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2001 IMFC/Development Committee Statements
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Statement by Haruhiko Kuroda,
Vice Minister of Finance for International Affairs, Japan
at the Joint Meeting of the International Monetary and
Financial Committee and the Development Committee

Washington, D.C., April 29, 2001

Since 1999 when the international community endorsed the PRSP framework, significant progress has been made in its implementation—32 Interim-PRSPs and four full PRSPs. I would like to commend developing countries, the Bank and Fund for their efforts behind such progress. High quality PRSP is essential to poverty reduction, and we welcome the progress being made in formulating the guidelines for Joint Staff Assessment, as it will help improve the quality of PRSPs.

To improve the quality of PRSPs even further, it is essential to strengthen Economic and Sector Work and other analytical work, to promote capacity building of developing countries, and to strengthen the participatory process. For our part, Japan has already committed firmly to providing support with a particular focus on the participatory process for PRSPs.

The PRSP process is to be improved by sharing experiences. The secretariat at both the Bank and Fund are thus required to provide feedback of the lessons they learn from their PRSP support, so that the international community will benefit from it.

With regard to the enhanced HIPC Initiative, as many as 22 countries have so far reached decision points. It is expected that these countries will demonstrate their ability to reduce poverty, and will reach completion points at the earliest possible time to make significant progress in their fight against poverty. In further implementing the enhanced HIPC Initiative, our challenge is how to embrace countries in, or emerging from, conflict under the Initiative. For that, it is essential to fully consider the special circumstances of these countries, and to take a case-by-case approach, while maintaining the Initiative's core framework that links debt relief with poverty reduction. In this respect, strengthening support for governments' capacity building, including public sector management, should be effective. In addressing the issues of post-conflict countries, I must point out that collaboration with other partners will be extremely important. Collaborating with the United Nation agencies' peace process and humanitarian assistance would be one such example.

For the heavily indebted poor countries to free themselves from unsustainable debt burdens and to achieve poverty reduction, it is mandatory that they build an economy with adequate levels of efficiency and productivity, thus making sustainable growth a reality. While developing countries' own initiative based on the sense of ownership is the most important factor in accomplishing reforms, we need to support such efforts by providing them with concessional loans and better access to markets in developed countries. Other essential measures include appropriate debt management by HIPCs, monitoring of debt sustainability by the international community, in particular the Bank and Fund, and better environment to attract private capital inflows.