Brief No 8(ii)
Objectives
1.
CONFIDENTIAL
HER MAJESTY'S TREASURY
1990 SPRING INTERIM/DEVELOPMENT COMMITTEE MEETINGS
DEBT ISSUES AFFECTING THE POOREST COUNTRIES: ESAF
i.
ii.
to secure credit for UK contribution to IMF Enhanced Structural
Adjustment Facility (ESAF).
to support use of ESAF to fund arrears strategy, and to fund Compensatory and Contingency Financing Facility (CCFF) for IDA eligible
members.
Line to Take
2.
to
for
UK largest single committed contributor to ESAF subsidy account. Important
MD's meet
grants and loans targets to provide
2 potential ESAF
disbursement of SDR 6 bn. Urge other donors to contribute generously.
3. Disappointing that take up of ESAF by members is slower than anticipated because many potential beneficiaries have still to agree sufficiently strong
adjustment programmes. Track record is a consideration, but purpose of ESAF not to reward past efforts; more finance has to be justified by more adjustment.
Use of ESAF in arrears strategy important to keep down the costs to members
in arrears of normalising their relations with the IFIS.
5. (Defensive) UK and Fund Staff negotiating rephasing of our contribution in
the view of slower than expected disbursement. Our initial agreement with
Fund
allowed for review of phasing
2 years. Our overall commitment is
every
unchanged.