20 July 2001

White House Fact Sheet on World Bank Grants Proposal

Following is the White House fact sheet on the U.S. proposal to increase World Bank grants to the poorest countries:

The White House
Office of the Press Secretary
(Genoa, Italy)
July 20, 2001
Fact Sheet
U.S. Proposal To Increase World Bank Grants To The Poorest Countries

"Today, I call on all multilateral banks to increase the share of their funding devoted to education, and to tie support more directly to clear and measurable results...I also propose the World Bank and other development banks dramatically increase the share of their funding provided as grants, rather than loans, to the poorest countries... My proposal today doesn't merely 'drop the debt -- it helps stop the debt.'"
President George W. Bush
July 17, 2001

The World Bank and other regional development banks have an important role in promoting economic growth and poverty alleviation in the poorest countries. The United States has called on these institutions to refocus their mission on raising living standards in developing nations by increasing productivity growth.

More Resources for Education: Education is a critical driver of productivity growth. However, too many children in too many poor countries are not being educated.

• In sub-Saharan Africa, more than 40 percent of primary school age students do not even go to school.

• Many of the children who go to school are not getting basic verbal and quantitative skills.

• Only about 7 percent of the World Bank's resources are devoted to education.

The President proposed today a substantial increase in World Bank resources for education -- tied to clear, measurable results.

Increasing Grants to Stop the Debt: In order to stop increasing the debt of the poorest and least creditworthy countries, the President has proposed that the World Bank provide up to 50 percent of its assistance to the poorest countries in the form of grants, rather than loans.

• Dramatically increasing grants to the poorest countries, especially for such urgent priorities as education, health care and clean water, makes more financial sense than burdening these countries with loans that cannot be repaid.

• Last year, the World Bank lent about $4 billion [$4,000 million] a year to the poorest countries, of which $700 million was dedicated to social sector projects. The President's proposal would increase that amount significantly.

Today's Financial Times reports that "Jubilee Plus," a successor organization to the debt relief campaign Jubilee 2000 is "backing the Bush project in its entirety."