US officials said on Friday they were "strongly opposed" to any engagement by the World Bank in Iran, and registered their opposition with Group of Seven finance ministers and with the management of the bank, reported Reuters.
The executive directors of the World Bank on Thursday approved the Washington-based lender's proposal for a two-year interim economic strategy for Iran. The United States voted against the proposal because of the country's alleged record on terrorism and human rights, said the agency.
"It is US policy to oppose multilateral lending to Iran for both terrorism and human rights reasons," said one Bush administration official.
"We also continue to be concerned about the economic policy environment and believe it is premature to resume World Bank lending there," he said, cited by the agency.
Meanwhile, a spokesman for the US Treasury said that while it was pretty clear that a majority on the 24-member board of the World Bank favors the plan: "We don't think it's a rational move right now."
The spokesman added that the United States believes it is important to support "reformist elements," and that it does not believe the current proposal does that.
However, Merrell Tuck, a spokeswoman for the World Bank said that the proposed program was a cautious one which gave backing to reforms, according to the agency.
"The strategy proposes a cautious stand where the bank will fully monitor progress on governance, structural reforms and economic management," Tuck said.
She stressed that the World Bank board meeting on Thursday was not to approve a loan, only to approve a strategy for the country. However, the strategy would be backed by some $755 million in lending.
But Tuck said that the bank did not foresee putting this lending to the board for a vote for at least another year. The lending would require a separate vote.
"Any lending would focus on basic needs and the environment," she said.
Even though it is the single largest shareholder of the global lender, the United States, on its own, cannot actually prevent a loan from going through. But one bank insider said that the board usually tries to move in a consensus style so there is usually an effort to negotiate the differences.
In May 2000, Israel, the US, and Jewish groups failed to block approval of two loans for Iran: $87 million for health services and $145 million for a Teheran sewage project, said the paper.
Israel's Finance Minister Silvan Shalom recently asked World Bank President James Wolfensohn to block the loan.
Bur Wolfensohn refused Israel's demand, said the Jerusalem Post on Thursday.
The money would not be transferred until at least 2002 - Albawaba.com
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