IMF sells gold to hep debt of poorest nations

THERE HAS been a major breakthrough in plans for the IMF to finance a substantially more generous programme of debt relief for the world's poorest countries by selling a part of its gold reserves, Gordon Brown announced yesterday.

The decision, reflecting a change of heart by Japan and Italy, will mean almost all the heavily indebted poor countries should start to see progress in reducing their repayments on old debts to the rich ones by the millennium. The Chancellor, who has been at the forefront of the recent drive to get the agreement, said: "There has been a breakthrough in attitudes."

An improved deal for the very poorest nations had seemed likely since the German government of Gerhard Schroder reversed his predecessor's opposition to the sale of IMF gold. But the decision in principle to sell up to $3bn-worth of the fund's gold has come earlier than expected, to the delight of campaign groups.

By the end of 2000 the debt relief programme will amount to around $50bn and cover up to 41 countries. This compares with an estimated reduction of $7bn in repayments under the earliest version of the programme.

The earlier refusal of some of its biggest shareholders to agree to sales of IMF gold had been the biggest obstacle to introducing a more generous plan. The proceeds of the gold sale will be invested, and the earnings used to finance the debt relief initiative.

The IMF also started its discussions of how to reconstruct the shattered Balkan economies after the war. Early estimates of the cost range from $10bn to as much as $100bn.

James Wolfensohn, president of the World Bank, said the bank was providing $70m in assistance to Macedonia and Albania. But Bulgaria and Romania would also need help recovering from economic damage, he said.

Behind the scenes, fresh pressure for internal reform of the IMF has built up at this week's meetings of the fund and World Bank in Washington. The spring cleaning could result in the departure of Michel Camdessus as managing director of the IMF before its annual meetings in September.

The meeting of the fund's Interim Committee - in effect its supervisory board - also expressed concern about the state of the world economy. Robert Rubin, US Treasury Secretary, said: "Serious challenges remain and I believe the balance of risks for the global economy remain on the downside." Mr Brown said that although some worries had not materialised, there was a "workmanlike" approach to the challenges.

The Interim Committee discussed proposals for its own restructuring yesterday. Although there is no consensus about specific measures yet, the reforms will make the IMF more accountable to a broader range of member countries, especially the developing countries. It has already been agreed that in future the president of the World Bank will attend IMF Interim Committee meetings. Other measures that will give the committee greater influence over fund decisions are likely.

Start your day with The Independent, sign up for daily news emails
Barn owls are among species that could be affected
charity appeal
Sarah Silverman (middle) with sister Reform Rabbi Susan Silverman (right) and sister actress Laura Silverman (left) at Jerusalem's Western Wall for feminist Hanuka candle-lighting ceremony
peopleControversial comedian stages pro-equality Hanukkah lighting during a protest at Jerusalem's Wailing Wall
Arts and Entertainment
The Bach Choir has been crowned the inaugural winner of Sky Arts’ show The Great Culture Quiz
arts + ents140-year-old choir declared winner of Sky Arts' 'The Great Culture Quiz'
After another poor series in Sri Lanka, Alastair Cook claimed all players go through a lean period
cricketEoin Morgan reportedly to take over ODI captaincy
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Life and Style
news... you won't believe how bad their skills were

Arts and Entertainment
Mark Wright and Mark Wright
tvStrictly goes head-to-head with Apprentice
footballPremier League preview: All the talking points ahead of this weekend's clashes
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Carlton Senior Appointments: Private Banking Manager - Intl Bank - Los Angeles

$200 - $350 per annum: Carlton Senior Appointments: Managing Producer – Office...

Carlton Senior Appointments: San Fran - Investment Advisor – Ind Advisory Firm

$125 - $225 per annum: Carlton Senior Appointments: San Fran - Investment Advi...

Sheridan Maine: Commercial Finance Manager

Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

Sheridan Maine: Regulatory Reporting Accountant

Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

Day In a Page

Homeless Veterans appeal: 'You look for someone who's an inspiration and try to be like them'

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Could cannabis oil reverse the effects of cancer?

Could cannabis oil reverse effects of cancer?

As a film following six patients receiving the controversial treatment is released, Kate Hilpern uncovers a very slippery issue
The Interview movie review: You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here

The Interview movie review

You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here
Serial mania has propelled podcasts into the cultural mainstream

How podcasts became mainstream

People have consumed gripping armchair investigation Serial with a relish typically reserved for box-set binges
Jesus Christ has become an unlikely pin-up for hipster marketing companies

Jesus Christ has become an unlikely pin-up

Kevin Lee Light, aka "Jesus", is the newest client of creative agency Mother while rival agency Anomaly has launched Sexy Jesus, depicting the Messiah in a series of Athena-style poses
Rosetta space mission voted most important scientific breakthrough of 2014

A memorable year for science – if not for mice

The most important scientific breakthroughs of 2014
Christmas cocktails to make you merry: From eggnog to Brown Betty and Rum Bumpo

Christmas cocktails to make you merry

Mulled wine is an essential seasonal treat. But now drinkers are rediscovering other traditional festive tipples. Angela Clutton raises a glass to Christmas cocktails
5 best activity trackers

Fitness technology: 5 best activity trackers

Up the ante in your regimen and change the habits of a lifetime with this wearable tech
Paul Scholes column: It's a little-known fact, but I have played one of the seven dwarves

Paul Scholes column

It's a little-known fact, but I have played one of the seven dwarves
Fifa's travelling circus once again steals limelight from real stars

Fifa's travelling circus once again steals limelight from real stars

Club World Cup kicked into the long grass by the continued farce surrounding Blatter, Garcia, Russia and Qatar
Frank Warren column: 2014 – boxing is back and winning new fans

Frank Warren: Boxing is back and winning new fans

2014 proves it's now one of sport's biggest hitters again
Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

Jeb Bush vs Hillary Clinton

Karen Tumulty explores the power dynamics of the two first families
Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

Stockholm is rivalling Silicon Valley

The Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
Did Japanese workers really get their symbols mixed up and display Santa on a crucifix?

Crucified Santa: Urban myth refuses to die

The story goes that Japanese store workers created a life-size effigy of a smiling "Father Kurisumasu" attached to a facsimile of Our Lord's final instrument of torture
Jennifer Saunders and Kate Moss join David Walliams on set for TV adaptation of The Boy in the Dress

The Boy in the Dress: On set with the stars

Walliams' story about a boy who goes to school in a dress will be shown this Christmas