§ John BarrettTo ask the Chancellor of the Exchequer what steps he is taking to reform the workings of the International Monetary Fund in favour of lower income countries. [138389]
§ John HealeyThe UK Government believe that International Monetary Fund (IMF) support to low-income countries should work within its areas of competence to help these countries achieve the macroeconomic stability and supporting policy measures crucial to poverty reduction and delivery of the Millennium Development Goals. The IMF's chief form of support to low-income countries is through the Poverty Reduction and Growth Facility, which was created in 1999. This facility is designed to support country-led poverty reduction strategies, and the UK has been at the forefront of efforts to ensure that the IMF's work is based on these strategies.
Discussions were held at the annual meetings of the IMF and World Bank in Dubai in September where my right hon. Friend the Chancellor of the Exchequer chaired the International Monetary and Finance Committee meetings. The Committee noted that faster growth will be needed in low-income countries in order to reduce poverty, and that this would require stronger policies and institutions, better governance and increased and more effective aid.
The Committee observed that the IMF should remain engaged with these countries in the long-term, encouraging it to undertake further initiatives to support higher sustained growth and poverty reduction, improved governance, and reduced vulnerability to shocks. The IMF will prepare a number of Board papers on these issues, and the Committee looks forward to a review of progress at its next meeting.
The Committee also noted the need for increased and more effective aid, and for enhanced market access. The Committee urged the IMF to work with the World Bank on aid effectiveness, aid absorption, results-based measurement systems and financing mechanisms, including the International Finance Facility. Developing and emerging market countries are being consulted on this, and France will host an international conference in spring next year.
526WIn respect of representation of developing countries on the Boards of the IMF and World Bank, the Development Committee, meeting in Dubai, agreed to continue efforts to build the necessary political consensus on this issue, with a roadmap to be produced for the spring meetings. The International Monetary and Financial Committee welcomed measures under way and asked the IMF to examine these issues further.