Joan Burton
Question:95 Ms Burton asked the Minister for Finance the steps taken by Ireland since 1999 to bring about changes to the IMF's poverty reduction and growth facility. [26208/02]
Written Answers. - Debt Relief.
The poverty reduction and growth facility, PRGF, of the IMF provides concessional financial assistance to low-income member countries. The facility supports economic programmes designed to foster durable growth, leading to higher living standards and reduced poverty in recipient countries.
PRGF-supported programmes are framed around a comprehensive nationally-owned poverty reduction strategy paper, PRSP, prepared by the borrowing government and based on a process involving the active participation of civil society, non-governmental organisations, donors and international institutions. These PRSPs are then endorsed in their respective areas of responsibility by the executive boards of the IMF and the World Bank as the basis for the institutions' concessional loans. At end November 2002, the reform programmes of 39 member countries were being supported by PRGF arrangements, with IMF commitments of almost SDR 4.6 billion – over $6 billion.
The PRGF/PRSP process is a new and complex process introduced only three years ago. In view of this, and given the difficulties arising from both human capacity and data constraints in the ben eficiary countries, it is still evolving. Nevertheless, it has to be recognised that progress is being made and that both the World Bank and IMF are working hard to accelerate it, in consultation with other parties and under the general direction of their respective executive boards.
To this end, the most recent IMF progress report, Poverty Reduction Strategy Papers – Progress in Implementation, which was issued in September 2002, highlights the following crucial elements: the institutionalisation of the participatory process and, in particular, the creation of an enabling legal framework for civic engagement in these countries. This is especially valuable in countries that have no tradition of engagement by civil society in the decision-making process; the integration of the PRSP/PRGF process with countries' annual budgets in a realistic macroeconomics framework. This includes the identification of sources of growth and the policies necessary to realise them; incorporating a poverty and social impact analysis in national poverty reduction strategy papers – the bank has developed a draft user guide to PSIA which sets out tools and approaches for staff and country practitioners in this area; improving monitoring and evaluation of results being achieved under PRSPs; implementing the principle that development partners, including the bank and fund, will align their support with the priorities laid out in the PRSP and deliver support more effectively; harmonisation of donor co-ordination efforts to reduce the administrative burden on recipient countries of working with donors; strengthening of countries' public expenditure management systems; and building up the skills and data capacity of countries so as to ensure effective preparation and implementation of PRSPs/PRGFs. In this context, it is to be noted that the World Bank has issued a good practices guide for PRSPs.
Through the executive director's office in the IMF Ireland participates fully in executive board discussions on these matters – and also on individual country cases that come before the board. The basic Irish position is that PRGFs must result in an identifiably increased spending on poverty reduction, that structures should be in place to monitor and verify poverty-targeted expenditure, and that civil society must be fully involved in the preparation of the PRSPs. Ireland has also strongly supported the streamlining of conditionality attaching to PRGF assistance.
I would like to point out that in July 2002 Ireland announced a commitment of €1.5 million over three years to the activities of Debt Relief International, a non-profit making organisation which helps developing countries manage their borrowing and their existing debts.
I would also refer the Deputy to the annual reports on Ireland's participation in the World Bank and the IMF.