By Patrice Hill
The Washington Times
October 19, 2007
The World Bank and International Monetary Fund are grappling with diminished roles and relevance since China, Russia and other rapidly developing countries have amassed wealth to the point they now outstrip the Bretton Woods institutions as the biggest lenders in the world.
The $600 billion in reserves amassed by China and other emerging nations just in the first half of this year doubled the total reserves of the IMF, while those same nations have established “sovereign wealth funds” totaling $3 trillion that dwarf the aid budgets of the World Bank, IMF and Western nations. The U.S. government, by comparison, provides about $11 billion a year in international aid.
China, dipping into its more than $1 trillion in cash reserves, has taken the lead and is particularly eclipsing the World Bank in Africa by providing resource-rich countries such as Sudan with no-strings-attached loans in exchange for stable supplies of raw materials for its fast-growing economy.
The World Bank, by contrast, usually attaches unpopular conditions such as forced privatization to its loans and scrutinizes the corruption and human rights records of client countries. Development experts say the Chinese loans to corrupt regimes in Africa has made it easier for them to avoid international pressure to clean up graft.
Robert B. Zoellick, the new president of the World Bank, “has his work cut out,” said Elizabeth Stuart …..
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