IMFC-Development Committee Joint Meeting
Statement by Mr. Bosse Ringholm, Minister of Finance,
Fighting Poverty and Strengthening Growth
We welcome the attention this joint meeting gives to fighting poverty and strengthening growth in the world's poorest countries. While we can see a great deal of progress, we also realize that much work remains
The International Development Goals as adopted by the UN Millenium Assembly provide a vision and a framework for galvanizing our efforts to fight poverty.
The PRSP is a promising approach, but is still in a learning phase. We welcome the increased cooperation between the IMF and the World Bank. In many areas the World Bank is likely to have a larger role in facilitating the process than the Fund. The Fund, mainly by giving advice in the formulation of macroeconomic policy, can provide assurance to donors that the overall framework is in place and working satisfactorily. This is vital for increasing donor alignment.
We welcome the introduction of a separate facility (PRSC) in the Bank for financing poverty reduction programs. This will make it easier for each institution to focus on its area of expertise while, at the same time, respecting the complementarity between the macroeconomic and social structural issues. We support that disbursements under the PRGF and PRSC will be made only if the country's strategy as a whole is broadly on track.
Poverty and social impact analyses of the policy measures are critical to ensuring that poverty is reduced in the HIPC countries. Much work needs to be done to improve countries' public expenditure management and tax systems, as well as their capacity to track poverty-related spending.
The achievements under HIPC are commendable, but we are not at the end of the road. First, let me recall that we have not yet fully secured financing of HIPC. It will require continued efforts.
Secondly, it is evident that it will be relatively more difficult for some of the remaining countries to qualify for debt relief. We should show reasonable flexibility in these cases, while at the same time adhering to the basic principles of the HIPC-initiative.
Countries emerging from conflict need substantial assistance to break the cycle of violence, low growth and poverty. Overall we endorse increased Bank and Fund efforts to increase assistance to post-conflict countries.
The overriding goal of the HIPC initiative is a sustainable exit from the debt trap. Therefore, when assessing countries' progress towards completion point, we should be looking for credible adjustment and commitment. We need to start measuring success in terms of quality instead of just numbers. But we should also be prepared to assess the debt relief at the completion point if exogenous factors severely affect the sustainability.
Much of the responsibility for the success of fighting poverty and strengthening growth rests on the countries themselves. On the other hand, outward-orientated policies, which are the corner stone of a successful growth strategy, should be supported by market opening measures from the industrial countries' side.