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Economic, Business & Technology News

  • Written by Nora Honkaniemi and Clare Birkett

World Bank crisis-lending contravenes Eurodad responsible lending principles

The map identifies 38 of the 40 Heavily Indebted Poor Countries (HIPC). Black: Countries which currently qualify for full HIPC relief. Olive: Countries which currently qualify for partial HIPC relief. Beige: Countries which are eligible for HIPC relief but have not yet met the necessary conditions. Source: wikimedia. Creative Commons Attribution ShareAlike 3.0 license.Despite commitments by the World Bank to significantly reduce conditions attached to its loans, research from Eurodad reveals that a massive 57 conditions were attached to three loans given to Ghana in 2009. 12 out of the 57 conditions were stipulated in a side document, and not made explicit in loan agreements themselves, contravening responsible financing principles.

These economic policy conditions restrict the right of Ghana - a country with good democratic credentials - to decide for itself how to recover from the global crisis and boost sustainable investment. The reforms that the World Bank imposes may hinder not help Ghana's development and democratic institutions, write Nora Honkaniemi and Clare Birkett of Eurodad.

Ghana, from riches to rags

This decade it appeared Ghana could be well on the way to becoming a development success story. Praised for its functioning multiparty democracy, fast economic growth and prosperous business environment, there were high expectations by Ghanaians and donors alike, that the country would graduate from low to middle income status in the mid 2000s.

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