World Bank must reform policies: Yunus

Nobel Peace Prize laureate and economist Muhammad Yunus has urged the World Bank to reform its policies, saying the development lender has failed to achieve its main goal of eradicating poverty because of its failure to modernise anti-poverty lending programmes.

"Poverty eradication has been a major objective of World Bank since its formation 60 years ago, but it has failed to eradicate poverty," he said after a meeting with visiting World Bank president Robert Zoellick at his Grameen Bank headquarters at Mirpur on Sunday night.

Yunus was honoured with the Nobel last year for his Grameen Bank, which provides small loans to poor people, a formula that has been replicated around the world.

"The world has witnessed so many changes over the decades, but the WB remains static. It is urgent to bring changes to WB policies," he said.

Zoellick, who became the 11th president of the World Bank Group on July 1, left Dhaka last night after a two-day visit. He declined to talk to reporters after the meeting with Yunus.

"In reply to my suggestions, the World Bank president said it's one side of thinking, but there is also the reverse side," Yunus said, revealing Zoellick's reaction to his proposal.

The World Bank lends $20 billion a year on an average and less than 1 per cent of the money is destined for micro-credit and small entrepreneurs, which Yunus said should be at least 5 per cent.

Yunus asked Zoellick to assist developing countries, including Bangladesh, in carrying out financial policy reforms and suggested that its country offices should be autonomous in designing policies and implementation of strategies on the basis of a certain nation's needs.

"We can't apply the same policy in all countries. The country offices should identify problems of a certain country and then formulate policies to solve those," Yunus said. He criticised the World Bank's focus on growth-based development alone by investing in sectors energy ports and infrastructure.

"I've suggested involvement of the poor in their efforts for sustainable development. I told them you have forgot the people, who should be the centre of any development programme." "Yes, infrastructure can also help in eradicating poverty. But it will be successful only when the poor have ownership in that infrastructure," Yunus said.