WB seeks private sector aid for poor countries

The new president of the World Bank, Robert Zoellick, wants to allow private-sector companies to help finance aid to the poorest countries, an innovation already stirring controversy.
The unprecedented outreach already has met with a positive response, Zoellick said here Thursday at a news conference, without naming the companies.
"This is at an early stage," Zoellick said in response to a question about a Financial Times interview published Thursday in which he revealed the World Bank's new strategy.
Zoellick said the Bank has had "some discussions" with companies "but we also have to work this through our board processes."
"It also could help us broaden the base of support for the funding of the poorest, the 81 poorest countries in the world," Zoellick, a former US trade chief and Goldman Sachs executive, said ahead of the World Bank's annual meeting this weekend.
Zoellick, who took the helm of the Bank in July after a favoritism scandal forced his predecessor, Paul Wolfowitz, to resign, underscored his strategy to integrate the Bank's activities into a global network.
He said he had "received a lot of emails from people I know in the private sector saying this could be a great thing."
He added, "If we are able to move it forward this could offer us an opportunity to serve another one of the strategic directions I would like to encourage which is how to make sure we draw the private sector in."
Zoellick was questioned about the World Bank's 15th fund-raising campaign to rebuild the coffers of the International Development Association (IDA).
The IDA is the Bank's main lender to countries whose populations live on less that two dollars per day. Most of the borrowers are in sub-Saharan Africa.
Zoellick said he saw no real challenge in getting board approval for the private-sector strategy.
"I don't see any particular problem, but until we get through that we cannot really take the steps with the companies," he said, without providing further details.
The 185-nation World Bank and its sister institution, the International Monetary Fund, open three-day annual meetings in Washington Saturday.
"By the end of the year I hope that we will have our IDA contributions," Zoellick said.
The next IDA meeting will be held Tuesday in the US capital, with a subsequent meeting scheduled on November 12-13 in Dublin, Ireland.
"I believe we are on track to do better than IDA 14," he said Tuesday in a press briefing, referring to the 14th fund-raising campaign which raised 33 billion dollars.
The World Bank recently announced it would double its IDA contribution to 3.5 billion dollars.
But Zoellick's innovation, which he said could be extended to private foundations, such as that of US billionaires Bill and Melinda Gates, drew immediate fire.
"The private sector getting involved in the replenishment of IDA raises serious questions," said Sebastien Fourmy, a spokesman of Oxfam International, a nongovernmental organization.
The World Bank is "a public institution accountable to citizens," not to shareholders, said Fourmy.
"It sounds terrible," said Mark Weisbrot, economist and co-director of the Center for Economic and Policy Research.
"There is all kinds of room for corruption," he added.
IDA loans and aid help finance infrastructure projects, such as roads and bridges, that could involve multinational companies.
Weisbrot said the new World Bank initiative is symptomatic of the relevancy crisis that affects the six-decade-old institution today.
"They are going for private money because there are now other alternatives for public money," Weisbrot said, citing foundations and targeted aid funds, which often prove more effective than Bank aid.