Brown: These joint meetings reflected our shared concern that debt relief should lead to poverty reduction and our recognition of the need to act with the new measures to make possible further progress for debt relief. We welcomed the determination of the World Bank and the IMF to do everything possible to bring 20 countries to the HIPC [Heavily Indebted Poor Countries] decision point by the end of 2000. Eleven countries have disqualified themselves from the debt relief. We have money for it, but debt relief will not lead to poverty reduction as long as there is conflict and civil war. We also discussed the effect of the oil price rise. The IMF may need to respond flexibly to the needs of members that arise from this sustained period of high oil prices. For the HIPC debt-relief process, this will have to be examined. Our way to the end is debt reduction leading to poverty reduction leading to economic development.
Sinha: I would like to assure you, on behalf of the Development Committee, that we will continue to work in the same spirit of collaboration and with the same zeal to achieve poverty reduction and the general well-being of the people in the poorest of the poor countries.
Brown: The sunset clause is an extension for two more years to allow countries to enter the process. As far as flexibility, the track record that had required a longer period of time will now require, if necessary, a shorter period of time. So it is flexibility in time without removing the requirement for conditionality.
Brown: The IMFC communiqué raises these issues. And these issues are subject to debate in the WTO [World Trade Organization] and other organizations.
Fischer: I’m not sure anyone will ask the right question, so let me mention that the IMF got very good news today about our ability to finance part of the HIPC Initiative. There was a need to borrow money from some of our members so that we could lend it in the HIPC Initiative and in the PRGF [Poverty Reduction and Growth Facility]. And today, we were told by both Germany and France that they would be willing to provide a billion SDRs each, which means we have 2 billion out of the total 4 billion as the loan resources for the PRGF. These very generous contributions are loans in which SDR interest rates will be paid. Nonetheless, they are very critical contributions to the success of the PRGF.
Brown: [U.S. Treasury Secretary] Lawrence Summers has made it clear that one of the priorities for the president is to secure the funding for the initiative from Congress. It is also the case that the trust fund has $2.6 billion that countries have promised to it. That money is coming in. As I said in relation to conflict countries, it is not the lack of money that is the issue here. It is the lack of peace in these countries.
Photo Credits: Denio Zara and Padraic Hughes for the IMF.
Brown: On the number of countries, the Joint Implementation Committee of the World Bank and the IMF has a list of countries that may be eligible. The list is greater than twenty, but they expect, and hope, to get 20 through by the end of the year. So there may be more countries, but they would have to meet the terms. As for flexibility in the track record, the time that people have to meet that track record has been interpreted more flexibly. That is the change that is being made there. On the question of oil, I’m sure this will be part of the discussion of the Development Committee tomorrow. For the poorest countries, the consequences of the oil price rise, if it were to be sustained, are such that we cannot stand back and say nothing about that. The consequences for many countries are devastating. That is why it was important for these countries to record that as a problem in the communiqué.