China plays key role in partnering IMF to provide for low-income countries

ADDIS ABABA - China has been playing an important part in partnering international financial institutes like the International Monetary Fund (IMF) for its programs targeted for the low-income countries, a deputy chief of the Fund said.

Zhu Min, deputy executive director of IMF, told Xinhua on the sidelines of the Third International Conference on Financing for Development held in Addis Ababa, the Ethiopian capital, that China is not only a share-holder of the Fund but also offered generous funding support for its programs designed for the low-income developing countries.

"With China's support, we have been able to increase our preferential loans to the countries in need as well as to expand technological support to the low-income countries for them to build capacity to enhance tax revenue, train professionals, develop domestic financial markets and maintain macro-economic stability," said Zhu.

"We consider that as a developing country itself, China has played a key role in assisting the developing world through the cooperation with international financial institutes," he added. "IMF extends its gratitude to the Chinese government for its contributions."

Chinese Finance Minister Lou Jiwei, who attended the conference on behalf of President Xi Jinping, said China will partner with various parties to actively secure financing for development to achieve sustainable growth and shared prosperity in the world.

Lou said as the world's largest developing country, China benefited a lot from the international financing cooperation and in return contributed actively to the process. Over the past few decades, China has extended assistance to over 120 developing countries to invest in health, education, climate change and agriculture.

IMF is among a couple of international financial institutes that have been active in assisting the developing world. But as world leaders gather at Addis Ababa to plan the source of financing for the globe's Sustainable Development Goals (SDGs) in the coming 15 years, promises are expected to be made by traditional donor countries in terms of how to chart the way forward, which involves trillions of dollars in investment per year.

Earlier, IMF, together with a number of multilateral development banks, unveiled plans to extend more than $400 billion in financing over the next three years in support of the post-2015 development SDGs agenda.

At the conference, Zhu also announced that IMF will, immediately effective, expand access to all its concessional facilities by 50 percent, and offer more concessional financing for the poorest and most vulnerable countries.

"It is not easy for IMF. Historically, for the first time, IMF decided to lift 50 percent of our finance resources for low-income countries and drop interest rates of long-term concessional financing to zero," Zhu said, adding that the IMF will also partner the World Bank to launch an initiative to help developing countries strengthen tax revenue and stem illicit financial outflows.

He said financing, bringing technical support to help low- income countries mobilize domestic capacity to finance development, and advising member states to maintain macro-economic stability are the three main functions of international financial institutes like the IMF in terms of advancing the world's post-2015 development agenda.

On the issue of the IMF 2010 reforms, Zhu said the Fund has to reflect the new economic structure of the world, where in the past ten to twenty years low-income and emerging countries grew strongly and their share of economy increased dramatically.

"We have to bring in more balance in voting shares, voices, and SDR (special drawing rights) shares as well. This is the reason the 2010 IMF reforms are very important," Zhu said. "For obvious reasons we understand that the American Congress had not yet approved the reforms. As the US remains the largest share-holder of the IMF, no reforms can be passed without the US approval."