A. Commissioner
Poul Nielson's statement on the two implementation reviews of the Enhanced
Initiative for Heavily Indebted Poor Countries and the Poverty Reduction
Strategy Papers delivered at the IMF/World Bank Annual Meeting in Prague,
September 2000
In my two letters to Michel Camdessus and Sven Sandström in March
2000, I had the opportunity to welcome strongly the new approach of the
Bretton Woods Institutions and our support for the Poverty Reduction Strategy
process. I also welcomed the opportunity for the EC to be involved in
this process, both at headquarters and field level. Since that time, in
parallel with regular consultation between the IMF, WB, EC and other donors,
the Commission has taken some important decisions:
·
on HIPC, over €1 billion was committed: to support the EC's involvement
as a creditor (€ 349 million) and to support the initiative as a
donor (€ 680 million for ACP countries and €54 million for Latin
American and Asian countries). Furthermore, more than €300 million
were disbursed this summer to the Trust Fund;
· guidelines were sent to all ACP delegations to improve and focus
on key points of EC involvement in the PRSP process. All our budget/ structural
adjustment support to ACP countries involved in the PRSP process has been
linked to it. Lastly, I decided that the 9 EDF programming exercise, which
will follow the signature of the Cotonou agreement, would be embedded
in the overall strategy for growth and poverty reduction developed by
these countries.
The EC calls on other donors to also make their pledges available quickly
so that the new enhanced HIPC framework can be implemented without delay.
I congratulate the IMF and the World Bank for the clarity and honesty
of the two reviews of the implementation of HIPC and PRSP which were discussed
on 5 September by the Boards. While these documents give a clear picture
of where we are, they do not fail pointing out the difficulties.
The situation regarding the transparency of the process, and the involvement
of civil society and other donors, has differed widely from one country
to another. In a large number of cases there are still important weaknesses
in the process.
EC involvement in the process will be oriented towards ensuring that PRSPs
lead to important changes in the partnership with developing countries,
following the Comprehensive Development Framework principles which we
share:
§ a long-term vision and strategy;
§ enhanced country ownership of development goals and actions;
§ more strategic partnership among stakeholders; and
§ accountability for development results.
I should first like to address the question of excessive pressure on the
elaboration of the full PRSP. While speed in preparing the interim PRSPs
is understandable, to allow countries to meet the decision deadlines and
benefit from HIPC debt relief, time must be allowed to the countries to
elaborate their full PRSPs. Time is necessary to facilitate a real participatory
process, and to allow countries to elaborate new policies which can have
a real impact on poverty reduction. Time must also be given to building
monitoring capacity, identifying pertinent result-oriented indicators,
and to addressing the question of improving management of public resources.
Capacity building is essential for the success of these fundamental changes. The EC stands ready to provide support to countries in these key areas, in collaboration with other donors.
Clarification and improvements have still to be sought on the question of conditionalities. The EC favours a more result-oriented conditionality, which gives more flexibility to countries in the choice of their policies.
Finally, illumination is needed on the issue of monitoring the implementation of the PRSP, following endorsement of the full PRSP. Mechanisms have to be found to ensure institutionalisation of this monitoring and transparency of the annual reviews. The involvement of civil society, stakeholders and donors in this review process will be essential. Improvements in informing key partners who are not represented at the Boards is a challenge which has also to be addressed.