§ Mr. Ben ChapmanTo ask the Secretary of State for International Development if she will make a statement on the role of the IMF in poverty reduction. [105236]
§ Mr. FoulkesAt the Annual Meetings of the World bank and IMF in September 1999, as part of the discussion on revision of the Heavily Indebted Poor Countries (HIPC) Initiative it was agreed that all low-income countries would produce poverty reduction strategies (PRS). The process of developing these strategies will be led by national Governments, and involve discussion with civil society and the international community, including the IMF. They will integrate macro-economic objectives, structural reforms and social policies and programmes, and centre on the achievement of the international development targets. The IMF have committed themselves to providing their assistance to the poorest countries within the framework of these poverty reduction strategies; as a sign of this new focus, the Enhanced Structural Adjustment Facility (ESAF) has been redesignated as the Poverty Reduction and Growth Facility (PRGF).
This commitment to the poverty reduction strategy approach is consistent with the recommendations of the 1998 Review of ESAF, which proposed that the IMF should take more account of the social impact of their programmes, consider the quality of Government expenditure and protect budgets in high priority areas such as health and education. It encouraged greater joint working with the World bank, and emphasised the need to build broad-based support for reform programmes, to ensure their success. Following proposals put forward by the UK, the World bank, in consultation with the IMF and the UN, has developed principles of good practices in social policy. We envisage that these principles will be drawn upon in the design of poverty reduction strategies and supporting donor programmes.