Broadcast 26th February 2001

	Listen to Alex Ritson's interview with James Wolfensohn, President of the World Bank

The 'listening tour' of Africa by the heads of the International Monetary Fund and World Bank has ended with some controversy.

IMF Director Horst Kohler and World Bank President James Wolfensohn have been touring some of the continent's poorest countries.

Issues under discussion included the problems of AIDS and corruption.

But it was the insistence that total debt cancellation could never be a viable option which raised most eyebrows.



President of the World Bank, James Wolfensohn, told our reporter Alex Ritson that he had never said that it had been a viable option.

He explained that he was one of the people who invented the term Hipic (Highly indebted poor countries), and the world organisations had managed to reduce the debt in 22 countries by two-thirds.

They were hoping to do the same in a further 18 nations, he added.

In terms of debt-forgiveness, development and poverty is not a one-subject issue. James Wolfensohn

"People seem to think that debt-forgiveness will solve everything. What we have been talking to African leadership about, is the importance of governance, of health and education programmes," Mr Wolfensohn said.

Some of the debts are huge. Zambia for example, is more than $5 billion in debt and if that debt was cancelled it would make a huge difference to infrastructure or education.

Mr Wolfensohn agreed, but was doubtful whether the money would be put to such use.

"What people forget," he said, "is that we have already arranged within the space of four years, to forgive 65 per cent of their debt."

Until four years ago there was no debt-forgiveness.

The World Bank now has to determine how much more forgiveness there can be - remembering that most of the relief comes from bilateral countries and not just the international institutions.

There is a fear that if debt was completely wiped out, then it would damage a country’s credit rating in the future.

If an individual does not pay their debts, the chances of getting more credit are remote - the same applies to countries. James Wolfensohn

Mr Wolfensohn believes that the issue of continuing credit is extremely important.

The Hipic scheme is designed to get things back into balance. There is a certain amount of debt which a country can live with comfortably.

Regarding HIV, considered by many to be one of the major threats to Africa, Mr Wolfensohn said the subject was ‘front and centre’ in the World Bank’s agenda.

"I announced a billion dollar programme less than six months ago", he said. "No AIDS programme in Africa will go un-funded - whether or not I can fund it, or whether I have to go elsewhere."

There are 23 million cases of AIDS in Africa - with 10 million orphans now and, in 15 years time, that figure will rise to 40 million.

"If this is not dealt with, then any sort of development, with or without debt-forgiveness, becomes impossible," Mr Wolfensohn said.

AIDS and wars in Africa are at the front and centre of the World Bank’s agenda. James Wolfensohn

Corruption is also a big issue in Africa - for many reasons.

One of the reasons is that countries outside the continent still allow corrupt payments to be tax deductable.

The World Bank has been very active in opening up the subject of corruption for discussion.

With institutions like Transparency International the subject has been brought to the forefront and citizens in the countries are now feeling able to press their leaders on this issue through the media.

AIDS and wars in Africa are at the front and centre of the World Bank’s agenda. James Wolfensohn