IMF urges countries to contribute AIDS fund
Tuesday, May 1st 2001, 12:00 am
By: News On 6
WASHINGTON (AP) _ A plan to establish a huge global fund to combat AIDS and other infectious diseases in developing countries gained momentum as world finance leaders ended the spring meetings of the International Monetary Fund and World Bank.
The finance ministers and central bank governors also expressed confidence the global economic slowdown, led by a stalling U.S. economy, would be short-lived.
They said economic fundamentals were sound even though Japan is slipping into recession and growth in much of Asia and Latin America is slowing. By contrast, prospects for Europe are favorable, they said.
``While we are vigilant and are aware of the risks, we are cautiously optimistic,'' British Chancellor of the Exchequer Gordon Brown said. Treasury Secretary Paul O'Neill said he picked up this sense of optimism from Brown and other colleagues from Europe, Canada and Japan.
The ministers pledged there would be a substantial increase in funds to fight AIDS and other infectious diseases in poor countries. U.N. Secretary-General Kofi Annan said at a conference in Philadelphia Monday that an effective campaign to combat AIDS would cost $7 billion to $10 billion.
While the immediate economic outlook was uncertain, the finance ministers did not have to contend with the thousands of protesters who marched through the streets at last spring's meeting, resulting in more than 1,200 arrests.
By late Monday, chain-link barricades around the headquarters of the two lending institutions three blocks from the White House had been removed and the ministers' black limousines moved without police escort.
Anti-globalization groups, who contend the IMF and World Bank are not doing enough to help the poor, mounted one protest rally on Sunday afternoon attended by about 250 people. They have said they will be back by the thousands for the fall meetings of the IMF and World Bank, also scheduled for Washington.
In their communique, the finance leaders said there was a need for a ``substantial increase in global resources'' for the fight against AIDS and other infectious diseases in poor nations.
The finance leaders did not specify how much money would be included for the effort to fight infectious diseases but called on wealthy countries to come forward with pledges of support in time for a United Nations special AIDS meeting in June.
The issue is also expected to be a main agenda item at the annual economic summit of the world's seven richest industrial countries in Genoa, Italy, in July.
World Bank President James Wolfensohn told a concluding news conference that the bank will likely administer the new health fund.
Chris Lovelace, director of the bank's unit for health, population and nutrition, said the figure Annan suggested for the AIDS fund was a good starting point. Lovelace said when other diseases such as malaria, tuberculosis and measles were added Annan's figure could be doubled to $20 billion.
But Lovelace said it would take time for governments to agree on how much they would provide and international organizations would have to develop programs to use the money effectively in the poor countries.
``What's clear now is that the commitment is growing by leaps and bounds,'' Lovelace said, ``particularly among finance ministers in the industrial countries as we saw this weekend.''
The IMF also agreed on most of the details of a $10 billion rescue package for Turkey and said it was prepared to resume loans to Argentina if the government approves a package of budget cuts and taxes. Crisis in both countries threatened to unsettle global financial markets.
Turkish officials and IMF staff have been negotiating on what is known as a ``letter of intent,'' which outlines the steps the Turkish government will take to overhaul its economy. Such an agreement is needed before the IMF can commit new loans.
Kemal Dervis, Turkey's economy minister, said that the IMF's executive board would likely act on the program before May 15 and he predicted that the first new loan money, probably about $5.5 billion, would be released at the end of June.