Global Policy Forum

By Masood Haider

Finance Minister Shaukat Aziz on Tuesday called on the Bretton Woods institutions to evolve an enduring and permanent solution of the overwhelming levels of external debt burden of middle income developing countries. Speaking at the third meeting of the Economic and Social Council (Ecosoc) and the Bretton Woods Institutions (BWIs) at the United Nations, Aziz proposed that a set of principles or guidelines might be adopted to promote a comprehensive solution of the debt burden of developing countries.

He suggested that the middle income countries should be allowed debt rescheduling and debt re-profiling, enabling them access to debt servicing institutions and financial markets. He stressed that debt relief should be accompanied by the opening up of markets of the developed countries to the exports of developing countries. Aziz underscored that it was trade and not aid which would promote true development in the developing countries.

He underlined the need for evolving a set of multilaterally agreed indicators for poverty eradication. Such indicators, he stated, would help in measuring the impact of the efforts being made by the developing countries in this regard. The leaders of the Group of 77 supported Aziz's proposals.

He said that the donor agencies' initiatives for reducing debt burden of the highly indebted poor countries (HIPC) could not alone resolve the debt problem, asking the BWIs to play a role in this regard through credit enhancements and guarantees. "In other words allow access to the middle income countries to global capital markets."

On poverty reduction which is a goal set by BWIs, Aziz suggested that a mechanism be evolved to measure poverty scale indicators. He further suggested that economic managers should track down the poverty indicators by monitoring as they do in case of gross domestic products and fiscal growth of nations. "Therefore, we need to relentlessly pursue unhindered access to the markets, particularly in the developed world, so that the developing states could achieve self-reliance and meet the aspirations of their people," Aziz stated.

The theme of the meeting was, "Towards a stable international economic system, responsive to the challenges of development, especially in developing countries." The primary purpose of the meeting was to promote greater coherence between the economic and social development policies of the UN and the Bretton Woods institutions.

Over 35 ministers/vice-ministers participated at the meeting of the 54-member Ecosoc. The International Monetary Fund (IMF) was represented by acting Managing Director, Stanley Fischer. World Bank Managing Director Sven Sandstrom was also present at the meeting. Chairmen of the different BWIs committees and economic groupings briefed about the outcome of the spring meeting of the Bank and the Fund held in Washington. The UN secretary-general, Kofi Annan, also addressed the meeting.

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