WB to sharply cut funds for Asia
WB to sharply cut funds for Asia
SINGAPORE (AP): The World Bank plans to drastically cut loans
to Asian countries this year, now that the region is recovering
from its economic crisis, the bank's former top official in Asia
said Thursday.
Over the past two years, the World Bank has lent roughly $20
billion to countries in the Asia-Pacific region, said Jean-Michel
Severino, the bank's former vice president for East Asia and the
Pacific.
Severino said the level of lending for this fiscal year, which
begins in July, would be around $4 billion.
"Whether it will be a little more, or a little less, it's a
bit too early to say," he told a news conference. He said this
amount is approximately what the World Bank was lending to the
region before the crisis.
"The very high level of lending is a big burden for (the World
Bank's) own capital structure," Severino said.
He said the main cuts will be in the area of structural
adjustments, which include budget support financing and balance
of payment-related loans.
The main reason for the cuts is that many of the countries
that suffered from the economic crisis in Asia are healthier
economically and will not be asking for structural adjustment
funds this year, he said.
South Korea will not need funds, and Malaysia will "definitely
not" seek loans. Thailand is unlikely to request loans, and if
the Philippines does, it will be "very little," he said.
Now that the region is stronger economically, the World Bank
also plans to shift toward projects that were lower in its list
of priorities, in areas such as the environment and
infrastructure, Severino said.
But efforts must continue in the areas of financial
restructuring and corporate governance, where reforms have not
been completed yet, and to fight poverty, particularly in
Indonesia, he said.
Severino completed his last day at the World Bank Tuesday
after serving three and a half years as its top official in Asia.
He will return to the French finance ministry, where he formerly
held a post as financial auditor.