ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Communal Violence- Eager Collusion

night before the Venice summit of the Club of the Rich Seven. Were the banks, individually if not collectively, serving notice that they had lost faith in so-called international action to revive the repayment capacities of their third world debtors? Back in 1985 was floated what was called the Baker plan, addressing specially the pro- blems of the 15 most indebted third world countries. Under the Baker plan, the problems of these countries were to be sorted out with the help of new commercial bank loans supplemented by increased World Bank assistance under a programme calling for major economic reforms in the debtor countries. Instead, there has been a steady net outflow of funds from these debtor countries at the rate of $ 30 billion a year. Therefore, for the summiteers at Venice the Citibank's initiative should have served as a reminder, if one were needed at all, that not only was the Baker plan in tatters but also the commercial banks were in no frame of mind any longer to play the role in the recycling of international funds that they had taken on at one stage, purely by default, because the multilateral financial system had abdicated its responsibility. Unfortunately, the deliberations and conclusions of the Venice summit only confirm the suspicion that the day is still far away when the rich countries would realise that, for their own sake as much as for the sake of the world as a whole, it is imperative that the function of financing of international payments is performed multilaterally and that too with due regard for not only growth but also equity and development.

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