Symposium on the International Finance Facility: introduction

✍ Scribed by Paul Mosley

• Publisher: John Wiley and Sons
• Year: 2004
• Tongue: English
• Weight: 26 KB
• Volume: 16
• Category: Article
• ISSN: 0954-1748
• DOI: 10.1002/jid.1135

✦ Synopsis

There is a new climate of optimism and creativity within the international finance scene at present, especially in relation to the poorer developing countries. The economies of donor countries and especially their financial markets have recovered since their post 9/11 trough. There is increasing evidence that 'aid works', often even in policy-unfavourable environments. But beyond all this there has been a recent determination not to plough on into the 21st century with the same old aid modalities but to make a fresh start with new policy instruments; a fresh start which on all the evidence will be needed if the Millennium Development Goals, or anything like them, is to happen. This Policy Arena introduces and discusses one of the most ambitious of these new policy instruments, the UK Treasury's International Finance Facility (IFF) formally launched in March 2004. The IFF proposal is essentially a bringing-forward, through bond issues, of aid commitments already made, in the new spirit of optimism, by donors at the Monterrey conference of 2002, but its scope is large: nothing less than a doubling, for the next few years, of aid volumes currently running at about $50 million a year, with the explicit aim of getting back on track to meet the Millennium Goals and halve global poverty by 2015. What is also notable is not only the size of the initiative, but where it comes from: it is a finance ministry, not a spending ministry, which is not only breaking out of its traditional function of 'saying no' but leading the impetus towards a coordinated aid surge. Those familiar with the Treasury document on Tackling Poverty: a global New Deal of February 2002 will be aware that it also represents an attempt towards coordination of redistributive policies at home and abroad.