Written Answers. - Role of IMF and World Bank.
Proinsias De Rossa
Ceist:
36
Proinsias De Rossa
asked the
Minister for Finance
if his attention has been drawn to recent strong criticism of the role of the World Bank and the International Monetary Fund and particularly to suggestions that their policies were leading to further deprivation and marginalistion of hundreds of millions of people in developing countries; if he will request the Irish representatives on these bodies to press for a change of policy direction to assist developing countries to better cope with the problems of poverty and deprivation; and if he will make a statement on the matter.
[1589/94]
Nora Owen
Ceist:
39
Mrs. Owen
asked the
Minister for Finance
the proposals, if any, he put forward on Ireland's behalf at the IMF/World Bank 1994 Annual General Meeting to tackle the debt burdens of many African countries; and if he advocated the selling of a 10 per cent portion of the IMF's gold reserve to write off Africa's debts.
[1220/94]
I propose to answer Questions Nos. 36 and 39 together.
I am well aware of recent criticisms of the role of the Bretton Wood institutions. In fact, before attending the recent annual meetings of the institutions I met members of Irish non-government organisations and heard their criticisms first hand. Indeed, I have met the NGOs on several occasions in the last 12 months and am well aware of their concerns. I am concerned myself at the negative view of the role played by the Bretton Wood institutions which is held by the voluntary development agencies.
I see two issues here. There is clearly a problem of perception but there is also the issue of the impact on developing countries of the operations of the organisations in question.
In the first place, there is a need to reverse negative perceptions. Both institutions need to improve their liaison with NGOs, internally and internationally. Closer co-operation would not only increase transparency and local participation but would also ensure more effective action on the ground to help the billion people worldwide who are living in poverty.
Indeed, the institutions themselves accept that previous programmes have not always served the needs of the poor. I have heard some highly critical comments concerning the impact of the institutions' activities on the poorest people in the developing world. There is a need to address that situation in a meaningful way. There has been a welcome willingness of late on the part of the multilateral organisation to learn from past experience and from their interaction with their clients, their shareholders and other organisations active in development, including the NGOs. For instance, in pursuit of its over-riding objective of poverty reduction, the World Bank is devoting more of its lending to education, health and social development. In this process, and indeed, in all its lending operations, it is putting particular emphasis on borrower ownership of projects and on the participation of stake-holders in development initiatives which affect them. Moreover, the Bank has responded to criticism of its lack of transparency by making available to the public many documents which heretofore had been confidential and by setting up an independent inspection panel to investigate public complaints about its operations.
I feel strongly that the structural adjustment process must put people first while still getting the required reforms. Basic human needs to be paramount with local people participating fully in the process of designing and implementing projects and programmes. Access by all to basic health care and primary education must be ensured along with proper protection for the most vulnerable and marginal groups. There has also to be a thorough evaluation of the actual effectiveness of such provisions in promoting human well-being. At the same time, I appreciate the importance of building a development strategy on sound and stable macroeconomic policy.
Poverty reduction remains the benchmark for measuring the performance of the World Bank. The Bank's fundamental objective is to support the reduction of poverty in its member countries. I welcome the targeting of programmes at poverty relief and the explicit commitment to ensure access to health and education, promote the role of women in development and provide effective, comprehensive and carefully monitored social safety nets.
The Irish representatives in the institutions are well aware of my views. They have supported the changes being made by the institutions to make their activities more effective and also helping the developing countries cope better with the problems of poverty and deprivation.
Turning to the debt question, I addressed the joint annual meeting of the International Monetary Fund and the World Bank on Tuesday, 4 October 1994, in my capacity as Governor for Ireland. I drew attention to the ongoing problem of debt in the developing world. I referred to my call last year for the implementation of the Trinidad terms for Africa and other poor developing countries. These terms involve, among other things, the write-off of two thirds of the debt of the low income developing countries. They do not cover debt owed by these countries to the multilateral institutions such as the World Bank, IMF and the Regional Developments Banks. Progress has been made on this issue in the last number of months, but I, nevertheless, stated at this year's meeting that there is now a need to press on beyond the Trinidad terms.
I told the annual meeting that as the problems of bilateral public and private debt became more manageable attention was now focusing more on the remaining indebtedness to multilateral institutions. It is clear to me that the measures taken up to now do not go far enough in addressing the debt problems of the most severely indebted poorest countries, especially in Africa. At a minimum, I consider that there needs to be a further major increase in concessional financing to countries within this group which are making serious efforts to develop their economies yet still find themselves caught in a debt trap.
Both governments and non-government organisations are calling for further initiatives in this area, including the sale of gold reserves. I said at the meeting that I would be happy to support measures which would help the poorest and maintain the effectiveness of the institutions in the development process.
