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Britain releases development funds to World Bank

05 Dec 2006 20:26:00 GMT
Source: Reuters

LONDON, Dec 5 (Reuters) - Britain said on Tuesday it would release a payment of 50 million pounds ($98.83 million) to the World Bank that it had threatened to withhold due to concerns over the bank's policies in the developing world.

Britain had linked payment to the World Bank reforming the conditions it attaches to its aid and said in September it was considering not handing over the funds.

But a World Bank report has since said it was moving away from making aid conditional on economic policy changes on developing countries.

"Last year the bank committed to a number of changes to its approach, to ensure they reflect the priorities of national governments," British International Development Minister Hilary Benn said in a statement.

"Until now, I had not seen the evidence to show that the bank had made enough progress in implementing these changes. But having now considered the report ... it does show real progress, and that is why I have decided to release the 50 million pounds," he said.

But, he said, Britain's contribution to the World Bank's development budget next year would depend on the body making more progress and not using conditions to impose economic policies on poor countries.

The 50 million pounds was separate from Britain's main commitment to the Washington-based institution, which London said in 2005 would total 1.3 billion pounds over three years.

Britain has been vocal in trying to secure a better deal for African recipients of aid. Prime Minister Tony Blair put African development at the centre of his presidency of the Group of Eight (G8) rich nations last year.

Privatisation and trade liberalisation were areas where the World Bank should allow developing nations to chart their own course without interference, Benn has said.

Britain is a significant shareholder in the bank, holding about 5 percent, according to the Web site of Britain's Department of International Development.

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Last updated:Wed Dec 6 11:19:08 2006