World Bank Chief Keen on Different Russia

Visiting World Bank president Robert Zoellick had strong praise for Russia's economic performance Monday, and the compliments were returned by President Dmitry Medvedev, who said Moscow was eager to take part in initiatives recently put forward by the global body.

Zoellick, on his first visit to Russia since he was appointed to head the bank last year, said the robust economy meant that the tide had turned for a country that had once been on the receiving end of aid from global institutions.

"It's a very interesting time for Russia and its relations with the bank," Zoellick told Medvedev at the start of the meeting at the Kremlin. "We are interested in learning your plans for the future and how we can help."

Projects to help poorer nations address the threat posed by rapidly rising global food prices were one of the main topics of discussion. The bank announced in late May that it wanted to set up a $1.2 billion fund to help low-income countries deal with the problem, and Russia has said it is interested in supporting the initiative.

Moscow is considering allocating between $50 million and $100 million to help address the global food crisis, said a source close to the talks.

Prime Minister Vladimir Putin, in a meeting with Zoellick later in the day, put the stress on Russia's changed relationship with the bank, saying the country no longer considered the institution as a donor, but rather as a source of know-how and expertise, Interfax reported.

Medvedev said Russia had noticed changes for the better at the institution under Zoellick's leadership.

"It is now focused on the aims of its charter to a significantly greater degree, and the program adopted under your leadership facilitates the goals of the global development," Medvedev said.

Zoellick took over at the bank for Paul Wolfowitz, who resigned last year following weeks of controversy over his involvement in finding a well-paid position for his girlfriend in the U.S. State Department. Before his two-year stint at the bank, Wolfowitz was a key Pentagon architect of the invasion of Iraq, which Russia strongly opposed.

Zoellick came to Moscow from Osaka, Japan, where he had participated in a meeting of finance ministers from the Group of Eight ahead of a summit on the Japanese island of Hokkaido in early July. With global food supplies and prices set to be high on the summit's agenda, the G8 finance ministers discussed plans to establish the fund for poor nations over the weekend.

Andrei Bokarev, a senior Finance Ministry official, told reporters over the weekend in Osaka that the $1.2 billion fund could be established in about 1 1/2 months, RIA-Novosti reported Monday. Bokarev said it was not yet clear who the main donors would be.

That funding could reach $4 billion to $6 billion over the next three or four years, Prime-Tass reported from Osaka. A ministry spokesman could not confirm the reports Monday, saying Bokarev was unavailable.

Food experts welcomed the idea of the fund in principle, but said sustainable policies — not just the money — were needed to alleviate hunger.

As the country's coffers continue to bulge on the strength of revenues generated by high energy prices, Moscow appears to be in a position to make a sizeable contribution to the food-supply efforts, but even the modest sums currently under discussion could become a bone of contention at a time when the government is looking to lift some of the country's own regions out of poverty, the source said.

The United Nations Food and Agriculture Organization estimates that some 850 million people in the world go hungry. Russia's foreign currency reserves trail only those of China and Japan and are rising rapidly on the back of oil and gas exports, according to some estimates.

At the meeting in the Kremlin, Zoellick was accompanied by bank vice president Shigeo Katsu and Klaus Rohland, the bank's representative in Russia. Finance Minister Alexei Kudrin and Medvedev's foreign policy and economic aides, Sergei Prikhodko and Arkady Dvorkovich, were also in attendance.

The atmosphere as the Kremlin meeting opened was somewhat heavy, and Zoellick made an apparent effort to lighten the mood by comparing his and Medvedev's career paths.

Zoellick said the two had met when he was still with Goldman Sachs, to which Medvedev, who appears to be growing more at ease in public meetings with major figures, shot back, "How can I forget?"

Zoellick then said: "We both changed jobs, and I think you've done better. Congratulations."

In between his meetings with Medvedev and Putin, Zoellick attended the Institute of Modern Development, a think tank linked to Medvedev's administration.

Zoellick is scheduled to oversee a signing of a memorandum of understanding between the World Bank and the Russian Development Bank Tuesday morning.

The World Bank currently oversees 22 projects worth $2 billion in Russia.