SINGAPORE - Divisions over the World Bank’s handling of corruption burst into the open today ahead of a vote on governance reforms likely to expose deep fault lines at the bank’s sister agency, the International Monetary Fund (IMF).

World Bank president Paul Wolfowitz has irked major shareholding countries in his zeal to root out corruption by holding up some loans, including aid to India’s health sector.

The UK’s international development secretary, Hilary Benn, said the bank should support developing nations in tackling corruption but should not dictate the solutions.

"None of us should walk away from assisting poor people, even where the situations are difficult," Benn told the bank’s main policy-steering committee.

The issue of corruption is a lightning rod for broader dissatisfaction with Wolfowitz’s management of the bank. The UK has threatened to withhold a 50-million pound ($94m) payment to the bank because it believes the lender is tying too many policy strings to its aid.

Speaking to the committee, Wolfowitz countered that good governance, based on sound principles of accountability and transparency, ensured that funds were spent as intended and was vital to accelerating economic growth and alleviating poverty.

"Those purposes are to provide good schools for poor children, to help poor mothers get access to good health care and to give poor workers the chance for a good job — not to line the pockets and bank accounts of the corrupt and powerful,” he said.

South Korea lined up behind the UK, with finance minister Kwon O-kyu insisting that the bank remain “on the ground” to tackle poverty. And India’s finance minister, Palaniappan Chidambaram, said it was wrong to hold development lending hostage to the fight against corruption.

The Development Committee met ahead of the tallying of votes on a plan to overhaul the way the 184-member IMF is run to better reflect the growing clout of emerging economies.

The blueprint, which IMF chief Rodrigo Rato says would usher in the most significant change at the fund in a generation, is almost sure to be approved because it has the support of the agency’s main shareholders.

The overhaul aims to correct the under-representation of countries like China, which has fewer votes than Belgium or the Netherlands even though its economy, the world’s fourth-largest, is twice the combined size of the two European countries.

However, the plan has exposed deep divisions in an agency struggling to reinvent itself in a world where fewer countries are turning to it for emergency loans and big countries are frequently ignoring its policy advice. India, Argentina, Egypt and Brazil are among those objecting to the plan, which they say will not give them enough power in the fund.

Today ministers reaffirmed their support for the resumption of global trade talks, a day after British finance minister Gordon Brown said he had become more hopeful about the chances of a breakthrough.

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