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Annex A
2006 Annual Meetings of the International Monetary Fund and World Bank: UK OBJECTIVES FOR THE DEVELOPMENT COMMITTEE
The Annual Meetings of the IMF and World Bank will take place on 16 - 20 September 2006. The meetings will comprise the International Monetary and Financial Committee (IMFC) and the Development Committee (DC).
The Development Committee will discuss
· Strengthening Bank Group Engagement on Governance and Anticorruption · Strengthening the World Bank's Engagement with IBRD Partner Countries
In addition, Ministers are invited to comment on the following papers in their statements: An Investment Framework for Clean Energy and Development: A Progress Report; Progress Report for the Education Fast Track Initiative; Doha Development Agenda and Aid for Trade.
The Secretary of State for International Development and the Chancellor of the Exchequer will submit a joint written statement to the Development Committee setting out UK views.
Governance We look forward to discussing how the World Bank can strengthen its work in promoting good governance and in tackling corruption. We believe the Bank should help to build capable, accountable and responsive states that deliver services to the poor and tackle corruption effectively and firmly. The Bank will need to support countries in proposing and developing their own solutions to their distinct national challenges and help them deliver on their governance commitments.
Therefore, we will continue to call for the Bank to remain engaged with all its members, and will seek broad support for a comprehensive and credible plan for addressing governance and problems of corruption. The plan must ensure predictable, transparent, consistent and equitable treatment across member countries. It is important that the plan stresses the need to work with others, for example, the United Nations, the European Commission, bilateral development partners and civil society, who are better placed (and resourced) to take forward some elements of this work on governance. In particular, we believe that the Bank should emphasise such collaboration at the country and project level.
We believe that such an important strategy should reflect the broad consensus of the membership - it will not succeed without it.
Strengthening the World Bank's Engagement with IBRD Partner Countries The UK welcomes the Bank's paper on its engagement with Middle Income Countries (MICs). Despite their recent record of growth and poverty reduction, many MICs still face deep poverty, inequality and development challenges. Therefore, we welcome the paper's focus on these challenges for the Bank's work in MICs and that it highlights the need to respond to the important role MICs have in addressing Global Public Goods.
We will seek agreement on a Corporate Statement to anchor the Bank's future work in MICs around the poverty and development challenges MICs still face including: direct poverty reduction; pro-poor growth, enhanced stability (to prevent a slide back into poverty) and regional and global public goods.
We will call for the Bank to investigate new ways of being responsive to the diversity of MIC needs in order to achieve the MDGs, including greater partnership within the Bank Group and between the Bank and the private sector, other Multilateral Development Banks, donors and the MICs themselves. We will also encourage the Bank to consider how it can take a greater lead on global public goods, providing a convening forum for the International Financial Institutions and adopting an innovative approach to funding instruments.
An Investment Framework for Clean Energy and Development: A Progress Report Providing the poor with access to energy, whilst also tackling climate change is one of the greatest challenges facing the world today. Ensuring developing countries' access to affordable, reliable and clean energy will be critically important if we are to meet the Millennium Development Goals (MDGs). Meanwhile, the poor in developing countries are most vulnerable to the impacts of climate change, such as floods and droughts, often caused by the actions of countries thousands of miles away.
The UK welcomes the tripartite approach taken by the Bank on this issue and encourages the Bank to continue its work on developing an investment framework for clean energy and development in close collaboration with the private sector, other multilateral banks, development agencies and other interested parties. We will urge the Bank to make maximum use of existing financing instruments and to seek solutions where there are gaps. Successful implementation of this work will require energy policy reform in developing countries and international agreement on a long-term, stable, regulatory framework, with differentiated responsibilities, for emissions reductions.
We will seek a commitment to hold a discussion on climate change and clean energy at the Spring Meetings in 2007.
Progress Report for the Education Fast Track Initiative The FTI's internationally agreed framework helps countries to secure the additional financing they require. We appreciate the Bank's efforts in achieving this international credibility - we welcome this report and support its key messages.
More long-term financial support for education is needed. The UK Government will participate in an event at the Annual Meetings that seeks to secure more predictable financial assistance from donors in support of developing countries' long-term education plans.
Doha Development Agenda and Aid for Trade The UK continues to believe that there is no substitute for a successful outcome to the Doha Development Round that must include increased market access and significant reductions in trade-distorting subsidies. However, even in the absence of a Doha agreement we will seek to maintain momentum and support for Aid for Trade, build greater understanding of how Aid for Trade support will operate and build consensus on next steps. We welcome the recommendations of the Aid for Trade Task Force in Geneva, including a proposal to expand the coverage of Aid for Trade and to ensure assistance is in line with best practice development principles.
We will call for donors to deliver on their Aid for Trade commitments to contribute and promote additional assistance for poor countries to build their capacity to trade and secure its benefits. We will also urge the Bank to continue to strengthen its support for countries in this area, including through analysis of the potential poverty and social impacts of trade liberalisation.
Scaling Up Aid We must start now to discuss with developing country governments their priorities and our plans to support them with additional aid as it becomes available. We consider the Results and Resources Frameworks proposed by the Bank could be a key mechanism for scaling up at the country level, and that the Bank's leadership will be vital. We will push for a renewed joint commitment to use this mechanism in a growing number of countries and for the Bank to do more to encourage donors to work together to scale up their aid flows in ways that are more long-term and predictable. We will call for scaled-up aid to have a greater focus on under-aided countries, including fragile states, and for the commitment of longer term resources for service delivery, such as in education. We will urge donors to make further progress towards increasing their aid to 0.7% of their Gross National Incomes. We welcome the recent decision of the Bank to commit an additional $300m to IDA from its net income, and the IFC's decision to commit $150m.
Debt Debt repayments can be a crippling burden on the poorest countries and divert scarce resources away from efforts to tackle poverty. We warmly welcome the implementation of Multilateral Debt Relief Initiative (MDRI) from 1 July, and we continue to stress the importance of full, additional financing for the Bank's costs.
Debt relief frees resources for greater investment in programmes to achieve the MDGs. It is also vital that countries do not reaccumulate unsustainable debt. Therefore, we will urge the Bank to strengthen its efforts to build support of the Debt Sustainability Framework (DSF) and to stress its importance with both borrowers and creditors.
Conditionality We believe that countries should lead their own development and that conditions linked to aid should not be used to impose policies on governments. The World Bank's adoption of five good practice principles for conditionality last year was a good step forward, reaffirming their commitment to supporting country ownership and ensuring that conditions are appropriate. The Bank has recently reported on how it has implemented the principles. This notes efforts to train Bank staff and changes made to internal systems and guidance to incorporate the principles. The Bank also note some good examples of how the principles have resulted in better practice in-country. However, in our view, sustained efforts will be needed to ensure that the principles are consistently applied in all Bank programmes. We will re-emphasise to Bank management the importance we place on them delivering on their commitment to ensure the effective implementation of the principles.
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