AFRICAN AID BANK POLICY CRITICIZED

AFRICAN AID BANK POLICY CRITICIZED

Western donors are demanding that greater care be taken with their contributions to the African Development Bank, after a surge in lending last year.

Meeting in Abidjan last week, some of the 25 non-African members of the agency accused it of trying to grow too fast and being too liberal in dispersing soft loans in trying to become a key vehicle for modernizing the continent."The Africans are very proud of this institution. But they just want it to grow too fast," one donor nation governor said during a series of meetings that ended Saturday.

Some delegates from the bank's 50 African members say the new tougher mood among donor countries reflects the West's renewed confidence in the universal benefits of capitalism now communism has collapsed in Eastern Europe.

Ghana's finance minister, Kwesi Botchwey, said there was "a surge of triumphalism in the West, with ominous portents for relations between developing countries and the donor community."

He said donors increasingly believed the continuing crisis in Africa was of its own making.

African appeals for a 75 percent hike in its budget for soft-loans to $4 billion and pleas for relief on Africa's estimated $226 billion of debt elicited little more than lectures on the need for sound economic policy.

"No amount of direct financial assistance or debt relief is sufficient to allow economic growth in the absence of sound economic policy reforms," said George Folsom, ADB governor from the United States.

ADB President Babacar N'Diaye, re-elected for another five-year term, urged the bank's members to avoid open conflict.

But his efforts to make African trade and economic integration the central theme of the conference was overshadowed by criticism from non-African members of the bank's expansion.

They warned against another massive lending surge such as Mr. N'Diaye presided over in his first term. Loans amounted to nearly $3 billion last year - the equivalent of its whole five-year program a few years earlier.

Donors argued the bank needs tighter checks on the quality of loans and to keep arrears in repayments under control before launching into new areas.

"We shall continue to caution against unsound projects, programs and proliferation of activities," said Fritz Fischer, West German governor.

To avoid an open split at the close of the annual governors meeting on Thursday, the bank withdrew a proposal to give $55 million to its emergency relief fund and accepted curbs on spending $6.5 million it wanted to use to combat crises such as locust plagues or famine.

Lindores Douglas, Canadian ADB governor, said: "This is a development bank, not an emergency relief organization."