U.S. Wants to Cancel Poorest Nations' Debt

The Washington Post reports that the Bush administration is advancing a plan (registration required) to forgive debts to developing nations from the World Bank and IMF. They also want to move financial aid to developing countries to grants rather than loans.

This move has been criticized as a political move by Bush domestically and abroad--to clean up his international image as well as clear up major repercussions from Iraqi reconstruction--as well as a move which will hurt the World Bank's ability to fund future projects (I'm assuming because then the World Bank doesn't earn interest on the loans).

To me it also seems like another example of the US trying to be more autonomous in its relations with the world--picking up its ball and starting a game somewhere else. On the surface, it sounds like a great idea; unfortunately the rationale is most likely more insidious.