The IMF and the Extractive Industries Transparency Initiative (EITI) Multi-stakeholder Conference, 17th June 2003, London

Statement by Mr. Peter S. Heller, Deputy Director Fiscal Affairs Department, IMF

It is a pleasure and honor to be here today, representing the Managing Director of the IMF. The IMF welcomes the EITI. In our country work - especially with our less developed members - we have come to realise the fragility of good governance in countries that are richly endowed with natural resources. And to see a country rich in natural resources not progress in the fight against poverty, or even regress, is especially tragic. We fully agree with the central premise of the EITI that transparency will help foster the wise management of natural resources. Transparent reporting of natural resource revenues will help establish credibility, ensure accountability, and inform the political debate. It is for these same reasons that the IMF strongly promotes policy transparency more generally, including through its transparency codes for fiscal and monetary and financial policies.

Thus, the EITI is fully in line with our own transparency efforts, and we have every expectation that these efforts will reinforce each other. I would like to take this opportunity to outline specific ways in which the IMF will lend its support for the EITI.

First, where this is considered appropriate, our staff will advise country authorities to discuss participation in the Initiative with extractive industry companies operating in their territories.

Second, we are fully prepared to continue to assist with technical advice on design of the Initiative. Since our initial contacts with DFID last fall, we have had several consultations on technical aspects of the Initiative, in particular the design of the disclosure and reporting templates, and we are prepared to continue in this role. The pilots that are about to start should generate the experience necessary to tailor the Initiative so that it will be applicable to the wide variety of country situations and the differing degrees of complexity of their natural resource sectors.

Third, the Fund will be a most interested user of the information on resource revenues that emerges from this Initiative. It will allow our staff to make more comprehensive and accurate assessments of countries' budgetary outlooks. That in turn will support more realistic policy discussions, including on the scope for poverty reduction and the need for donor support. Therefore, our country staff can be counted on to analyse the EITI data in detail, and wherever significant issues arise, they will certainly raise them in their dialogue with the authorities.

Fourth and finally, as tyou know, the Fund provides extensive technical assistance to its members with fiscal policy implementation. Recognising the importance of the EITI, we are prepared to seek the resources, ithin our available TA budget, to be able to give priority attention to countries participating in the EITI that seek our assistance.

Thanks you.

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