the World Bank in moving away from controversial economic conditions. Benn has decided to withhold £50 million of the UK budget to the World Bank until he has seen proof that the World Bank has changed. The World Bank has agreed to publish a report by November, which will detail the extent of its reform of loan conditions.

Jubilee Scotland will be campaigning for Hilary Benn not to ignore the strings attached to debt relief when he criticises World Bank conditionality. To send Hilary Benn an email click here.

2. World Bank and IMF warn poor countries not to create a new debt crisis
After the debt relief that 20 countries received this year, both the World Bank and IMF warned that this debt relief should not translate into another lending and borrowing spree and therefore another debt crisis. There is concern that new big lenders such as China and India who provide loans need to be more responsible in where they loan and why.

That this statement comes from the institutions that are commonly charged with irresponsible lending is rich to say the least. The World Bank and IMF have consistently pushed loans on poor countries and therefore have little authority to preach about responsible lending.

However, this reflects the changes that are happening at the World Bank and IMF where four countries China, Mexico, South Korea and Turkey all saw their economic power reflected in an increase in their votes at the IMF. This means that these countries now have more say in how much the IMF lends to poor countries. But the message seems to be that with this new power comes greater responsibility, a message that the World Bank and IMF should heed themselves.

3. World Bank anti-corruption strategy reined in
In an embarrassing climb down by the World Bank President Paul Wolfowitz, the World Bank board of governors have taken control of overseeing the new World Bank anti-corruption strategy.

The board took control of the agenda back from president Wolfowitz, stressing "the importance of Board oversight of the strategy as it is further developed". Hilary Benn, UK development secretary, was seen to play a key role, withholding £50 million from the UK contribution to the Bank, pending evidence of further progress in reducing conditionality. This was seen by most observers as a snub to president Wolfowitz over concerns that his anti-corruption agenda would amount to significantly increased conditionality, or a cutting-off of aid to the poorest countries where corruption is a serious problem.