IMFC press conference: International community only as strong as its weakest link in tackling terrorism finance

• Pages: 120-121

Page 120

QUESTION: Could you give us some more details on the new International Finance Facility (IFF) proposed by the United Kingdom?

B ROWN : The proposal involves the front- loading of aid based on existing donor commitments, on the basis of which the facility would leverage in additional money from international capital markets. The existing bilateral and multilateral channels for distributing aid would remain in place. We believe it is possible to raise the amount of aid from $50 billion a year-a figure that in real terms has been relatively constant for some time now-to $100 billion a year, leading to an effective doubling of aid. The Zedillo Commission, the World Bank, and a number of other agencies agree this is the sum that is needed to meet the Millennium Development Goals (MDGs).

As part of the Monterrey Consensus, countries agreed that any developing country that carries out necessary reforms such as opening up to trade and investment and dealing with corruption should not be denied resources to invest in education, health, and antipoverty programs that would enable it to meet the MDGs. So that is the spirit of the IFF. We discussed the IFF during our current meeting, and a number of countries supported the facility, but we will await a report by the IMF and the World Bank on this issue before taking the proposal further.

QUESTION : You mentioned a new international approach to fiscal rules in your statement to the IMFC, but I don't see this point in the communiqué.

B ROWN : What I said this morning, speaking as the finance minister of the United Kingdom, was that, now that the world economy is strengthening, it is a good time to examine the performance of different fiscal policy mechanisms, during both the growth period of this economic cycle and the recent global downturn. I suggested we might compare existing fiscal discipline mechanisms-including the Stability and Growth Pact, the balanced budget rule, and the golden rule (which is the rule that guides British fiscal policy)-and see which of the different systems have been most helpful in moving economies through the global downturn. As you may know, the IMF is currently looking at fiscal policy and is working on a report that will be discussed at the IMF- World Bank Annual Meetings in October.

QUESTION: Is there a consensus within the IMFC that the IMF is the right institution to take on the responsibilities of combating terror financing and money laundering?

B ROWN : The...