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US Loses Status as Top World Bank Donor to Britain

Lain Rogers

BERLIN - The United States lost its status as the largest donor to the World Bank, the lender said on Friday, as Britain pledged more in the latest funding round which secured a record amount for around 80 poor countries.1214 03

Losing its position as the top donor could weaken Washington's influence over the bank, which is the world's largest provider of development assistance to poor countries, and over the policies that decide how its cash is spent.

"The U.S. pledged a very substantial contribution but is now down to second place after Britain," World Bank Vice President Philippe Le Houerou told a news conference after two days of talks among donor countries in Berlin.

The Washington-based lender conducts a fund-raising campaign among its richer members every three years to determine funding for the International Development Association (IDA), the bank's lending arm.

Forty-five donor countries promised a record total of $25.1 billion at the Berlin talks, with a further $16.5 billion coming from within the bank and previous donor pledges for financing debt forgiveness, officials told the news conference.

The total of $41.6 billion, also a record, will help the poor countries with grants and loans from next summer until June, 2011 and represents an increase of $9.5 billion over the previous funding period.

In a coup for World Bank President Robert Zoellick, who was in Beijing this week, China was one of six nations joining the list of donors for the first time, along with Cyprus, Egypt, and the three Baltic states.

"This is the largest expansion in donor funding in IDA's history," Zoellick said in a statement. "The donor community has demonstrated its full commitment to helping countries overcome poverty and achieve sustainable growth, especially in Africa."


The latest talks were complicated by slowing economic growth in rich nations and the weakening dollar. At the same time, the bank's mission is widening, with governments demanding more help in developing sophisticated economies and markets.

The United States, whose economy is almost six times as big as Britain's, has been keen to hold on to its No. 1 spot as the bank's largest donor but is also struggling with a budget stretched by the wars in Iraq and Afghanistan.

The U.S. share of contributions has slowly declined from 22 percent in 1960, the year of the fund's inception. After the last round of IDA negotiations in 2005, the U.S. share stood at 13.8 percent and Britain's at 13.2 percent.

Officials were reluctant to give any details on how much each country had pledged this time, saying only that Britain was the biggest donor ahead of the United States, with Germany in fourth place. Japan was third last time.

Zoellick said the money would go towards helping 2.5 billion people in poor nations across five continents.

IDA-financed projects support education, basic health services, clean water and sanitation, as well as environmental safeguards, infrastructure and policy and institutional reform.

(Reporting by Iain Rogers; editing by David Stamp)

© 2007 Reuters

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