US rejects UK plan to boost aid

[shamrock_uk]

http://news.bbc.co.uk/1/hi/business/4236809.stm

US rejects UK plan to boost aid The US remains opposed to a UK proposal to boost aid for the world's poorest countries, saying it is unnecessary. Chancellor Gordon Brown used the London G7 meeting of finance ministers and central bankers to call for the $100bn International Financing Facility (IFF). Before the meeting, US Treasury Under-Secretary John Taylor dismissed the plan outright, saying the US wanted to switch money from loans to grants. The UK, which has support from other G7 countries, is trying to get US support. The G7 ministers will discuss the proposals at the two-day meeting, due to conclude on Saturday. In his opening speech, Mr Brown also called on the world's seven richest nations to remove barriers to global trade, and to promote global stability and growth. Ahead of the G7 meeting in London, which kicks off the UK's one-year presidency of the G7 club, he called on them to "rise to the global challenge".*snip*

Mumblegrumble

[John D Harris]

Looks like the disagreement is not over the amount of money, but rather in what form the money given should take, loans or grants. It looks like the disput is about weither the G7, 7 richest countries in the world are going to give the money to the poor, or loan the money to the poor. If it is given without expectation of repayment would that have a more benifitual(sp?) result on the poor country's economies, or would loaning them the money where they have pay the money back? I don't believe it is wise to loan money to people who are already under a high debt, and expect them to be able to repay. Giving them the money, may not be wise either. Atleast the giver is not expecting any money back and won't have their own economies hurt when the money isn't paid back.

[shamrock_uk]

The chancellor's whole scheme is quite interesting actually - the idea of a much closer mentoring scheme where aid is carefully supervised and targeted and much closer links are forged between the two countries. The only snag is I can imagine some of the African leaders rejecting initiatives like this as being too reminiscent of colonialism.

Re. the loans, my understanding was that this wasn't about giving loans as such but the IFF would function much like the IMF and act as a source of finance and advice if the worst came to the worst, like a safety net.

[Dace De'Briago]

I'm sure if the IMF agreed to give the money to American contractors to go in and solve the problems that any US opposition to the proposed increase in subsidy would vanish

[John D Harris]

Originally posted by Dace De'Briago: I'm sure if the IMF agreed to give the money to American contractors to go in and solve the problems that any US opposition to the proposed increase in subsidy would vanish

There is NO, as in ZERO amount, of opposition to any increase. The opposition is to weither the money given, is given as grants or or given as loans.