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U.S. Lawmakers: Cut Support for World Bank Because of Iran

June 14, 2000
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A number of U.S. lawmakers are proposing to reduce U.S. contributions to the World Bank unless the international body stops the approval of millions of dollars in loans to Iran.

The measure, led by Rep. Brad Sherman (D-Calif.) and supported by some Jewish groups, would reduce dollar-for-dollar the U.S. appropriation to the World Bank by $231 million, the amount the World Bank plans to provide to Iran.

“This would force the World Bank to think twice about loaning money to Iran,” said Don MacDonald, an aide to Sherman.

In a letter to U.S. Rep. Sonny Callahan (R-Ala.), chairman of the U.S. House Appropriations subcommittee on foreign operations, Sherman said the trial of 13 Iranian Jews accused of spying for Israel is symbolic of Iran’s failure to change its policies. He also notes Iran’s continued support of terrorism.

Congress has taken similar action to the proposed reduction in the past. In 1994, the foreign aid bill reduced the usual U.S. appropriation to the World Bank by $460 million, the amount of the loan package approved for Iran.

This year’s foreign operations bill was scheduled to be debated on Wednesday.

The United States’ $800 million contribution to the World Bank goes to the International Development Association branch, which provides long-term loans at zero interest to the poorest of the developing countries.

MacDonald acknowledged that some members of Congress would be reluctant to support the measure because it would result in a cut in World Bank funding to poor nations.

But if the lawmakers’ proposal is adopted, the $231 million taken from the International Development Association would be transferred to the U.S. Agency for International Development, which also supports poorer countries.

As of Tuesday, the proposal only had support from eight members of Congress, but the letter only began circulating last week. If the measure fails in the subcommittee there will be a bigger push to get an amendment introduced in the full House Appropriations Committee, according to Sherman’s office.

Malcolm Hoenlein, executive vice chairman of the Conference of Presidents of Major American Jewish Organizations, called the proposal a “useful step.”

“We support efforts to send a strong message to Iran,” he added.

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