Tuesday July 17 9:57 AM ET

Bush Calls for World Bank to Increase Grants

WASHINGTON (Reuters) - President Bush on Tuesday will propose the World Bank consider making up to 50 percent of its cash disbursements in grants rather than loans, a White House aide said.

Mary Ellen Countryman, White House spokeswoman for the National Security Council, said Bush would make the proposal at a speech at the World Bank on Tuesday.

``The World Bank should consider doing up to 50 percent (grants) rather than loans,'' Countryman said, noting that much of the lender's loans were written off eventually so, ``Let's call it what it is. It's a grant.''

Countryman said that after about 10 years of providing grants, donor countries like the United States and others would have to increase funding for the World Bank to pay for the proposal.

The idea that the World Bank provide more grants rather than loans has been mentioned often by U.S. Treasury Secretary Paul O'Neill.

-----