World Bank chief urges better balance between rich, poor nations
By Dirk Beveridge
DUBAI, United Arab Emirates -- The World Bank opened its annual meeting today with a blistering attack on rich countries for spending hundreds of billions more on their militaries and their farmers than they do on helping the poor.
"Our planet is not balanced," World Bank President James Wolfensohn told delegates from 184 countries. "Too few control too much, and too many have too little to hope for. Too much turmoil, too many wars. Too much suffering."
The failure of global trade talks this month in the Mexican resort of Cancun highlights the deep divide that must be overcome to create a stable future, Wolfensohn said in an opening address to the joint meeting of his bank and the International Monetary Fund.
He criticized rich countries for providing just $56 billion a year in development assistance to poor countries, compared with more than $300 billion they spend on agricultural subsidies and $600 billion spent on defense. Nations have committed an additional $16 billion in aid by 2006, but Wolfensohn said poor nations could easily use twice as much.
Rich nations balked at greater cuts in farm subsidies in the Cancun meeting, and poor nations, who say their farmers suffer as a result, refused to proceed.
U.S. Treasury Secretary John Snow and other top finance leaders have been lobbying for a quick resumption of the World Trade Organization negotiations, arguing breaking down barriers to global commerce would benefit all.
But Wolfensohn said wealthy nations need to do what they say.
"It is inconsistent to preach the benefits of free trade and then maintain the highest subsidies and barriers for precisely those goods in which poor countries have a comparative advantage," he said.
Finance leaders are worried about the massive American budget deficit, approaching a record $500 billion, but Snow called the spending understandable and pledged that Washington will bring it down through a combination of economic growth and responsible spending.
"It came about because of a recession and efforts to deal with a recession" Snow told delegates. Snow called it "Economics 101" that countries run a deficit to tackle a recession but said the United States plans to slash its red ink in half in the next five years, bringing it below 2 percent of GDP.