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Indebted poor countries need more resources to weather global crisis, achieve development goals

Doha, Qatar – Representatives from the Inter-American Development Bank (IDB), the International Monetary Fund, the World Bank, other regional development banks, donor and poor recipient countries as well as civil society organizations expressed their concerns on the adverse impact the global financial crisis is having on the progress these countries have made towards attaining the Millennium Development goals.

Heavily indebted poor countries (HIPC) will need additional resources to counter the effect of the global financial crisis and should work with international development institutions in finding new ways of securing those resources, participants at a side event to the United Nation’s Financing for Development Conference concluded.

The Bank’s intervention focused on the effect of the global financial crisis on HIPC’s advances towards the Millennium Development goals.  The panel concluded that the debt relief efforts had a positive effect on highly indebted poor nations but that these effects are suffering reversals as a result of the food and oil crisis, and will be further impacted by the global financial crisis.

The IDB participated in a side event on November 30 in a panel that reviewed recommendations from the 2002 Monterrey consensus, which set development aid commitments and debt relief measures, among other agreements.

Additional external resources were considered more important than ever to help indebted poor countries cope with the volatile terms of trade and the global contraction of demand, and step up progress towards the attaining the Millennium Development goals (MDGs).

The IDB is the only multilateral development bank that does not receive replenishments for its concessional resources. Given the increasing needs of its low-income member countries, particularly in these turbulent times, the Bank is currently developing a medium-to-long term strategy to ensure the sustainability of its concessional funds. The Bank’s Governors are expected to discuss the strategy in the first half of next year, including alternatives to increase concessional resources. 

The UN’s Conference on Financing for Development Conference brought together heads of state, government ministers, international financial institutions, development agencies, civil society and private sector participants to assess the progress made on the actions recommended in the Monterrey Consensus. Participants considered challenges that have emerged since 2002 -- such as climate change, food and oil crisis, and the global financial crisis – and how these challenges are affecting progress towards the MDGs.