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'Assistance to developing nations should remain high on agenda'

By Sridhar Krishnaswami

WASHINGTON, OCT. 3. The Union Finance Minister, P. Chidambaram, has stressed that steps to scale up assistance to the developing nations should remain high on the agenda if the Millennium Development Goals are to be met.

"Two years after Monterrey, the implementation of the Compact appears uncertain. The promised additionality of resources has failed to materialise. Without additional resources MDGs will remain a distant dream," the Finance Minister said in a statement at the Joint Annual Discussion of the Board of Governors Meeting of the International Monetary Fund and the World Bank.

"Even the best performers among developing countries may not realise the dream. I should also point out, with some regret, that when concessional resources are allocated, that appears to be done on considerations other than the twin criteria of `need' and `performance'.

Mr. Chidambaram was also critical of the fashion in which assistance is continuing to be delivered saying this is being done "in a piecemeal, uncertain and inequitable manner rather than through multilaterals with transparent allocation criteria".

Donor coordination

Mr. Chidambaram, taking note of the Bank and the Fund having put donor coordination and harmonisation high on the agenda, has hoped that these two financial institutions will sustain and further enhance efforts to make the promised levels of additionality in overseas development assistance (ODA) a reality.

"The negotiations for IDA's fourteenth replenishment are well under way. The time for the donor countries to deliver on their Monterrey commitment for a substantial scale up in ODA is now," the Minister noted with an emphasis on "now".

Mr. Chidambaram touched on a number of issues and challenges with respect to the global economic outlook, debt relief, functioning of international financial institutions, risks and impact of the oil market crisis, the international environment for multilateral trade negotiations and the need to step up — and in a big way — lending to infrastructure.

Debt distress

"Most of the world's lowest income countries are faced with acute debt distress. This makes allocation of resources difficult . . . Assisting such countries without adding further to their debt burden and at the same time avoiding the moral hazard implicit in lending and forgiving, are extremely delicate exercises. We wish the IFIs and the IDA well in carrying out these crucial tasks," the Finance Minister noted.

By way of conclusion, Mr. Chidambaram pointed out that 80 per cent of the people who inhabit the earth enjoy a mere 20 per cent of the global income. "That is the cause of poverty, discrimination and injustice. We must ensure that all parts of the global compact agreed at Monterrey are in place by the time we meet next year. And if we do that, it will still leave us just about a decade to realise our dream of Millennium Development Goals," the Minister said.

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