Bush asks for more World Bank grants, fewer loans

President Bush proposed today that the World Bank and other international lending institutions dramatically increase the share of their resources provided as grants rather than loans to poor nations.

In a speech at World Bank headquarters in Washington, Bush also called on the world’s lending institutions to provide funds to African countries and other poor and developing nations aimed at boosting education.

Many of those countries are burdened with huge accumulated debts. ‘‘The United States is and will continue to be a world leader on responsible debt relief,’’ Bush said.

‘‘I also propose the World Bank and other development banks dramatically increase their share of funding provided as grants rather than loans to the poorest countries,’’ Bush said.

‘‘Specifically, I propose that up to 50% of the funds provided by the developing banks to the poorest countries be provided as grants for education, health, nutrition, water supplies, sanitation and other human needs.

‘‘It would be a major step forward,’’ the president said.

Bush called his proposals ‘‘compassionate conservatism at an international level.’’

Bush’s suggestion that the World Bank should substitute grants for many of the heavily subsidised loans it now makes is an effort to help the world’s poorest nations, already struggling under mountains of old debt, from building up new debt burdens.

But critics say unless his administration offers to provide more money to the World Bank, the bank would end up with less money to help poor nations because the bank now uses the repayments of its old loans to make new loans.