Dáil Éireann díospóireacht -
Tuesday, 5 Dec 2000

Vol. 527 No. 3

Written Answers. - Enhanced Structural Adjustment Facility.

Michael D. Higgins

Ceist:

197 Mr. M. Higgins asked the Minister for Finance his views on Ireland's contribution to the IMF's Enhanced Structural Adjustment Programme in view of the concerns and reservations expressed in many quarters; and if he will make a statement on the matter. [28171/00]

Minister for Finance (Mr. McCreevy)

The Bretton Woods (Amendment) Act was passed early in 1999. In the course of its passage I made the point that the IMF, in response to criticism, was moving in the direction of taking account of the social implications for individual developing countries of the macro-economic policies it was prescribing, or endorsing. At the time I undertook to bring the views of the Irish Legislature to the attention of the fund and to monitor the development of the trend referred to above.

The proceedings of this House, in relation to our ESAF contribution, were brought to the attention of the fund through our executive director and I am pleased to say that a new poverty-focused approach by both the IMF and the World Bank was adopted at the annual meetings in the autumn of 1999.

This approach requires the preparation of a poverty reduction strategy paper, by the Government of the country concerned. The PRSP is intended to incorporate an agreed anti-poverty strategy, adopted in a participatory process involving civil society and the development partners. It should thus foster ownership of the programme on the part of the developing countries. The resultant PRGF-supported programme should therefore be consistent with a comprehensive framework for macro-economic, structural and social policies to foster growth and reduce poverty.

While it still remains to be seen how successful this approach proves in practice, it represents a significant step for the fund which has now explicitly acknowledged that "social and sectoral programmes aimed at poverty reduction will be taken fully into account in the design of economic policies for promoting faster sustainable growth."

While not claiming that this was as a result of Irish pressure alone, we did add our voice to the emerging criticisms of ESAF and calls for its reform. It has been restructured into the poverty reduction growth facility, and is more poverty oriented in that it takes more account of the concerns of the programme countries.