Operating within that concept, a refocused IMF must be aware of issues outside its core areas of responsibility, and work in a complementary fashion with the organizations primarily responsible for those issues. In this regard, I greatly appreciate the spirit of close partnership I have experienced during these past months in working with Jim Wolfensohn and his colleagues at the World Bank. Clearly, debt relief is an important part of a comprehensive strategy to reduce poverty. The IMF and World Bank have been spearheading the enhanced HIPC Initiative, which brought debt relief to 22 poor countries during the past year. But I would caution against viewing debt relief as a panacea.
Credit is an indispensable element for economic development.
That is why, in the longer run, it will be crucial for poor countries to win the trust of private investors in their ability and willingness to repay what they borrow. And that is why they need to make good use of the breathing space that is being provided now from their debt service obligations, to make decisive progress in their efforts to reduce poverty. The fight against poverty requires courage, commitment, and prolonged effort. That is why it will succeed only if it is based on a poverty reduction strategy designed by the country itself, rather than one that is imposed from outside. While the track record is very short, the poverty reduction process has already brought positive results.