file3 - O ver the past fifteen years, the IMFs role in...

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Unformatted text preview: O ver the past fifteen years, the IMFs role in helping its poorest member countries achieve sustain- able improvements in their balance of payments posi- tions, economic stability, and living standards has increased considerably. Beginning with the Structural Adjustment Facility (SAF) in 1986 and then the Enhanced Structural Adjustment Facility (ESAF) in 1987, concessional assistance to poor countries has become a major feature of the IMFs work. This focus has also brought with it growing atten- tion to the social impact of IMF-supported economic adjustment programs and to the broad range of requirements for economic development and poverty reduction, including trade policy reform. But the persistence of povertyand mounting pub- lic pressureunderscored that more had to be done. While the design of antipoverty programs remains the primary responsibility of member countries with the assistance of the World Bank and other development agencies, the IMF plays an important role, particularly in the areas of macroeconomic and financial sector poli- cies. The IMF and World Bank are cooperating closely, and working with governments in individual countries, on a new approach that strengthens the links among poverty reduction, economic growth, and debt relief. For the IMF, the centerpiece of the strategy is its concessional loan facility, the Poverty Reduction and Growth Facility (PRGF). In effect, the IMF trans- formed the ESAF into the PRGF to make poverty reduction a key element of a growth-oriented, country- owned strategy by combining concessional lending from the IMF in support of appropriate macroeconomic poli- cies with antipoverty assistance from the World Bank and other development agencies. The programs sup- ported by the PRGF are framed around a comprehen- sive poverty reduction strategy developed by the authorities of the country in consultation with civil society and supported by the international community. Macroeconomic stabilization and external viability central goals of IMF lendingare fundamental to the approach because they are essential to sustainable eco- nomic growth, the key to poverty reduction. The PRGF is being combined with a stronger effort to bring debt relief to heavily indebted poor countries (HIPCs). During FY2000, the joint World BankIMF HIPC Initiative was enhanced to provide deeper, broader, and faster assistance to eligible coun- tries that are following sound economic policies, to help them reduce their external debt burdens to sus- tainable levels in a way that promotes effective poverty reduction. Notwithstanding the broad support for the enhanced HIPC Initiative, by the end of the financial year more remained to be done on the issue of financ- ing for the Initiative: about 60 percent of contributions pledged by many industrial, developing, and transition Poverty Reduction and Debt Relief for Poor Countries A N N U A L R E P O R T 2 0 0 0 49 C H A P T E R 5 The Committee urges all those with a stake in the HIPC Initiative to work for faster and effective implementa-...
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This note was uploaded on 08/29/2011 for the course ECON 201 taught by Professor K during the Spring '08 term at Susquehanna.

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file3 - O ver the past fifteen years, the IMFs role in...

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