IMF chief seeks fresh funds for poor countries

Sun Apr 22, 2012 5:49pm EDT
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By Alexandra Alper

WASHINGTON (Reuters) - The head of the International Monetary Fund on Sunday renewed a push to fully fund a $17 billion lending package for poor countries, which are threatened by high oil prices and the risk of euro-zone contagion.

Two days after the IMF secured $430 billion to deal with economic spillovers from Europe's debt crisis, IMF Managing Director Christine Lagarde said her next focus was to raise funds for the IMF's Poverty Reduction and Growth Trust, which provides low-cost loans to poor countries in Africa, Asia and Latin America.

Lagarde urged wealthy countries, which made a profit from the IMF's sale of 403.3 metric tons (444.56 tons) of gold last year, to reinvest the windfalls into the PRGT.

"We need more money in that trust if we want to finance concessional loans for the low-income countries," she said after talks in Washington with African finance chiefs.

The IMF in 2009 set a target to raise $17 billion to lend to the poorest countries. So far, 32 IMF member countries have reinvested profits from the gold sales into the fund.

Lagarde's comments were aimed at easing concerns that the IMF and donor nations may turn a blind eye to poor countries as they home in on containing the euro zone crisis.

Elizabeth Stuart, a spokeswoman for Oxfam, said poor countries have exhausted their resources to deal with contagion from the rich world, while facing the first drop in aid since 1997.

"Governments are throwing money at the IMF to deal with the European crisis, but where's the money for poor countries?" she asked.   Continued...

International Monetary Fund (IMF) Managing Director Christine Lagarde gestures at a news conference following the African Consultative Group (ACG) meeting in Washington April 22, 2012. REUTERS/Yuri Gripas