Transcript

Transcript -- African Views on Heavily Indebted Poor Countries (HIPCs), Enhanced Structural Adjustment Facility (ESAF) and Poverty Alleviation

September 24, 1999

We believe it is an interesting idea to give the floor to people concerned by these questions, and maybe before giving the floor to the room, I would like Mr. Barro Chambrier, ED for Africa, to offer some opening remarks. Thank you very much.

Mr. Barro Chambrier, you have the floor.

MR. BARRO CHAMBRIER: Thank you very much, Ms. Mboto Fouda.

Let me say that I'm very honored to have such a gathering for this very, very important event. As you know, these Annual Meetings are going to be very critical for the world economy. We are in our Executive Board focusing our attention to strengthen the architecture of the monetary and financial system, and the Fund is adjusting itself to have the best instrument to cope with the risk of the financial crisis. But there is also one very, very important issue to have really some of our low-income countries in the architecture of the world economy, and it is going to be very, very critical for us to solve the issue of the debt burden for the so-called highly indebted poor countries.

After the Cologne Summit, a framework was proposed, and the Fund and the World Bank have to work to have the modalities of implementing the framework, and now we have, I believe, something that is well thought that is going to link the poverty reduction with the need to really alleviate the debt burden of our countries.

So I am particularly delighted to introduce to you Economic and Finance Minister from Benin, Mr. Bio Tchane. I have Mr. Ngoran Niamen, who is the Minister of Finance for Cote d'Ivoire. And beside the Minister of Finance of Cote d'Ivoire, I have Minister of Planning and Development, Mr. Tidjane Thiam, who is also from Cote d'Ivoire. And on the extreme side of the left, I have Minister Bichara Cherif Daoussa, who is the Minister of Finance and Economy for Chad. And I'm sure that they will be pleased to brief you on their views with regard to this important matter, the issue of the debt burden and solution sought for its resolution in the context of the HIPC framework and, of course, its possible link with poverty reduction.

This is the very first time on such an important matter African Governors are expressing directly their views to stress the urgency of finding an original and innovative response to a growing impediment to growth and well-being of many Africans. I will not say more but, rather, give the floor to the Ministers, who will present you their thoughts and, I'm sure, respond to the questions you may raise.

Thank you.

MS. FOUDA: Now you may ask your questions. Yes?

MR. BUDDINGH: I'm Hans Buddingh from NRC Handelsblad, the Netherlands. I have a general question, in fact, to all the Ministers. Do you believe in globalization, and do you think that the poorest countries can really catch up with the richer countries? Because you see that the gap is growing and growing.

MS. FOUDA: I would like to make a suggestion. Ministers are also allowed to give their answers in French. We have translation. So if they feel more comfortable in French, they may use that language. Thank you.

[In French] Ministers, you're welcome to speak in French. The English interpretation is available.

MR. NIAMEN [Interpreted from French]: Well, thank you very much. I think the question that has been put is absolutely critical, the question being: Are you in favor of globalization? And if so, then one must observer that your countries are being more and more marginalized, more and more left on the sidelines, because the gap is widening. It is, as I say, a very important issue that you raise.

I don't think, frankly, by way of an answer, it is a question of being for or against globalization. Globalization is a fact. Globalization has been imposed on us. Globalization is marching on. The issue is how do we march with it or how will we be left behind. And that risk which you have pointed out in signaling the gap that is indeed widening between the richer countries and our own remains a very ardent concern. And, indeed, that is the main reason why we are with you today.

We are here to discuss this issue. We are here to tackle the very big problem you have raised. And we believe that given that our countries haven't the option but to move ahead, we must understand that we absolutely must participate in world trade and measures must be taken to that effect.

What are these measures? Well, we agree that the private sector must be developed, and you will have noted that in our various countries very bold, very courageous measures have been taken within the framework of structural adjustment programs. All of our countries are open economies. All of the countries whose Ministers are flanking me here are full-fledged and active members of the World Trade Organization. And we have not only looked abroad outside the confines of Africa for trade, we have indeed looked to ourselves. We have worked unceasingly to increase trade amongst us, to broaden markets where we are.

A further measure, naturally, has to do with alleviating the debt burden, and that becomes an imperative precisely in light of the need to fully participate in globalization. That will be impossible so long as the overhang remains as heavy as it is today.

I don't think there's any need here to rehearse what was said in Cologne, but an initiative, a very strong initiative on behalf of the poorest indebted countries was launched in order to cancel those debts. And we know also that within the HIPC Initiative the idea of broadening the scope of that initiative has been put forward. We have looked at burden sharing. We have looked at the various means which must be further analyzed in order to ensure that our countries have a fighting chance.

We are looking at this, of course, too, within the framework of the IMF, within the framework of the World Bank, and I know that as I speak, all of the necessary financing measures have not yet been perfected, have not yet been fully agreed upon.

The hope would be at the very least that we can stem the hemorrhage, that we can at least not continue to backslide, that we can at least mark a stop to this widening gap that you've mentioned and try to reverse the movement. And that naturally is something that will be occupying us greatly at this time.

It is all the more important in that the deeper issues that are involved are of the greatest import I think to mankind at large, certainly to our own peoples. It will be absolutely necessary that a decision be taken regarding the financing of these mechanisms.

I don't want to give you a specific figure. You know that within the framework of the Paris Club the figures are fairly well known. You know that as regards overseas development assistance we have talked about going even up to 90 percent, and indeed beyond 90 percent in some cases, in terms of the debt alleviation.

I know that some members of the IMF are in favor of selling gold in order to release funds for this financing. Discussions in the World Bank are not, as I say, yet finished. Neither are the debates within the African Development Bank. And neither are the decisions fully fleshed out in other development banks as well.

All of these institutions are as concerned as we are, and we being members of them, to see how best this financing to alleviate the debt burden can finally be put together.

The broad issue, of course, is and remains the overseas development assistance. It is the official development assistance that the public sectors in our countries are willing to lend. But this is a longstanding issue, I needn't remind you, and so it is a fair statement, as we have heard it often said, that there is such a phenomenon as debt fatigue. There is such a phenomenon as aid fatigue. And this makes it all the greater a challenge to make sure, to sum up again, that to reduce poverty and to ensure our place in the framework of world trade, that these issues be rallied round a renewed political will so that we can, in fact, do what needs to be done.

Basically this is what I had to contribute. I look forward to hearing my colleagues. Thank you.

MR. DAOUSSA [Interpreted from French]: Thank you very much. I would like myself to add some comments to the question of globalization: Are we for or are we against?

Well, I ask you: Is there a choice? I ask you: What is the alternative?

Therefore, I think that the question is best put in terms of how we move toward globalization, not whether but how. And to that end, I believe that it is important that the African countries themselves organize themselves in three different ways, as Minister Niamen has said.

First of all, we need to ensure that we have cleaned up our own houses, that we move towards market economies, that our financial house is in order, that we move resolutely toward a private sector, that we ensure that institutions and activities are more profit-worthy, that we reduce tariffs, and that we create a greater regional space in which our countries can grow in safer conditions.

I think that our countries are still too weak, our economies as a whole are still too weak to participate on a truly competitive basis on the global scene. And that's why we believe that it is a good thing to move toward regionalization of our markets through the various means we have available to us, the West African Monetary Union, through SADEC, through any number of other regional institutions with which you are familiar and which give us the opportunity to get stronger.

Everyone who is interested in e-trade is, of course, clearly cognizant of the fact that we don't have a chance in that regard at this point. And so let us catch up. I say let us give ourselves, say, six, seven, eight years to catch up, to bring down the tariffs, and to have a better opportunity to compete.

Thank you.

MR. BIO TCHANE [Interpreted from French]: Well, thank you very much. In turn, I would like to add, I think, a further dimension to what my two colleagues have already pointed out, and that is that we must remember, I believe, a very central point, and that is that Africa has not just now discovered that it needed to adjust and move ahead. Far from it. For a great number of years already, as you well know, African countries have been deeply engaged in very profound changes, and I think Minister Niamen rightly pointed this out a few minutes ago, and I can really echo his point regarding the very bold efforts that we have made for a number of years already to ensure that regional integration becomes a fact at home, that together we forge a regional market that will benefit us all. No one can go it alone. I think that is generally recognized.

A further point regarding globalization, it seems to me, is that for us Africans current development will allow us to gain time. It will allow us to speed up our pace of development in order to offset the years in which we were lagging behind if we can just count on the minimal critical mass necessary in terms of financing. And this again is what Minister Niamen rightly pointed out.

But not less important than that is the assurance we need to give our partners that the resources we are claiming are necessary to move toward globalization will be wisely and effectively used. And I think all of us who are, as I say, deeply engaged in very bold, very courageous programs of financial redressment and budgetary improvements and better governance, all of us, I say, understand fully that partners have a perfectly justified point when they wish to ensure that the funds made available, these rare resources, these scarce resources that we hope will be made available, will not be frittered away, will not be siphoned off, will, in fact, be targeted there where they need to be targeted, and we could not agree more.

I think it's also important to recognize in that context that where the funds have been ill-used--and, alas, there are instances of this sort of corruption--on the whole these instances, however well publicized, remain the minority of cases.

Let us not forget that we have an enormous percentage of our population that lives below the minimum threshold of poverty, and this silent majority, if I may put it in those terms, has no one to represent them if it is not we who raise their need to the global level to ensure that the necessary funds are freed up in order for these people, particularly those people, the poorest of the poor, to be assisted, as we all wish them to be.

Thank you.

MR. THIAM [Interpreted from French]: For my part, I would also like to add a grain of salt. We're talking about globalization. Let's be very clear. We're talking about globalization of trade, of the terms of trade, as understood by the World Trade Organization. And we understand that one of the main measures for this to occur, one of the main means by which this can take place and must take place is through the opening of the developed economies.

We need markets to which to export, and we know that the agricultural economies within the World Trade Organization lead by example, and yet what we see, alas, is that all too often the developed countries that are also commodity producers very often introduce measures that are, frankly, distorting the manufactured and non-manufactured goods.

We need "a level playing field" [in English], as Anglo-Saxons are fond of saying. But let us put our money where our mouth is. Let us lead by an example, as I say. Because, after all, the funds that would be made available for these very valid issues are going to be made available through taxpayers, the taxpayers of the countries that are in a position to liberate these funds, and, therefore, those taxpayers we all agreed are perfectly warranted in ensuring that transparency is taking place.

But that transparency should also obtain as regards the terms between the producers and the consumers. I think it is a perfectly transparent and logical proposition, is it not, that a produce of any commodity should be entitled to the fruits of his or her labor, and that a reasonable sum be finally remitted to that producer and not be detoured into other interests that are very real. But I think we need to look at the whole picture.

Thank you.

QUESTION: There's been a lot of criticism of the HIPC plan from Jubilee 2000, Oxfam, and other charities. And Jubilee 2000 have been calling for at least double the HIPC Initiative to totally forgive all debts. So my question is: Do you feel that all your debts should be forgiven, or do you believe that HIPC is enough?

And, secondly, there's been a lot of criticism about ESAF. All these charities say that the effect that ESAF has on your countries is to be overly fiscally restrictive at the expense of education and health and other social programs. So I guess we'd like to hear it from the horse's mouth. Is ESAF too restrictive, and would you like to see the end of it?

And sort of as a follow-up to that, would you feel more comfortable dealing on development issues with the World Bank instead of the IMF? And do you see the IMF as having a role in this issue?

MR. NIAMEN [Interpreted from French]: Well, thank you very much. I will aim to answer these, I think, very critical questions you've raised.

You have talked first about the HIPC Initiative, the question is whether or not it's looked at as a charity measure in order to eliminate all debt, as Jubilee, Oxfam, and others have suggested, the question of ESAF and the question of the development issues in one and another of the institutions.

Coming back to your first question, I think it's very important to put forward the fact that HIPC is not a request for charity. This is not a situation akin to having a beggar on the corner begging a few cents--"Brother, can you spare a dime?" sort of thing--in order to get by.

No, that's not the premise. The premise is the need to participate fully in development, the need to be in a position to set up policies that are quality policies, that are substantive policies, and for this to be so, the necessary resources, of course, must be available for it to be so.

Let me take the case of my own country by example, Cote d'Ivoire, within the last two decades, within the framework of 20 years. We have 320,000 square kilometers. We are not a huge country. We have more than one million tons of cocoa production. We are the number one cocoa-producing country in the world. And yet in 1978 or 1980, I'm not quite sure, there was, in fact, a cocoa war, what has been termed and known as a cocoa war.

I think that the broad trade issues that are being discussed today point clearly to what was happening and what does happen, that is, that the commodity prices have been pushed down. There has been a bear market for commodity prices that has, of course--which trend, of course, has greatly damaged our economies.

And, therefore, it is in that context that the debt overhang needs to be looked at, because in order to serve the debt, all monies would have to be diverted to that end, leaving virtually nothing, if anything at all, for the purpose of development. That is the ball and chain that the debt represents.

And so a choice needs to be made. Is it development or is it debt service when the issues seem to be an either/or proposition? But if we choose development, if we look at the necessary investments in health and education, then obviously you need to understand that words alone won't do it. You need the money to make it so.

Everybody knows that a healthy population and educated population will want to move ahead. No one wants to sit around begging. I think it's fair to say that everyone, every country, every individual, would prefer to stand with pride and move ahead on our own steam.

And so when we say we want to fight poverty and when we say we need to invest in education and in health, these are not hollow words. These are immensely substantive propositions.

Again, I think it's a basic premise that a healthy, a skilled population will take care of itself and make the question of aid more and more moot. That is our hope.

Now, on the question of ESAF, is it or is not too restrictive, and the question of the Fund's role, you know very well that the IMF is basically oriented toward tackling issues of the balance of payments. And we know that it is initially because of balance-of-payments inequalities and imbalances that ESAF was first structured. And the countries that have benefited from ESAF indeed were helped to redress the imbalances of the balance of payments and to invest better in development.

Development obviously is the cornerstone of the World Bank's efforts, and it isn't a question of one or another institution doing the whole job. The point is, of course, that they complement each other, that the institutions must work together.

We know that privatization is a sine qua non because, clearly, when the state ends up investing in what should be the private sector, obviously here again money is invested where others could invest and where the public monies should not be spent because there are so many other areas in which they essentially need to be spent.

So the point is on your question as to the Bank and the Fund and development, they complement each other. It isn't an either/or.

Thank you.

MR. BIO TCHANE [Interpreted from French]: I believe the question is: Do we prefer dealing with the Fund or do we prefer dealing with the Bank? Well, as you understand, we are all Governors on the Board of Governors of the IMF, so we would prefer to deal first with the IMF and deal where necessary with the World Bank. But we are IMF Governors. This is a statement of fact.

On the question of ESAF, let us not forget that the basic framework setting up the Enhanced Structural Adjustment Facility is a document, is an instrument that was, in fact, backed by both institutions. And the policy framework which is the bedrock of the ESAF program is also drawn up trilaterally among the country, the Bank, and the IMF, it being the country, of course, that naturally espouses that document and makes it its own.

But in looking in greater detail and I should say in hindsight at what ESAF has given us, I think it's a fair point to ask whether ESAF, in fact, has served us well. I think a number of analyses have been carried out with a view to answering that question here at the Fund itself, and I think it has clearly pointed out this exercise that indeed there have been a good number of pluses that ESAF has made possible.

By the same token, there have also been some minuses. There have also been some definite drawbacks, and these, too, have been recognized. And it is as a result of this overall analysis, retrospective review of ESAF, warts and all, that we are here looking at how a new or an improved instrument might be put together in order to offset the drawbacks of the ESAF, having recognized them, and in order to give us a stronger opportunity to work with a modality that would be stronger and better able to serve us at this time.

Now, as Minister Niamen has said, despite the fact that ESAF has been around and has been implemented, there have been slippages. There have been, as your colleague said earlier, unfortunately, too great a number of instances of a widening gap between the developed and the developing. And, indeed, even amongst the developed community you have a widening gap.

Certainly in our own countries, the gap is intolerable. When we are talking about 25 percent of the population in the poorest levels of society, including the truly indigent, the poorest of the poor, it is simply untenable to fail to do something resolutely, to do something more effectively, to resolve that ongoing problem.

You mentioned also the question of HIPC. You talked about the various initiatives and the question as to whether the various debt cancellation initiatives would be enough or whether the debt alleviation measures proposed will go far enough. Don't forget that the Africans frankly have been asking for a total cancellation of debt and for a long time. This is not new. This is not an original idea. We have been suggesting this for a good number of years.

Now, as Minister Niamen said, what we would hope at this point is that in the aftermath of the Cologne Summit we would at least have in the current thinking a means by which we could bring together the necessary elements to finally move to that end. He pointed out, and it is perfectly true, that the actual details of the financial package have not yet fully been worked out either here at the Fund or at the World Bank or, indeed, in other fora. And that's what everyone is about at the present time.

But I believe that we need to recognize the consensus that has emerged that the time has come to look at debt cancellation per se. The question really is becoming not so much, again, whether but how. And it is on the question of how that we are occupying our time and putting our heads together. How can the financial underpinnings of such an endeavor be assured?

My colleague, Minister Niamen, also mentioned--and I can only agree with him--that, of course, we would hope that greater levels of funds be freed up. Of course, we would hope that ESAF could be really revamped so that we could be able to truly tackle poverty. Our wish list is one thing. But reality is another.

We're not asking money to reward laziness. We are not asking to somehow subsidize laggardly activity. On the contrary, we're asking for the minimum necessary to do what we need to do.

Thank you.

MR. THIAM [Interpreted from French]: Thank you very much, and I would like to add a few comments to everything that has been said earlier.

You have raised a question with regard to our relationship with the Bretton Woods institutions. Actually, what is most important for us is ownership, and what is important for us is that the policies which are adopted and implemented be developed by us.

We want to stress ownership, and we have stressed this with the Bretton Woods institutions. And, actually, rather than raising the issue as to whether we prefer to work with the IMF or with the World Bank, we want to stress the fact that we want the policies that are adopted to be developed by ourselves and that our countries truly own these policies. They need to have been developed by the experts in the field, and I think that in that regard things have evolved in a very positive fashion in terms of our relationship with the Bretton Woods institutions.

In terms of the roles, I think that they're very clearly defined. For most of the technical development issues, the IMF and the World Bank have excellent coordination, but the World Bank is the leader in that area. Therefore, our technical discussions take place with the World Bank, and then there needs to be a consensus between the two institutions; whereas, for the financial and macroeconomic issues, we deal with the IMF, which is the leading institution in that regard. And, overall, I can say that things have been working out very well.

For us, and in conclusion, I would like to say that we insist on the fact that our point of view needs to be respected and taken into account. Therefore, we are then able to own the policies. And when we say that reforms are good enough, they need to be implemented by the government. However, if they're not good, then the government is going to oppose them.

Whereas, before, we had this cop-out. We used to say, oh, the Bretton Woods institutions have imposed this or that policy on us, whereas now the approach has changed. Through ownership, we are able to accept the full responsibility of policies that we implement. We cannot blame the Bretton Woods institutions for anything anymore. This was something that I wanted to do.

MR. DAOUSSA [Interpreted from French]: Very briefly, and also to complement what was said by my colleagues, I would like to first of all talk about the Bretton Wood institutions. While experience has shown that within the framework of our work with the Bank and the IMF, we see that there is excellent collaboration because we discuss issues together with the IMF and the World Bank. And so the donors have a collective approach in terms of the development of policies, and so to oppose the IMF to the Bank, I think that this would not be a reasonable approach.

Moreover, we have noticed that the IMF, which traditionally has supported the balance of payments, is now working in support of privatization which so far has been something that was done only by the World Bank.

In terms of ESAF, I would like to say that in Chad we have been implementing adjustment programs for three years, and now the results have been good. We have asked for the participation of civil society and unions and NGOs, but the fact is still that if we want to obtain results, more efforts have to be deployed because there is a matter of cutting salaries, and salaries have been cut for the past few years. And it's quite possible that the Africans are going to want to change this. But the fact is we also have to fight against corruption. And, overall, I must say that change has been very encouraging.

As I said earlier, we don't want hand-outs. We just want justice to be done. If we want for African countries to participate in the world economy, we have to unload the weight of debt. We have to cancel the debt overhang. So far, 40 percent of our GDP has been devoted to paying back our debt. We cannot at the same time develop and still carry this heavy burden. And you know that ever since the Toronto initiative to the Cologne initiative, a lot of efforts have been made. But only two countries have benefited from initiatives in Africa, Mozambique and Uganda.

You know, intentions are very good, but practice is another issue, and feasibility is something else. And so we have to make sure that African countries are able to participate in the world economy.

MS. FOUDA: Would you like to add something?

MR. BARRO CHAMBRIER: [Microphone off] There is a tremendous change in Africa if you compare the performance since 1994 to 1999, and even the projection for 2000, there is really something that is happening, and for the first time we have been able in Africa to improve the living standard of the people.

But as the Ministers have said, poverty is still widespread, and we need to go further and deeper so as to improve the situation. And here the Fund--and I want to pay tribute to the leadership of Michel Camdessus. The Fund has been able to adapt the ESAF, our facility, and really we are putting in place a new facility that will be more focused now on higher growth and on the need to eradicate the poverty in collaboration with the World Bank.

So we are taking steps to strengthen the collaboration between the IMF and the World Bank with a pilot project, and the World Bank will have the leadership for the design of the poverty alleviation framework, and the Fund will concentrate on the macroeconomic framework. But there is a direct link, and we have learned from the past experience that it is very critical to enhance the quality of the expenditure on the social side so as to improve the overall macroeconomic framework.

I want also to say that there will be in the framework of this new facility, the policy framework strategy will be replaced by the poverty reduction strategy papers that will allow the countries to have a strategy for the medium term. So this is really something very important, and we will insist, also this is a demand that is coming from Africa, on the ownership of the program. And the country will take an important place for the design of this framework, and this is something that is going to be critical.

Thank you.

MS. FOUDA: Yes, sir?

QUESTION [Interpreted from French]: I would like to come back to the issue of financing this program. This is a very important issue that we need to discuss today.

First of all, could you tell us the total amount of the financial means? And, second, do you know why there is a delay in the implementation of disbursements? And, third, are you concerned that, in fact, the funds could not be mobilized, or are you worried that maybe in the implementation of disbursement this could have some consequences at the economic level, or even geostrategic consequences or instability at the political level in Africa? I think that this is something that was mentioned in the commonwealth countries.

MS. FOUDA: Maybe, Mr. Niamen, would you like to take the floor?

MR. NIAMEN [Interpreted from French]: In terms of the numbers, I think that the ED is able to answer this question. The cost of the initiative is going to go from $12.5 billion to $25.7 billion, and as I said earlier, in terms of the creditors, there needs to be a share, an equitable burden sharing in terms of the initiative, in terms of the multilateral, bilateral, and commercial creditors. The contribution of the IMF would go from $1.2 billion to $2.3 billion. The contribution of the World Bank would go from $2.4 billion to $5.1 billion. And I think that the ADB is going to contribute $2.6 billion.

So you see that these are rather important numbers, and since these are concessional resources, well, actually, they are grants which are going to contribute to pay the debt. This is going to require a budgetary contribution.

First of all, in terms of the governments, these amounts need to be set, and then they need to be approved by the respective parliaments. And you know that these are very long processes.

Now, the goal that we have set for ourselves is this: we said that by the year 2000 we're going to implement this initiative. Initially we had said that we would give ourselves three years.

Now, if we want to speed things up, we have to be able to mobilize the resources, and we feel that the political will needs to be very present, and it's actually the political will that has allowed us to obtain the results that we welcome. And the political will has to always be present when we're talking about financial means.

The other concern that we had was this: we said, look, we're going to do this, and then it's going to be all over. Well, we cannot say, look, we're going to forgive the debt and that's it. The issue here is that the initiative needs to be broadened, and this is the matter of how to finance development. These are IDA problems. These are problems of the African Grant Facility.

So the issue is how to finance projects in the field. This is really where the rubber hits the road because we cannot just say that we're going to forgive the debt and then stop there. We're going to try and create some spreads in the budgets of the various countries which are then going to allow those countries to finance development programs.

And what we have to say is this: if we really want to fight poverty, we need to have growth. If we don't have economic growth, well, we're not going to be able to reduce poverty. And Mr. Barro Chambrier said this earlier. When you look at the World Economic Outlook and when you look at the performance of the African economies, we can say that our economic performances are pretty good because we have between 4 and 6 percent of GDP growth.

But we have to go beyond that because our colleague from Benin was saying earlier, when you look at our countries and you see how many people live below the poverty line, well, we're talking 25 to 30 percent. So if we want to reduce poverty, we have to have the necessary resources in order to implement the programs.

And so our concern is that we are going to start very important meetings here in Washington because major decisions will be made. But we have to be sure that the political will is present, and we also have to make sure that if we want to participate in the world economy, we need to promote privatization. But at the same time, development programs need to be implemented. And naturally we need to have resource flows to our countries.

Maybe my colleagues could develop these issues a little bit further.

MR. BIO TCHANE [Interpreted from French]: I would like to say that before Cologne, you saw a bidding war between the various countries with regard to the various initiatives. And so I think that Cologne was able to bring about a consensus between the various donor countries in order to make sure that the conditions for debt rescheduling would be improved.

And what we want now is for this consensus to be maintained. It shouldn't be herded away in the next few weeks. It has to lead the way to real implementation. And issues like burden sharing should not bring about a delay in implementation.

This is one of our main concerns, and you have also asked us why we're worried. Well, we are worried because if things get delayed at this point, we're not going to be able to really fight poverty. At this point we have growth. Like my colleagues have said, since 1994 we have growth rates between 5 and 6 percent. But experience has shown that this is not enough because, quite clearly, we don't have the necessary resources in order to deal with the most important poverty problems.

We have more and more poor people in our countries because the resources that are necessary to implement the programs which are targeting the poorest among the poor, well, these very resources are what we are lacking.

QUESTION: My question is, I'm still not clear from what you said what specifically you want changed in the modifications to HIPC that are on the Fund Website and came out in August. Could you just list them?

Thanks very much.

MS. FOUDA: Mr. Barro Chambrier?

MR. BARRO CHAMBRIER: Thank you very much.

I think that we have strengthened the HIPC Initiative. It means that we have faster debt relief, deeper debt relief, and more broad-based debt relief among those that are going to be eligible for the HIPC. So this has obviously an impact, a consequence in the cost of the initiative.

The purpose is to come at an earlier stage. Instead of having the two-stage approach, three years for the decision point and three more years for the completion point, we would have the minimum period of three years for the completion point and have the possibility of interim assistance. Otherwise, instead of focusing on the period, we will put the emphasis on the performance of each country that will be able to achieve the target that will be put in place in the social side, in the structural reform. These are those important critical reforms that can bring a higher growth rate so as to reduce poverty.

But I want to emphasize that it is critical at this stage to show our ability to deliver the initiative in its entirety, and this is a question of credibility. I know that at the time we are speaking Mr. Camdessus is chairing the meeting with the Executive Board to try to settle the financing gap for the Fund.

We have the same problem in the World Bank. There is still a financing gap. We have a problem with the ADB, as it was said by the Ministers, and it is really critical--and it is the credibility that is at stake. After the announcement of the initiative, it is really critical for us to have all the financial package solved for these Annual Meetings.

Thank you.

MS. FOUDA: I'll take one last question. Yes?

MR. NIAMEN [Interpreted from French]: I would like to follow up on what the ED just said. Actually, his reply was quite exhaustive, but you wanted to know what changes we wanted to see in the HIPC. Well, I would like to say that the HIPC Initiative is a good answer to our concerns, but if initiatives don't take place, well, nothing will happen. We're going to go to square one, and that is the main issue, because the former HIPC Initiative, while we were told that a program needed to exist for three years, and at the end of those three years, the decision would be made to have the debt canceled.

Now there is a floating system, so if you go fast enough, automatically you are eligible to have the debt reduced. And so that is the major point. That is the issue of financing. If no decision is taken now, then we're going to go to square one, and things will be very tough.

That was all I wanted to add.

MR. THIAM: [Microphone off] Our concern is that one issue has not been really resolved, which is some countries are saying, since the whole problem was created by the debt, you should not be allowed to go into debt again after HIPC. And we have a problem with that because then that would mean that we would live only based on grants, and you know the volume of grants is one-third or 20 percent of the volume available overall. So that would mean a shrinking, a reduction by two-thirds of the volume of aid, which would stifle any effort to make our economies grow. So that's another key issue for us.

MS. FOUDA: Very last question.

QUESTION: Just again on financing, the EU is now proposing to contribute to debt relief and the HIPC trust fund. But part of the money for this will come from the European Development Fund, and this is not actually surplus money. I mean, a lot of it has been allocated to ACP countries and projects, but not yet been disbursed.

So my question really is this seems to be a case of giving with one hand and taking away with the other. So my question to you is: This proposal is subject to ACP approval. How would you feel about this? And are you going to approve it?

Thank you.

MS. FOUDA: Mr. Thiam?

MR. THIAM: I think the answer is in your question.

MS. FOUDA: Thank you very much. I just have one mention to make. The conference will be on the record, and the embargo will be 15 minutes after the conclusion.

Thank you very much.