Wednesday, June 09, 2010

British government to survey the effectiveness of the big development banks

The British government is going to begin a review of the big multi-national banks that they give money to. The government says the results of the review could change the amount of money they give to big banks like the World Bank, African Development Bank and others.

The UK aid survey will be looking at how effective each organization is in spurring development and fighting poverty. The UK warns that some banks could have their funding stopped entirely if the review shows that they are doing a poor job.

From Reuters Alert Net, writer Matt Falloon tells us more about the goals for the review.

The Conservative-Liberal Democrat coalition government, which has promised to spend 0.7 percent of national income on overseas aid by 2013, is faced with a record budget deficit and is eager to ensure taxpayers' money is being spent wisely.

"Organisations that demonstrate value for money and the greatest impact on poverty could receive a cash boost," the international development ministry said in a statement.

"Those that fail to meet the tough criteria could have their funding reduced or stopped altogether."

Britain gives less than half of its aid budget to multilaterals and donated about 3 billion pounds ($4.33 billion) to such bodies last year.

The coalition has pledged to protect aid funding from the big spending cuts required to reduce a deficit running close to 11 percent of national output, but it is unclear whether the level of funding to multilaterals could be cut within that.

The review, which starts straight away, will judge whether the institutions are effectively delivering value for money and in tune with Britain's international poverty reduction aims.

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