Bush's remarks came during his speech July 17 at the World Bank headquarters in Washington where he suggested the imperialist financial institution convert up to half of its assistance to the poorest countries into grants. He made the proposal on the eve of his trip to Genoa, Italy, where the heads of state of the seven largest imperialist powers plus Russia--the Group of Eight--planned a meeting on international trade and other political issues.

John Taylor, U.S. undersecretary for international affairs, said the shift to grants would be linked to funding specific projects and allowing greater foreign scrutiny over how the funds are spent.

The World Bank was founded in 1944 and has a staff of some 10,600 people. It provided more than $15 billion in loans last year to countries in Africa, Asia, Latin America, and Eastern Europe. Like its counterpart the International Monetary Fund (IMF), founded in 1946, the World Bank plays an important role in advancing imperialist policy, particularly that of Washington, in the Third World.

Through the bank's International Development Association, it provides loans at discounted rates. Currently Washington, which calls the shots for the imperialist financial institution, contributes about $800 million annually to the World Bank.

Bush's call for the policy change "has alarmed several European countries that are shareholders of the Washington-based institution," London's Financial Times reported. "Coming soon after the abrupt US decision to abandon the Kyoto protocol on global warming, it has renewed fears about US unilateralism in policymaking." Objections to replacing loans with grants have come from governments in the United Kingdom, Denmark, the Netherlands, Norway, and Sweden.

The previous month, U.S. treasury secretary Paul O'Neill also called for an overhaul of the World Bank. O'Neill echoed his predecessor, Lawrence Summers, who recommended drastic changes for the IMF. Summers proposed that the IMF eliminate funding programs to promote development in poor countries and lend funds only to countries that face short-term currency crises, phasing out long-term loans.

Liana Cisneros, an official of Jubilee Plus, the successor to Jubilee 2000 that supported debt relief, jumped to support Bush's proposal and to attack the European powers. "European leaders... are simply defending corporate interests in their own countries" by opposing the proposal she said. "World Bank loans effectively provide subsidies to big companies wanting to do business in developing countries."

A more sober assessment was made in a July 20 report on the Ascribe Newswire: "While the heads of the world's eight leading industrialized nations meet this week to discuss the faltering world economy, African leaders speaking out at recent United Nations meetings in New York and Geneva have put forward proposals for deeper and broader debt cancellation.... Sub-Saharan Africa continues to pay $14.2 billion US dollars each year in debt service for loans which have, by some accounts, already been repaid many times over."  
 
 
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