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
ebooks
ebooksA special investigation by Andy McSmith
Life and Style
Powdered colors are displayed for sale at a market ahead of the Holi festival in Bhopal, India
techHere's what you need to know about the riotous occasion
Arts and Entertainment
Larry David and Rosie Perez in ‘Fish in the Dark’
theatreReview: Had Fish in the Dark been penned by a civilian it would have barely got a reading, let alone £10m advance sales
News
Details of the self-cleaning coating were published last night in the journal Science
science
News
Approved Food sell products past their sell-by dates at discounted prices
i100
News
Life-changing: Simone de Beauvoir in 1947, two years before she wrote 'The Second Sex', credited as the starting point of second wave feminism
peopleHer seminal feminist polemic, The Second Sex, has been published in short-form to mark International Women's Day
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Evening Administrator

£8 per hour: Recruitment Genius: This Pension Specialist was established early...

Guru Careers: Executive Assistant / PA

£30 - 35k + Bonus & Benefits: Guru Careers: We are seeking an Executive Assist...

Ashdown Group: Graduate Application Support Analyst

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Reach Volunteering: External Finance Trustee Needed!

Voluntary post, reasonable expenses reimbursed: Reach Volunteering: Would you ...

Day In a Page

Homeless Veterans campaign: Donations hit record-breaking £1m target after £300,000 gift from Lloyds Bank

Homeless Veterans campaign

Donations hit record-breaking £1m target after huge gift from Lloyds Bank
Flight MH370 a year on: Lost without a trace – but the search goes on

Lost without a trace

But, a year on, the search continues for Flight MH370
Germany's spymasters left red-faced after thieves break into brand new secret service HQ and steal taps

Germany's spy HQ springs a leak

Thieves break into new €1.5bn complex... to steal taps
International Women's Day 2015: Celebrating the whirlwind wit of Simone de Beauvoir

Whirlwind wit of Simone de Beauvoir

Simone de Beauvoir's seminal feminist polemic, 'The Second Sex', has been published in short-form for International Women's Day
Mark Zuckerberg’s hiring policy might suit him – but it wouldn’t work for me

Mark Zuckerberg’s hiring policy might suit him – but it wouldn’t work for me

Why would I want to employ someone I’d be happy to have as my boss, asks Simon Kelner
Confessions of a planespotter: With three Britons under arrest in the UAE, the perils have never been more apparent

Confessions of a planespotter

With three Britons under arrest in the UAE, the perils have never been more apparent. Sam Masters explains the appeal
Russia's gulag museum 'makes no mention' of Stalin's atrocities

Russia's gulag museum

Ministry of Culture-run site 'makes no mention' of Stalin's atrocities
The big fresh food con: Alarming truth behind the chocolate muffin that won't decay

The big fresh food con

Joanna Blythman reveals the alarming truth behind the chocolate muffin that won't decay
Virginia Ironside was my landlady: What is it like to live with an agony aunt on call 24/7?

Virginia Ironside was my landlady

Tim Willis reveals what it's like to live with an agony aunt on call 24/7
Paris Fashion Week 2015: The wit and wisdom of Manish Arora's exercise in high camp

Paris Fashion Week 2015

The wit and wisdom of Manish Arora's exercise in high camp
8 best workout DVDs

8 best workout DVDs

If your 'New Year new you' regime hasn’t lasted beyond February, why not try working out from home?
Paul Scholes column: I don't believe Jonny Evans was spitting at Papiss Cissé. It was a reflex. But what the Newcastle striker did next was horrible

Paul Scholes column

I don't believe Evans was spitting at Cissé. It was a reflex. But what the Newcastle striker did next was horrible
Miguel Layun interview: From the Azteca to Vicarage Road with a million followers

From the Azteca to Vicarage Road with a million followers

Miguel Layun is a star in Mexico where he was criticised for leaving to join Watford. But he says he sees the bigger picture
Frank Warren column: Amir Khan ready to meet winner of Floyd Mayweather v Manny Pacquiao

Khan ready to meet winner of Mayweather v Pacquiao

The Bolton fighter is unlikely to take on Kell Brook with two superstar opponents on the horizon, says Frank Warren
War with Isis: Iraq's government fights to win back Tikrit from militants - but then what?

Baghdad fights to win back Tikrit from Isis – but then what?

Patrick Cockburn reports from Kirkuk on a conflict which sectarianism has made intractable