IMF beefs up support for weak economies

Accra, Feb. 8, GNA - The International Monetary Fund (IMF) on Wednesday, in Accra said it has set up an Exogenous Shock Facility (ESF) to breathe life back into economies affected by imbalances in the international market.

The ESF, a lending facility, was launched in November 2005 and also meant to support strong countries whose main export crops had been affected by low international prices vis-=E0-vis high import prices. Speaking to Journalists in Accra, Mr Pierre Duquesne; Executive Director for France at the IMF in Washington D.C.; said the instrument was within the growth and investment facility portfolio. Mr Duquesne and six of his colleagues are currently visiting Ghana to acquaint themselves with how Ghana was using the freed-up debt from her donor partners, notably the IMF, World Bank and the African Development Bank.

He said the repayment period for the ESF was over 10 years with a rather low interest rate.

He explained that the IMF had set out a wide definition for what was meant by 'shock' in order to ensure that low income and less developed countries that usually suffered such shocks could be helped to meet their development and debt needs.

"The definition of shock includes countries experiencing diminishing prices of export commodities, high prices of import products such as fuel, natural catastrophes and population dislocations among other things," Mr Duquesne said.

He noted; "there is no well defined exhaustive list on what actually constitutes a shock, it all depends on the programme that the country is able to put together, then we go ahead to support it after due consultations".

Commenting on what they, as Executive Directors would want changed at the IMF in its relations with the countries they represent, Mr Duquesne told the Ghana News Agency later that they would recommended streamlining of conditions for accessing funds, furthermore lowering of qualifying factors in the political economies of the countries concerned, and the enforcement of the voice of low income countries.

He also asked that the perception in developing economies that the "IMF makes 'sick' countries worse is not true and must be changed. "The Fund should allow developing countries to have a greater voice, otherwise the ownership concept being advocated becomes irrelevant, leaving the poor countries weaker."

Mr Thom Scholer, Leader of the delegation, representing the U.K. said it was also important for a change in the voting system that made votes of rich countries stronger than that of the poorer countries that needed the money most.

He said developed countries welcome efforts at strengthening representation through a concerted negotiated process, not through nations fighting among themselves.

The Directors, who are the final decision makers at the IMF, agreed that Ghana had the potential to becoming a middle income country in 2015, but noted that it was not going to be an easy job.

"It requires sustained efforts of current ways and drive towards stabilization and growth of the economy. With the current pace, there is no way this target could not be achieved."

The large number of Journalists, who attended the event, said they usually had mixed feelings each time the IMF or the World Bank started heaping praises on Ghana or any of the 184 member countries. 08 Feb. 06