The World Bank is working to promote
Africa's business community and public works projects that encourage
to Shanta Devarajan, the chief economist of the Africa region at the Bank, "we
gave [an emergency credit of] 100 million dollars to the Democratic Republic of
the Congo, which will be used to finance two things: the maintenance of
infrastructure and paying teachers' salaries.
other thing that can bring a stimulus to affect the poor," he continued, "is to
provide financing to small and medium enterprises. About 80 percent of the
labor force in Africa is in the informal sector -- many of them are small and
"The participants increase as jobs in the formal sector like
mines decline, so you need to maintain earnings in the informal sector in small
and medium enterprise sector."
Roads and Rails
says the institution will increase infrastructure investments to the developing
world to over 45 billion over the next three years, part of that going to Africa.
example of a large-scale infrastructure project is the North-South Corridor
running from southern to eastern Africa. He says the effort is expected to
bring employment and open new domestic markets, especially for landlocked countries.
It will also boost Africa's exports once the global economy improves.
"One of the attractions of the North-South
Corridor is there are different projects people had not been working on before
but that might attract fresh new money to Africa. We need additional resources.
We have aid resources, but for a fiscal stimulus we need more. The North-South
Corridor might be one vehicle to finance it."
programs are another way the World Bank hopes stimulate employment and demand.
"In Ethiopia," Devarajan says, "We
have a program that pays poor people in rural areas to work on building
infrastructure that covers two million people and has been assessed to be quite
efficient. They scaled it up first when the food crisis hit a year ago, and
we've added to the wage. It's an exciting program."
Aid groups are asking that any support
to the developing world by the World Bank and IMF be issued as grants, rather
than loans. In recent years, debt relief from the international community has abolished
the loan payments for many countries. Activists fear by accepting loans,
developing countries will suffer another debt crisis.
Activists also ask that support not
come with "conditionalities" like those used encouraged by the World Bank and
IMF to encourage foreign investment and growth through exports, including
cutting domestic spending. They fear such move would deepen countries in
Devarajan says the World Bank does not impose conditions on
its clients. He says it and other donors evaluate poverty reduction programs devised
by national governments and agree to fund plans that are likely to work.