Brown: I would like to take you through both the joint meeting of the Interim and Development Committees this morning and the Interim Committee meeting that has just finished. I believe that the joint committee meeting we had symbolized the cooperation and commitment of all countries and institutions to the enhanced debt-relief initiative, which will provide faster, deeper, and broader debt relief, with the central goal of reducing poverty in the world’s poorest countries.
As noted in our communiqué [see page 317], we discussed global economic and financial conditions, and we welcomed the marked improvement since the beginning of the year. Among the major industrial countries, a sustained pickup in Europe and Japan will help to achieve a more balanced pattern of growth. We emphasized the importance of open and competitive markets as a key component of efforts to sustain growth and stability in the global economy. We believe the launch of the new trade negotiations in Seattle later this year is an opportunity to make further progress in this direction. Indeed, we encouraged the IMF to work with the World Bank and the World Trade Organization to strengthen the programs of work to achieve better global policymaking.
We have adopted, as part of our reforms of the international financial architecture, the new Code on Monetary and Financial Policies, and we are urging all members to implement this code as well as the previously agreed code on fiscal transparency. We have discussed the efforts to involve the private sector in crisis resolution and we welcomed the progress achieved in securing the involvement of the private sector in individual cases; we are going to continue to do further work to see if agreed principles can be found. As part of the changes in the financial architecture, the Interim Committee has been put on a permanent basis and will now be called the International Monetary and Financial Committee.
The joint meeting this morning made progress in three very important areas: first, moving forward on the reforms to deliver faster, deeper, and wider debt relief; second, strengthening the focus on poverty reduction; and third, making progress in the financing arrangements that will allow the enhanced Heavily Indebted Poor Countries (HIPC) Initiative to start after these Annual Meetings without having to wait months or years.
I am grateful, as was the whole committee, for the work of Michel Camdessus and James Wolfensohn in making possible this progress. We endorsed the enhancement to the HIPC Initiative for those countries committed to change. We stressed the need to ensure that debt relief will result in poverty reduction. We endorsed the new framework for antipoverty and growth strategies that has been proposed by the Bank and the IMF. We believe that much progress will now be made in the cooperative effort to achieve growth-related poverty-reduction programs for the poorest countries. We stressed the need to put in place macro-economic, structural, and social policies that will generate growth and contribute to long-term poverty reduction.
On the financing of the HIPC Initiative, and now the enhanced HIPC Initiative, the Interim Committee has endorsed the decision of the IMF for off-market transactions of up to 14 million ounces of gold to allow the IMF to fund its contribution to the enhanced framework. We have urged the speedy implementation of the enhanced initiative, so that as many countries as possible would qualify for assistance by the year 2000. The Interim Committee and the Development Committee have also heard of the work being done to fund the African Development Bank, the Inter-American Development Bank, and, of course, the World Bank itself in meeting its commitments to the HIPC Initiative.
We learned that additional sums of money have been deposited into the World Bank HIPC Trust Fund by member countries, which is in addition to announcements made by the United States, Germany, and the European Development Fund over the past few days. We now have a credible initiative that can begin producing debt relief for the countries that need it—now, and not in years or months.
At this historic meeting, those to whom the world’s greatest wealth has been given have joined with those burdened by the world’s greatest debt and destitution to form a new and worldwide alliance against poverty, so that in the new century all peoples in all countries will have a chance to build a better future. Not only have we made significant progress today, but we have taken decisive action that will enable the debt relief we have proposed over the past year to be financed and to happen.
Question:What is the size of the shortfall of pledges to the Trust Fund for the full implementation of the enhanced HIPC for the first 12 months and beyond?
Brown: As you know, the IMF has made proposals, which were accepted by the Interim Committee, about how it plans to finance its part of the debt initiative. We heard from Mr. Wolfensohn this morning about how the World Bank plans to finance this debt relief and how he wants to enhance the HIPC Trust Fund so that it can help not just the World Bank but the African Development Bank and other development banks.
Before last week, $550 million had been pledged to the HIPC Trust Fund. As a result of decisions made by many countries over the past week, the funding of the Trust Fund is now rising toward $2.5 billion. In addition to the $171 million it has already contributed, the United Kingdom announced today that it would contribute an additional $50 million. Other countries have made further announcements. So, the situation has moved considerably from where it was last week. The key question is, Can the debt relief start under the enhanced initiative for those countries that are ready and need it now? The answer is yes, that can happen.
Camdessus: I would like to call your attention to the referendum we had on our efforts to introduce the fight against poverty into our programs. We asked our 182 members—the big majority of them developing countries—to contribute to HIPC and to make permanent the new instrument that will be the successor to the Enhanced Structural Adjustment Facility. The results of the referendum are the following: more that 90 countries have agreed to contribute amounts in proportion to their quota shares in the IMF capital base. Among these countries, 54 are developing countries and 10 are transition economies. Among them are countries that have been supported by ESAF programs or are currently under programs of this kind and believe that these programs have done so much good for them that they have pledged some of their own money to allow other countries to benefit from the same support.
Question:What progress has been made in involving the private sector in crisis resolution in individual cases?
Brown: We will look at several instances of private sector involvement in crisis resolution and see if there are general rules that can be applied in the future. I think the debate has moved over the past year from ad hoc responses that individual countries and institutions had to make to situations in individual countries to a recognition that although there is no one-size-fits-all approach, we can have a more orderly process based on general principles and a general framework that people will accept.
Camdessus: I totally agree with the Chairman. We are gaining experience daily in this domain, and we will try to extract principles from this experience and define instruments for action. We expect to have taken further steps by the time of the April meetings.
Question:You mentioned the U.K. contribution that had been announced today. Could you walk us through other contributions that have come in, say, in the past 24 hours?
Brown: I am not in a position to make announcements for individual countries. Cumulatively, if these pledges are met, this is how the figure adds up. These are significant sums of additional money—money that had not been pledged before. In some cases, this is money that is now being brought forward as a result of our looking at what needs to be done and as a result of people being prepared to play their part.
I can also say it is not just one or two countries; it is many countries that have decided that this is the opportunity to make a decisive break with the past, to move the HIPC Initiative forward to a new enhanced initiative and to release the funds that are necessary for the multilateral institutions to play their part.
I would emphasize Michel Camdessus’s point. What we are talking about today is how we can build a virtuous circle of relief, poverty reduction, and economic development. The new proposals from both the IMF and the Bank to work together on the antipoverty and growth strategies are an important part of this process. I think people will look back at this meeting and see not only the historic decisions on debt relief as we approach the millennium but also the decisions to set up these new initiatives—the antipoverty and growth programs—as marking a very important step forward, which will mean improvement and hope in countries hit by unfavorable economic circumstances and hit by poverty.