DEVELOPMENT COMMITTEE
INTERIM COMMITTEE
JOINT MEETING OF THE INTERIM AND DEVELOPMENT COMMITTEES
SUNDAY, SEPTEMBER 26, 1999
JOINT STATEMENT BY CO-CHAIRMEN
Heavily Indebted Poor Countries Initiative (HIPC) and Enhanced Poverty Focus of IDA and IMF Concessional Programs
1. Ministers of the Development and Interim Committees met jointly for the first time this morning to discuss the
enhancement of the HIPC Initiative which will provide faster, broader and deeper debt relief with the central goal of
reducing poverty in the poorest countries in the world. This joint meeting symbolizes the cooperation and high political
commitment of all countries and institutions in this effort, and the new closer relationship between the Bank and Fund
which will be crucial in achieving this goal.
2. We focussed on three main areas: first, the reforms required to deliver deeper, broader and faster debt relief;
second, strengthening the focus on poverty reduction in Bank and Fund programs; and third, an overview of the financing
arrangements that will allow the enhanced HIPC Initiative to start after these Annual Meetings.
3. We endorsed the enhancements and reforms to the HIPC Initiative for those countries pursuing sound policies and
committed to reform. We support: lowering the debt sustainability thresholds; providing faster debt relief; shifting the
focus of the initiative toward a commitment to, and positive achievements in, poverty reduction; and increasing the
number of countries expected to be eligible for debt relief.
4. We stressed the need to ensure that debt relief will result in poverty reduction, though we recognise that debt
relief alone is insufficient to achieve this goal. We therefore endorse the framework proposed by the Bank and Fund for
strengthening the link between debt relief and poverty reduction. In particular, we welcomed the proposed Poverty
Reduction Strategies that countries will prepare in close collaboration with the Bank and Fund. We stressed the need to
put in place macroeconomic, structural and social policies that will generate growth and contribute to poverty
reduction. We stressed the crucial role good governance must play in HIPC poverty reduction and implementation of debt
relief. We also endorsed the proposals to extend the same approach to strengthen the poverty focus of all IDA and IMF
concessional programs.
5. We agree that Poverty Reduction Strategies should be country-driven, and be developed transparently with broad
participation of civil society, key donors and regional development banks. These strategies should be clearly linked
with the agreed international development goals, with measurable indicators to monitor progress. We called on the Bank
and Fund to give all possible assistance to countries in developing their Poverty Reduction Strategies. These strategies
will provide the basis for all IDA and Fund lending to low income countries and will so assure the close integration of
the institutions' work in these areas. We strongly welcomed the commitments of the President and Managing Director to
the effective implementation of this approach. We also encouraged regional development banks and donors to use the
Poverty Reduction Strategies to guide their support.
6. We reaffirmed the importance of implementing the enhanced HIPC Initiative in accordance with the principles that have
guided the Initiative since its inception, including (i) additionality of debt relief, (ii) maintaining the financial
integrity of multilateral financial institutions, and (iii) cost sharing on a broad and equitable basis. We agreed
financing of debt relief should not compromise the financing made available through concessional windows such as IDA.
7. We expressed appreciation for the many contributions to the HIPC Initiative made thus far, and for the efforts made
by multilateral development institutions to provide funding for the Initiative from their own resources. We also
welcomed the agreement by the Paris Club to increase its debt relief under the enhanced framework by providing increased
debt reduction in NPV terms up to 90 percent or more, if needed, on commercial loans as well as additional relief on ODA
claims-up to full cancellation-on a bilateral basis.
8. We heard today from Jim Wolfensohn, Michel Camdessus, Omar Kabbaj and Enrique Iglesias and we have a clear picture of
their financing needs. Ministers recognized that there will need to be additional bilateral support in order to meet the
financing requirements of the enhanced Initiative. These financing arrangements will need to be considered at the
forthcoming Development and Interim Committees. Based on the expressions of goodwill and support that we have heard, we
are confident that the political will and commitment is there to allow the Enhanced HIPC Initiative to commence after
these meetings so that eligible countries can receive enhanced debt relief within the new poverty reduction framework.
9. We urge the speedy implementation of the enhanced Initiative so that as many countries as possible would qualify for
assistance under the Initiative by end 2000.
ENDS