Online Reporter
The Herald, 25 September 1986
HIGHLIGHTS from the World Bank’s annual report released this week as finance ministers gather in Washington for the World Bank and International Monetary Fund annual meetings.
On general developments over the last report rather arguably calls the last pivotal one in which rhetoric was transformed into action on a number of critical issues. To be sure, divisive issues remain unresolved. For others, only the outlines of possible solutions are discernible.
Yet the convergence on opinions among industrial and developing countries on the nature of current economic problems and on the paths that might be taken to ameliorate them, or even reverse their chronic, adverse trends, is what distinguishes the year from these that preceded it.
Two key issues, in particular, stand out upon which vital convergence took place: the stimulate economic in growth in those heavily indebted countries that have been undertaking at some social pain, far-reaching programme of economic adjustment and the need for concerted action, by all parties concerned, to reverse the decades of economic decline in the nations of sub-Saharan Africa.”
There had also been growing consensus that the World Bank had a major role to play in stimulating growth in the heavily indebted countries in helping reverse economic decline in Africa and in promoting and co-ordinating capital flows to the world’s developing countries.
It believed that progress had been made in translating words into action in that the indebted countries had continued to implement adjustment programmes, there had been enhanced co-ordination of economic policies by the Group of Five major industrialised countries and the World Bank had expanded its lending in support of adjustment efforts.
Lessons for today:
- For Africa and the developing world today. Economic Recovery Requires Action, Not Just Promises. The report noted that progress occurred when “rhetoric was transformed into action.” Countries moved beyond discussions and began implementing reforms and adjustment programmes.
- Economic problems are often interconnected. International cooperation among governments, financial institutions, investors, and development partners is crucial for sustainable growth.
- Debt Remains a Major Development Challenge. A key concern in 1986 was helping heavily indebted countries stimulate growth while managing debt burdens. Countries must borrow responsibly and ensure that loans are used for productive investments that generate economic growth and jobs.
- Development challenges cannot be solved overnight. Consistent investment in education, health, infrastructure, agriculture, and industry is needed over many years. The World Bank was seen as a key institution in supporting growth, coordinating capital flows, and assisting countries undergoing economic reforms.
