The IMF's Poverty Reduction and Growth Facility-- A Factsheet (PRGF)
Poverty Reduction Strategy Papers—Proposed Amendments
to the Poverty Reduction and Growth Facility (PRGF)
Trust and the PRGF-HIPC Trust Instruments
Prepared by the Legal and Policy Development and Review Departments
Approved by Mark Allen and François Gianviti
November 4, 2004
1. On September 3, 2004, the Executive Board endorsed a number of changes to the PRSP architecture set out in a joint Bank-Fund staff paper on Poverty Reduction Strategy Papers--Progress in Implementation (SM/04/292; 08/09/04). As indicated in the summing up of that meeting, some of the proposed changes require amendments to the PRGF-HIPC Trust and the PRGF Trust Instruments, in particular, the elimination of the requirement of a joint Bank-Fund endorsement of a member country's PRSP.1 The Executive Board's approval of proposed decisions in individual cases under the PRGF and PRGF-HIPC Trust Instruments will imply that the member's poverty reduction strategy documents meet the requirements under the new framework.
2. The amendments needed to implement the changes are set out in the proposed decision. The amendments also consolidate and integrate into the PRGF-HIPC Trust and the PRGF Trust Instruments the rules on Interim Poverty Reduction Strategy Papers (I-PRSPs), PRSP preparation status reports, PRSPs, and Annual Progress Reports (APRs) on PRSP implementation for purposes of PRGF lending and HIPC Initiative decisions that have evolved over time and are set out in a number of summings up.2
The following draft decisions, which may be adopted by a majority of the votes cast, are proposed for adoption by the Executive Board:
I. Amendment of the PRGF-HIPC Trust Instrument
The Instrument to Establish a Trust for Special PRGF Operations for the Heavily Indebted Poor Countries and Interim PRGF Subsidy Operations (Annex to Decision No. 11436-(97/10), adopted February 4, 1997), shall be amended as follows:
1. Section I, Paragraph 1, subparagraph (ix) shall be revised to read as follows:
2. Section I, Paragraph 1, subparagraph (x) shall become Section I, Paragraph 1, subparagraph (xiv).
3. The following subparagraphs shall be added to Section I, Paragraph 1:
"(x) "I-PRSP" means an Interim Poverty Reduction Strategy Paper prepared by the member concerned setting out a preliminary poverty reduction strategy as a precursor to a full PRSP; and
"(xi) "PRSP preparation status report" means a report prepared by the member concerned updating the preliminary poverty reduction strategy set out in an I-PRSP in anticipation of a full PRSP; and
"(xii) "APR" means an Annual Progress Report prepared by the member concerned reporting on the implementation of a PRSP and updating it as appropriate; and
"(xiii) "Joint Staff Advisory Note" means a document prepared by the staffs of the Bank and the Fund containing an analysis of the strengths and weaknesses of the poverty reduction strategy of the member concerned and identifying priority action areas for strengthening the poverty reduction strategy during implementation; and"
4. The following sentence shall be added at the end of Section III, Paragraph 2(a):
5. Section III, Paragraph 2(c), third sentence shall be amended to read as follows:
"In addition, the member country concerned shall have prepared a PRSP and implemented satisfactorily the strategy therein described for at least one year by the completion point as evidenced by an APR that has been issued to the Executive Board normally within the previous 12 months but in any case within the previous 18 months, and has been the subject of an analysis in a Joint Staff Advisory Note also issued to the Executive Board."
II. Amendment of the PRGF Trust Instrument
The Instrument to Establish the Poverty Reduction and Growth Facility Trust (Annex to Decision No. 8759-(87/176) ESAF, adopted December 18, 1987 shall be amended as follows:
The following subparagraph (g) shall be added to Section II, Paragraph 1:
"(g) The Trustee shall not approve a new arrangement or complete a review under an arrangement unless it finds that (i) the member concerned has a poverty reduction strategy set out in an I-PRSP, PRSP preparation status report, PRSP, or APR, that has been issued to the Executive Board normally within the previous 12 months but in any case within the previous 18 months, (ii) the I-PRSP, PRSP preparation status report, PRSP, or APR has been the subject of an analysis in a Joint Staff Advisory Note also issued to the Executive Board, provided, however, that no Joint Staff Advisory Note will be required in connection with a PRSP preparation status report, in which case the analysis of the PRSP preparation status report will be included in the staff report on a new arrangement or a review under an arrangement, and (iii) if there are any weaknesses in the member's poverty reduction strategy, such as those identified in the Joint Staff Advisory Note, and they are critical to Fund support under a PRGF arrangement, they have been addressed. For purposes of this Instrument, the terms I-PRSP, PRSP preparation status report, PRSP, APR and Joint Staff Advisory Note shall have the meaning given to each of them in Section I, Paragraph 1 of the PRGF-HIPC Trust Instrument (Annex to Decision No. 11436- (97/10), adopted February 4, 1997)."
1The Acting Chair's Summing Up Poverty Reductions Strategy Papers-Progress in Implementation (BUFF/04/175, 09/10/04).
2In particular, Concluding Remarks by the Chairman Poverty Reduction Strategy Papers-Operational Issues, Poverty Reduction and Growth Facility-Operational Issues (BUFF/99/154, 12/27/99).