Supplementary memorandum submitted by
the Department for International Development
FURTHER INFORMATION FOLLOWING THE IDC HEARING
OF 18 OCTOBER 2005
1. POVERTY AND
SOCIAL IMPACT
ANALYSIS (PSIA)
John Battle asked about the effectiveness of
PSIA as a tool.
Poverty and Social Impact Analysis (PSIA) is
a multi-disciplinary approach to understanding the impacts of
policy reforms on poor and vulnerable people. The World Bank now
uses PSIAs to inform the design of its programmes. PSIA is most
appropriate for looking at specific reforms such as the devaluation
of a country's exchange rate. It is difficult to use at a broader
level, such as setting the level of budget deficit, as this is
a result of many policy choices.
Poverty Reduction Strategies (PRS) are wide-ranging,
making them too complex, with current skills, to carry out detailed
PSIAs. However, PSIAs are used to inform policy areas identified
in the PRS or other national growth and development strategies.
The PSIA Network, convened by DFID, and comprised
of donors, civil society organizations and developing countries
promotes PSIA as a due diligence tool for donors and strongly
encourages country participation. Members also advocate that Governments
commission and undertake PSIAs to inform their policy choices.
The network is working to broaden the skills needed for this to
take place, while sharing lessons on results from PSIA analysis,
and how to undertake them more effectively.
The PSIA approach is still a new tool, which
means it is difficult to assess its impact. However, evidence
shows that PSIAs are increasing understanding and changing proposed
policies. For example, a PSIA of Ugandan agricultural export promotion
showed that many women would not benefit and were actually likely
to spend less time producing food for their own families. In this
case the PSIA ensured that the wellbeing of the family was taken
into account. Also, proposed land reforms in Zambia were dropped
after the PSIA showed that the reforms where likely to be more
detrimental compared to the existing traditional system.
2. HIV/AIDS
Jeremy Hunt asked whether DFID was considering
setting intermediate targets leading up to the goal of achieving
universal access to antiviral drugs by 2010, and whether the Secretary
of State would be able to publish this before World AIDS Day on
1 December.
UNAIDS are currently in the process of establishing
a Global Steering Committee who will decide whether intermediate
targets will be set. The UK will co-chair this alongside UNAIDS.
It is expected that the committee will report to the UN General
Assembly special session on HIV/AIDS in 2006.
3. HEAVILY INDEBTED
POOR COUNTRIES
(HIPC) DEBT RELIEF
The Secretary of State offered to send the committee
a list of the countries that are now potentially eligible for
HIPC. This is following the agreement to extend the sunset clause.
The IMF and World Bank have stated that several
more countries will be considered for the exceptional debt relief
under HIPC[3].
This is a result of the extended `Sunset Clause' which now gives
countries until the end of 2006 to meet the criteria for being
considered under HIPC—an extension that the UK was instrumental
in lobbying for. The table below summarises the countries that
may be eligible; a final list is expected in early 2006.
| Countries previously identified as eligible for HIPC
|
| Central African Republic | Lao PDR
| Somalia |
| Comoros | Liberia | Sudan
|
| Cote d'Ivoire | Republic of Congo
| Togo |
| New countries potentially eligible for HIPC
|
| Eritrea | Kyrgyz Republic |
Nepal |
| Haiti | |
|
| Countries for which IMF/World Bank are collecting further data
|
| Bangladesh | Myanmar | Tonga
|
| Bhutan | Sri Lanka |
|
| | |
The latest information on implementation of the initiative
is contained in the 19 August 2005 joint IMF/World Bank paper
"Heavily Indebted Poor Countries Initiative—Status
of Implementation". This is available on the World Bank website
at:
http://siteresources.worldbank.org/INTDEBTDEPT/ProgressReports/20659519/081905.pdf
4. DFID GUIDELINES ON
CONDITIONALITY
The Secretary of State offered to consult the committee on
DFID's new internal guidance on the use of conditionality.
The guidelines are still under consideration but will be
ready to share externally very soon. A copy will be sent to the
committee shortly and we would welcome any comments they wish
to make.
November 2005
3
The established criteria are (i) to be IDA-only and PRGF eligible;
(ii) to have debt indicators in excess of the agreed HIPC thresholds
based on end-2004 data, and (iii) to have started an IMF and IDA
supported programme. Back
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