Joint effort needed to achieve goals: Sinha

By Sridhar Krishnaswami

WASHINGTON, APRIL 30. The international development goals cannot be achieved unless the developed and developing countries work together; and the Bretton Woods institutions have an important role to play in this regard. ``The need for a cooperative effort cannot be overemphasised,'' the Finance Minister, Mr. Yashwant Sinha, said.

In a statement to a joint meeting of the International Monetary and Financial Committee and the Development Committee, Mr. Sinha said from India's long experience in the fight against poverty, the battle was not going to be short. ``Nor is it going to be won by being dogmatic and prescriptive. Low income countries have the responsibility to implement sound policies... while the developed countries should open up their markets while simultaneously increasing aid volumes.''

The Minister also said the challenge of development could not be overcome by poor nations in the fast globalising world without being helped by bilateral donors and multilateral agencies. ``We, therefore, support the move by both the institutions (the World Bank and the IMF) to strengthen the twin pillar strategy as a part of this challenging endeavour.''

Mr. Sinha said he was not quite comfortable with the explicit linkage between all concessional lending and the preparation of the poverty reduction strategy paper (PRSP) - that while it may be necessary for the heavily indebted poor countries in light of their special circumstances, the unconvincing part comes from the need for blanket application of this process for all lending to low income countries.

``In our opinion, the views of a democratically elected government, accountable to its citizens, should form the basis of its PRSP and the nature and modalities of the consultation process should be left to the national authorities,'' Mr. Sinha argued. As far as the HIPCs were concerned, he said the development committee was strongly supportive of the efforts for cohesiveness in the approach of donors and therefore dully supportive of the call for ``aligning aid fully with country-led poverty reduction strategies''.

On the subject of development assistance, Mr. Sinha said developed nations must agree to increase their level of overseas development assistance (ODA) flows which had decreased to around 0.24 per cent of the GNP in the 1990s, well below the 0.33 per cent maintained in the 1970s and 1980s. International institutions and the donor community could jointly support the creation of a fund to support the provision of global public goods, especially in the areas of public health and technology transfer.

A communique issued at the end of the special meeting said the session focussed on the progress in strengthening the partnership of the Bank and the IMF ``in fighting poverty and strengthening growth in the world's poorest countries''.

It paid considerable attention to Africa, said Mr. Sinha - who was one of the participants at a joint press conference. The meeting had very important inputs and received very valuable insight from the World Bank president, Mr. James Wolfensohn, and the IMF managing director, Mr. Horst Kohler.

``We recognise that the strong action by African leaders to face their own responsibilities needs to be complemented by strong support from the international community to achieve the international development goals and we are prepared to work to provide that support,'' the communique said.

It also made the point that the broader fight against poverty required a ``two pillar strategy''. First, poor countries must take charge of their own future and create opportunities for equitable and sustainable growth and poverty reduction by improving their performance with respect to macro-economic management.

Secondly, the international community must provide strong support not merely through existing commitments for debt relief, but also through increased aid and expanded opportunities for trade. ``The heavily indebted poor countries (HIPC) debt relief should be additional to official development assistance which should be provided on appropriately concessional or grant terms.''

The communique reaffirmed the importance of greater access for developing countries to world markets and called on developed countries to further open their markets to exports from the poorest countries. ``The industrial countries have a major role to play by following policies that ensure sustainable, non- inflationary growth for the world economy.''

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