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Press release

26th June 2000

New Report shows IMF Poverty Reduction Plans are "Barrier to pro-poor policies"

A report published today by the World Development Movement (WDM) shows that the International Monetary Fund's (IMF) new Poverty Reduction Strategies are acting as barriers to policies benefiting the world's poorest people.  

The report, written for WDM by Ghanaian economist, Charles Abugre, comes as governments meet in Geneva for the UN Social Summit+5. Five years ago in Copenhagen, the first UN Social Summit recognised the harmful effects of IMF Structural Adjustment Programmes (SAPs) and called for reforms to ensure that poverty reduction, not blind economic growth, was placed at the centre of IMF policies.

"Still SAPping the Poor: A Critique of IMF Poverty Reduction Strategies" examines the IMF's successor to SAPs, the Poverty Reduction Strategy Papers. It looks at the IMF's claims that PRSPs (which are a condition of debt relief) have poverty reduction at their core and are written by governments in consultation with their population. It finds both claims to be false and concludes that PRSPs are a significant "barrier to pro-poor policies". 

WDM will be taking the report's findings to Geneva. Speaking on the eve of the summit, WDM Debt campaigner, Bethan Brookes said: "This report blows out of the water the IMF's claims to have poverty reduction centred programmes. Charles Abugre has provided a far reaching analysis which reveals that the IMF's Poverty Reduction Strategies are just as far from realising the aims of the first Social Summit as the failed Structural Adjustment Programmes were. 

"What most concerns WDM is that PRSPs are the gateway to debt relief. The whole debt relief programme is conditional on poor countries producing these programmes for IMF approval. It is a cruel irony that the final hurdle to desperately needed debt relief is a plan of policies which are shown to hurt the poor. So much for Gordon Brown's promise that the fruits of debt relief are spent on poverty reduction."


Summary of the report:

Still SAPping the Poor: A Critique of IMF Poverty Reduction Strategies

A report by Charles Abugre for the World Development Movement 

Summary

In accordance with the aims of the 1995 Social Summit and following public criticism of its role in developing countries the IMF last year adopted poverty reduction as one of its key objectives.  It promised to reform its maligned Structural Adjustment Programmes (SAPs) on which debt relief is conditional - introducing in their place `Poverty Reduction Strategy Papers' (PRSP). 

Theoretically, the introduction of PRSPs will allow governments and their people to draw up their own development plans. IMF lending must then fit into these plans.  But the report "Still SAPping the Poor: A critique of IMF poverty reduction strategies" expresses grave doubts as to whether the new PRSP proposals can deliver on their poverty reduction promise.

The report warns:

More worrying still, the report warns that the PRSP process may even bring new dangers:

International Context: The UN World Summit for Social Development

June 26-30 2000 - Geneva

In 1995, the UN Social Summit in Copenhagen focused world attention on the damaging effects of globalisation on poor countries and their people. It drew up a framework for action to place people at the centre of development - putting people before profits.   

Key among the conference themes was a recognition of the harmful effect of SAPs on the world's poor.  It called for their reform to ensure that they contribute to, rather than undermine, social development and poverty reduction goals, outlining specific goals to ensure the protection of the poor.  These included the protection of social spending; reviewing the impact of adjustment programmes on social development and ensuring that SAPs respond to the economic and social conditions, and needs of each country. 

Five years on, set against a rising tide of concern about the social impact of globalisation, the World Summit for Social Development +5 (WSSD+5) will take place in Geneva (26-30 June).  WSSD+5 will review progress made on the commitments of the Social Summit and will suggest new initiatives placing "social development at the heart of the global political agenda."

WDM Possition Statement

As the main vehicle for imposing harmful liberalisation policies on the Third World, and as the main condition for receiving debt relief, the debate on Structural Adjustment Programmes and their successors PRSPs at the Social Summit +5 is critical for poor countries. 

At the Social Summit +5 meeting in Geneva next week, WDM  will recommend:

In light of this:

Notes for Editors:

Charles Abugre is Executive Director of ISODEC (Integrated Social Development Centre), Ghana and former Co-ordinator of the Africa Secretariat of the Third World Network. He has previously been a consultant to the Agency for Co-operation and Research in Development (ACORD) in London and has taught economics at the University of Ghana. He is available for interview via WDM's press office. 

The World Development Movement works to tackle the root causes of poverty. Through its ground-breaking campaigns it wins positive change for the world's poorest people. WDM has over 10,000 supporters and 120 active local groups. 

Contact: Dave Timms, Press Officer: 020 7274 7630 (WDM) or 0411 875 345 (mbl)