World Economy

More Concessional IMF Financing for Poorest Countries

More Concessional IMF Financing for Poorest CountriesMore Concessional IMF Financing for Poorest Countries

A top official of the International Monetary Fund said the institution will expand access to all its concessional facilities by 50%, and offer more concessional financing for the poorest and most vulnerable countries in the world.

The move is part of IMF’s support to the United Nations-led Post-2015 Development Agenda, said Zhu Min, deputy managing director of the IMF, at the start of a four-day UN Conference on Financing for Development in the Ethiopian capital Addis Ababa, NewsNow reported.

The Post-2015 Development Agenda aims to help define the future global development framework that will succeed the Millennium Development Goals.

“And we will maintain for the longer term the zero interest rate on our Rapid Credit Facility loans for fragile states and countries hit by natural disasters,” Zhu said.

Under the new financing proposals, the IMF will increase access to concessional fund resources for all Poverty Reduction and Growth Trust eligible countries, rebalance the mix of concessional to non-concessional financing towards more use of non-concessional resources and increase access to fast-disbursing concessional and non-concessional resources for countries in fragile situations.

In these concrete ways, the IMF will strengthen the global safety net for low-income countries, Zhu said.

 Greater Flexibility

The IMF believes the new proposals will enhance access of developing countries to IMF financial support and will provide the countries with greater flexibility to meet balance of payments needs as they pursue inclusive growth and poverty reduction.

The announcement comes a few days after the institution, together with a number of multilateral development banks, unveiled plans to extend more than $400 billion in financing over the next three years in support of the Post-2015 Development Agenda.

With results attained during the 15-year period of the MDGs, Zhu called for even greater unity to achieve the new global development goals.

More is needed to achieve the needs of the sustainable development goals, for instance the infrastructure sector in emerging and developing countries needs up to $1.5 trillion of financing a year, Zhu said.

“Across the world, the scourges of inequality and injustice remain: over a billion people still live in extreme poverty. To move further ahead on the path of sustainable, inclusive growth we must be united and guided by the three key principles: partnership, commitment and flexibility,” he said.