Dr. Donal Donovan:

I would not agree with that characterisation and I would make a couple of points, very briefly. First, sustained macro instability in terms of financial problems, large budget problems and large debt problems are not conducive to any country, including low income countries, improving their growth performance in such a way that the country will then have more resources to pay for exactly the areas mentioned by the Deputy, namely, education, health and other matters. It is difficult to spend money when one is poor because one does not have money. What one needs to do is to try to get resources going into the country and one will then be in a better position to deal with these very pressing problems.

On the debt issue, in fact, the IMF has been strongly supportive of what is known as the highly indebted poor countries initiative, HIPC, which ended up, with the urging of the IMF, and it took some persuasion for others to join in, cancelling most of the debt, including the debt owed to the IMF and the World Bank, of the poorest and most highly indebted countries in the world. This was a very important step that took place about ten years ago. It led to precisely the positive effect that the Deputy mentioned, namely, the availability and release of resources for these activities. In terms of the characterisation of the IMF as squeezing blood out of a stone or extracting money from poor countries to pay debt service at the cost mentioned by the Deputy, I would not agree with that characterisation.