Michael D. Higgins
Question:43 Mr. M. Higgins asked the Minister for Finance the reforms he proposes in relation to the Bretton Woods institutions; and if he will make a statement on the matter. [8398/01]
Written Answers. - Bretton Woods Institutions.
I refer the Deputy to a question on these lines which I answered last November. While the position has not changed significantly since then I would like to take this opportunity to add some observations. Ireland has been active in seeking reform of the Bretton Woods institutions in a variety of areas over the past number of years.
On the issue of debt relief, the House will be aware that I am a strong advocate of greater speed and flexibility in implementing the enhanced HIPC initiative. With our co-constituents of Canada and the Caribbean countries we have been pressing for reforms in order to bring faster and more effective progress on poverty reduction.
In this context I stressed in my contribution to the annual meetings in Prague that the parameters of the HIPC initiative should be kept under review, with a view to appropriate remedial action where necessary. During 2000 such remedial action became necessary in the case of Zambia. I informed our representatives at the bank and fund that Ireland would support any action necessary to ensure that Zambia's debt service obligations were reduced, and that account should be taken of the capacity of Zambia to service any post-HIPC debt, even if this would require extra funding on the part of the donor countries.
I also indicated to our representatives that a further enhancement of the terms of the HIPC initiative may be required in order that human development indicators are taken into account when calculating debt service sustainability, so that expenditure on social services is assured before any debt service is deemed to be payable.
I am pleased to note that the International Monetary Fund recognised the exceptional circumstances facing Zambia and made special arrangements to reduce its debt service payments. I will continue to work for the maximum possible degree of generosity to be shown toward HIPC countries. In fact, the combination of debt relief under the HIPC initiative and the additional relief offered by individual countries should lead to a two thirds reduction the overall debt of HIPC countries.
Another issue of concern is that off country representation at the institutions. I am in favour of a greater say for the emerging and poorer countries. There are a number of ways in which this might be achieved – for example, through board representation or enhanced involvement in decision making generally. In addition a vital aspect of the whole reform programme, and one which we fully support, is more consultation with the developing countries both at governmental and civil society level.
On the issue of transparency, Ireland has always been a supporter of greater transparency in the operations of the institutions. I am glad to say that this view is now prevailing and I welcome the extent to which progress has been made and will continue support further reforms in this area. In recent years both the bank and the fund have sought to improve their contacts with civil society groups and to increase the transparency of their own decision-making processes. This is particularly in evidence through the dramatic increase in documentation being released through the institutions web sites.
Finally, I am fully supportive of greater co-operation between the World Bank and the IMF. Both institutions are aware of the necessity for better co-operation and the need to rationalise their own operations and this is being addressed.
The trip to Africa early this year by Mr. Wolfensohn and Mr. Kohler honoured a commitment they made at the Fund-Bank annual meetings last year in Prague to put Africa at the centre of the activities and the agenda of both institutions. During their trip they met with African heads of state to listen to them about their vision of how Africa can accelerate growth, about their most serious development challenges and priorities and to look at ways that both the fund and the bank can lend support in furthering these objectives.
The staffs of the fund and bank will need to co-operate closely, focusing on their traditional areas of expertise in line with past agreements between the two institutions. Many areas will need to be shared between the two staffs, such as the establishment of an environment conducive to private sector growth, trade policy, financial sector development, and improvements in governance and transparency.
Equally, I see the need for co-operation between the Bretton Woods institutions and other multilateral institutions in development. This is being addressed, not least through the upcoming conference on Finance for Development which will involve, in addition to the Bretton Woods institutions, WTO and various UN bodies.
Ireland is working through the European Union and the boards of the Bretton Woods institutions in collaboration with our EU partners, to support a more open trade and development oriented view in relation to developing countries.