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World Bank to link future loans to military spending
WASHINGTON. May 10: The World Bank said Sunday It would assess military spending by 85 Third World countries when deciding how much to land them In their battle against poverty, reports AP.
The nations "non-productive" spending "such as mill tary expenditures* will help determine the bank's level of support, said a 16-page "Operational Directive" re-leaaed by the bank.
Poverty reduction is the institution s overarching ob-
jective, bank President Lewis T Preston — formerly ol the J P Morgan and Company bank— wrote In an Introduction.
The bank made clear that the amount of loans a country can expect Is linked to the strength of Its own effort to reduce poverty greater commitment will get greater support. weaker commitment will get less support
Japan and Germany have al ready made It clear that they will look into military spend Ing when they make up their
own aid programme.
US Congressman Henry J Gonzalez of Texas, chairman of the House Banking Committee, has said he will push to take the United States out of international organizations if they keep on lending money that makes it easier for the borrowers to spend other money on arms.
The World Bank Is the biggest of intergovernmental lending agencies, approving loans worth about dlrs 24 billion a year Its original pur
pose was to help poor countries out of poverty. The United States owns the biggest block of shares among the 159 member countries.
Russia and other republics of the former Soviet Union are now becoming members of the bunk and eligible for Its loans.
The World Bank must determine which of the republics are poor enough to warrant a poverty programme. If any qualify, they would have to go through a lengthy process that
would determine the need of each. While Russia itself might be considered too well devel oped to warrant an anti-poverty programme, some central Asian republics might qualify and welcome It.
In the past, the bank was occasionally criticized for forgetting its original antipoverty goal. But Sven Sandstrom, one of the bank * three managing directors, said World Bank projects of the 1970s were over ambitious and there were some failure*
"In the 1980s.. we focused heavily on macro-economic policies and other economic reforms to try to help coun tries make their economies more efficient and restore economic growth
'In the 199Os, we see poverty reduction as the preeminent focus of our work "
John Mitchell, a bank spokesman, said that by 1994 the bank staff experts to complete the 86 country reviews now planned.