IMF, World Bank Say Suspension Of Loans Not Related

IMF, World Bank Say Suspension Of Loans Not Related

To Conflict

The Reporter (Addis Ababa), March 15, 2000- By A Staff Reporter


Addis Ababa - The World Bank and the International Monetary Fund (IMF) last week denied reports that they suspended loans to Ethiopia because of the country's conflict with Eritrea.


Speaking to journalists following a two-day workshop for Senior Policy- makers on Poverty Reduction Strategies in Africa, Mr. Ali Abdi, the IMF's Representative to Ethiopia, said the impression that IMF suspended loans due to the conflict was unfounded.


"Unlike the OAU or the UN, the IMF has no mandate to make moral judgments on what a country should do in a conflict situation," he stated.


He added that "issues of security, and sometimes resolving issues of security, are essential for development. During war, the farmer cannot go to the fields, the buses cannot take the products to the market..."


To prove his point that the IMF did not suspend loans due to security matters, he mentioned the example of Uganda. "We are working with Uganda because we think that their poverty reduction policies are worth our support, and not because they are in conflict or It was not that the "IMF is gagging on Ethiopia because of the conflict. That is not the reason behind our decision," Abdi reiterated.


Nigel Roberts, the World Bank's Representative to Ethiopia, on his part confirmed reports that the Bank had, for some months, suspended "new lending" to Ethiopia, but said that since February 2000, the senior management of the Bank's board had decided to resume selective lending for high priority projects in Ethiopia.


"The projects have humanitarian and systematically long-term results that should not be affected by short-term problems [the Ethiopia-Eritrea conflict]," he said. Accordingly, providing assistance to national reduction of the HIV/AIDS epidemic and empowering women at grass-roots level initiatives, have been resumed, the representative said.


He also noted that the bank viewed civil conflict as a "major setback" to multilateral assistance. "It was a regression as the new preoccupation of the administration would be mitigating the ravages of war instead of concentrating on the participatory approach and involving the civil societies in development efforts," Roberts said.