Seminar on Foreign Aid and Macroeconomic Management

Maputo, Mozambique, March 14-15, 2005



Organized by the IMF Institute and African Department with co-financing from Internationale Weiterbildung und Entwicklung (InWEnt), Germany; and the Department for International Development (DFID), United Kingdom.

This seminar takes as given the objectives of aid—including the urgency of reducing poverty, the primary importance of disease alleviation, and the imminence of the millennium development goals—and focuses on the macroeconomic management of aid.

Aid flows are aimed at effecting a resource transfer so as to ease resource constraints on consumption and investment in the recipient countries and thus to help development. For both donors and macroeconomic policymakers in the aid-receiving countries these objectives raise a number of critical questions:

  • How can the effective absorption of aid be increased?

  • What are the short- and medium-term allocative implications of aid, and how can we ensure that these are largely positive or benign?

  • Does aid reduce or exacerbate volatility and how can we influence this?

  • How does aid interact with institutions and the political economy?

  • In what circumstances can concessional lending lead to debt problems and what considerations should govern the grants-versus-loans decision?

Questions of this nature are the principal concern of this seminar.

Seminar attendance is by invitation only. Queries regarding the seminar may be addressed to INSINFO@imf.org.

Preliminary Agenda
Last Updated: March 31, 2005

The analysis and opinions expressed in the seminar papers below are those of the authors and do not necessarily reflect the views of the IMF or IMF policy.

Monday, March 14

8:15-9:00

Registration

9:00-9:15

Opening Remarks
  Chair: Mr. Abdoulaye Bio-Tchané (Director, African Department, International Monetary Fund)

Speaker: H.E. Mrs. Luisa Dias Diogo (Prime Minister, Republic of Mozambique)

9:15-12:30

 Session I: Aid, Growth, and Poverty Reduction: What Should Aid Be Trying To Achieve? How Good Is The Record?

Chair: Mr. Peter Heller (Deputy Director, Fiscal Affairs Department, International Monetary Fund)

Paper on Aid and Growth: Mr. Steven Radelet (Senior Fellow, Center for Global Development)
 

Paper on Aid and Poverty Alleviation: Mr. Aart Kraay (Senior Economist, Development Research Group, World Bank)
 

Coffee break
 

Discussant: Mr. Arvind Subramanian (Division Chief, Research Department, International Monetary Fund)
 

General Discussion
 

Chairman's Summing Up

12:30-2:00

 Lunch
 

Speaker: Ms. Gudrun Kochendörfer-Lucius (Managing Director, Internationale Weiterbildung und Entwicklung (InWEnt), Germany)

2:15-5:00

 Session II: Aid Absorption: Recognizing and Avoiding Macroeconomic Hazards
 

Chair: Mr. Anupam Basu (Deputy Director, African Department, International Monetary Fund)
 

Analytical Overview Paper: Prof. David Bevan (Fellow of St John's College, and Research Associate, Centre for the Study of African Economies, University of Oxford)
  Case Study: Mr. Andy Berg (Division Chief, Policy Development and Review Department, International Monetary Fund)

 

Case Study: Mr. Mark Sundberg (Lead Economist, Development Policy, World Bank)
 

Coffee break
  Discussant: Mr. Alan Gelb (Director, Development Policy, World Bank)

 

General Discussion
 

Chairman's Summing Up

7:00-10:00

 Dinner
  Speaker: H.E. Prof. Charles Soludo (Governor, Central Bank of Nigeria)

Tuesday, March 15

9:00-10:00

 Session III: Exogenous Inflows and Real Exchange Rates: Theoretical Quirk or Empirical Reality?
 

Chair: Prof. T. N. Srinivasan (Samuel C. Park, Jr. Professor of Economics, Yale University)
 

Paper: Prof. Christopher Adam (Research Associate, Centre for the Study of African Economies, and University Lecturer in Development Economics, Fellow of St Cross College, University of Oxford)
 

General Discussion
 

Chairman's Comment and Summing Up
10:00-10:15

Coffee break

10:15-11:15

 Session IV: Aid, Volatility and Stabilization Policy. Does Aid Smooth Absorption or Exacerbate Shocks: Reliability and Counter-Cyclicality

 

Chair: Ms. Catherine Pattillo (Senior Economist, African Department, International Monetary Fund)
 

Paper: Mr. Ales Bulir (Senior Economist, Policy Development and Review Department, International Monetary Fund)
 

General Discussion
 

Chairwoman's Comment and Summing Up

11:15-12:30

 Session V: Aid, Debt, and Fiscal Policy
 

Chair: Ms. Nancy Birdsall (President, Center for Global Development)
   
  Paper: Mr. Andy Berg (Division Chief, Policy Development and Review Department, International Monetary Fund) and Mr. Bikas Joshi (Economist, Policy Development and Review Department, International Monetary Fund)
 

General Discussion
 

Chairwoman's Comment and Summing Up

12:30-2:00

 Lunch
 

Speaker: H.E. Mr. Donald Kaberuka (Minister of Finance and Economic Planning, Rwanda)

2:15-3:15

 Session VI: Aid, Governance, and the Political Economy
 

Chair: Mr. Paul Isenman (Head, Development Policy Division, Development Cooperation Directorate, Organization for Economic Cooperation and Development)
 

Paper: Mr. Arvind Subramanian (Division Chief, Research Department, International Monetary Fund) and Mr. Simon Johnson (Assistant Director, Research Department, International Monetary Fund)
 

General Discussion
 

Chairman's Comment and Summing Up
3:15-3:00

Coffee break

3:30-5:00

 Session VII: Roundtable Discussion
 

Chair: Mr. Leslie Lipschitz (Director, IMF Institute, International Monetary Fund)
 

Panelists:

 

H.E. Mr. Goodall Gondwe (Minister of Finance, Malawi)
 

Mr. Peter Grant (Director, Europe, Trade and International Financial Institutions Division, Department for International Development (DFID), United Kingdom)
 

H.E. Prof. Charles Soludo (Governor, Central Bank of Nigeria)
  Prof. T.N. Srinivasan (Samuel C. Park, Jr. Professor of Economics, Yale University)
 

General Discussion
 

Chairman's Summing Up