Development Committee communiqué: Ministers endorse approach to poverty reduction, welcome enhanced World Bank-IMF cooperation

• Pages: 326-328

Page 326

The sixtieth meeting of the Development Committee was held in Washington, D.C., on September 27, 1999, under the chairmanship of Tarrin Nimmanahaeminda, Minister of Finance of Thailand.

Debt initiative, enhanced poverty focus

Ministers expressed their appreciation to the Bank and the IMF for the transparent and participatory manner in which they conducted the 1999 Heavily Indebted Poor Countries (HIPC) Initiative review. They welcomed the important role played by civil society in the development of proposals designed to make the debt relief under the HIPC Initiative deeper, broader, and faster.

Ministers endorsed-subject to the availability of funding-the enhancements to the HIPC Initiative framework for countries pursuing sound policies and committed to reform. In this context, they expressed support for a lowering of the debt sustainability thresholds to provide a greater safety cushion and increased prospects for a permanent exit from unsustainable debt, the provision of faster debt relief through interim assistance, the introduction of floating completion points that would shift the focus of assessment toward positive achievements and outcomes rather than the length of the track record, and the resulting increase in the number of countries expected to be eligible for debt relief.

Ministers also endorsed the proposed framework for strengthening the link between debt relief and poverty reduction while recognizing that debt relief alone would be insufficient to achieve this goal. In this context, they welcomed the proposed Poverty Reduction Strategy Papers, to be prepared by national authorities in close collaboration with Bank and IMF staff. They stressed that the Poverty Paper should be in place by the decision point; they recognized, however, that on a transitional basis the decision point could be reached without agreement on a Poverty Paper, but in all cases demonstrable progress in implementing a poverty-reduction strategy would be required by the completion point.

Ministers also welcomed and endorsed the proposals developed by the Bank and the IMF to extend the same approach to enhancing the poverty focus of all International Development Association (IDA)- and Enhanced Structural Adjustment Facility (ESAF)-supported programs and to strengthen collaboration between the two institutions. The Committee emphasized that the strategies set out in the new Poverty Papers should be country driven; be developed transparently with broad participation of elected institutions, stakeholders-including civil society, key donors, and regional development banks; and have a clear link with the agreed international development...