§ Lord Juddasked Her Majesty's Government:
What progress has been made bilaterally and multilaterally in prioritising human development and sustainable economic policies in the application of debt relief policies; and how far the role of the International Monetary Fund in the recognition of which countries should be eligible for such relief is now shared by the World Bank, individual governments and other appropriate agencies. [HL131]
§ Lord McIntosh of HaringeyAs part of the enhanced HIPC debt initiative proposed at the G7 Summit in Cologne and subsequently agreed at this year's IMF/World Bank Annual Meetings, the IMF has adopted a new structural reform process, the Poverty Reduction and Growth Facility. This facility will promote good governance and will be based on pillars of increased and more effective fiscal expenditures for poverty reduction, with better targeting of resources, especially on social priorities in basic education and health, enhanced transparency, stronger country ownership of the reform and poverty reduction process and macroeconomic stability. The reforms adopted followed the recommendations made by the UK Government in its submission to Phase II of the HIPC Review.
At the heart of the new Poverty Reduction and Growth Facility will be poverty reduction strategies which will be prepared by the countries themselves, in consultation with the IMF, the World Bank and Civil Society. This new co-ordinated approach will mean closer working between the IMF and the World Bank in relation to HIPC.
Bilaterally, the UK also provides support under the HIPC Capacity Building Programme, which assists HIPC countries in drawing up sensible debt management strategies so that they can achieve a permanent exit from unsustainable debt burdens.