International finance facility
In January 2003 HM Treasury and the Department for International Development (DFID) launched a proposal for an International Finance Facility (IFF). The IFF is designed to frontload aid to help meet the Millennium Development Goals.
Estimates suggest that development assistance must be doubled and focused on the poorest countries if the Millennium Development Goals are to be met - an increase of at least $50 billion a year. At the UN's International Conference on Financing in Monterrey in 2002, donors pledged to provide an additional $16 billion a year from 2006. But this means a significant resource gap must be bridged if the Millennium Development Goals are to be reached.
The Millennium Development Goals represent different indicators of the same basic poverty. Investments in different sectors must take place simultaneously to ensure sustainable progress. Education, health, access to water, roads and other infrastructure for growth must be tackled at the same time to ensure a lasting exit from poverty. Funding for debt relief should reinforce, not replace, funding to build a skilled work force and the infrastructure and capacity to trade. The IFF, as a stable financing vehicle, could provide the critical mass of additional and predictable funding needed to make lasting progress in all these areas.
The IFF:
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is a financing mechanism which would provide up to an additional $50 billion a year in development assistance between now and 2015;
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would leverage in additional money from the international capital markets by issuing bonds, based on legally-binding long-term donor commitments;
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would be responsible for repaying bondholders using future donor payment streams; and
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would disburse resources through existing multilateral and bilateral mechanisms.
Since the proposal for the IFF was launched, it has received broad interest and support from emerging markets, developing countries, international institutions, faith communities, NGOs and business.
Italy recently announced its support for the IFF and has committed to work with the UK and international partners towards its implementation.
The September 2004 proposal document is designed to facilitate the ongoing process of consultation and is available to download in Adobe Acrobat Portable Document Format (PDF). For alternative ways to read PDF documents and further information on website accessibility visit the HM Treasury accessibility page .
PDF file of International Finance Facility proposal - September 2004 (243KB)
Financing for Development forum, 8th April, 2004:
The Dubai Annual Meetings in 2003 mandated consultation of emerging markets and developing countries on aid effectiveness, aid absorption and innovative financing mechanisms, including the IFF. As part of this consultation, Gordon Brown and Nicolas Sarkozy jointly chaired a Ministerial Forum on Financing for Development on 8th April, in Paris. The Forum was attended by over 55 countries, 35 ministers, the President of the World Bank, Acting Managing Director of the IMF, United Nations Under-Secretary General for Economic Affairs and heads of multilateral organisations and non-governmental organisations.
> PDF file of Statement from Finance Ministers of Emerging Market Economies and Developing countries (53Kb)
> PDF file of Chair´s summary (53Kb)
> PDF file of Message from Mr Jacques Chirac, President of the French Republic (49Kb)
> PDF file of Speech by Mr Nicolas Sarkozy, Minister of State, Minister for Economic Affairs, Finance and Industry
Making Globalisation Work for All: Financing the Milllennium Development Goals, 16th February 2004:
On February 16th the Treasury hosted a conference “Making Globalisation Work for All”, at which a coalition of UK NGOs, faith leaders and figures from the business world endorsed the IFF.
> Address and introduction by Lord Carey, former Archbishop of Canterbury
> Speech by the Chancellor of Exchequer, Gordon Brown
> Speech by President of the World Bank, Jim Wolfensohn
> Speech by Bono, via video link
> Speech by the Secretary of State for International Development, Hilary Benn MP
> Speech by President of Brazil, Luiz Inacio Lula da Silva
> PDF file of speech by Cardinal Cormac Murphy-O´Connor
Poverty and Globalisation, Financing for Development, 9th July 2004:
On 9th July the Chancellor spoke at the Vatican for a seminar "Poverty and Globalisation: Financing for Development" attended by over 100 church and NGO representatives from around the world. At the seminar, hosted by the Pontifical Council for Justice and Peace, the Pope sent a message of endorsement for the IFF and Chairs Cardinal Murphy O'Connor and Cardinal Rodriguez issued a statement supporting the IFF and launching a global coalition to campaign for increased aid to the poorest countries. Please find attached the papal statement, the Chairs' statement and the Chancellor's speech, in which he proposed the revaluation of IMF gold and up to 100% multilateral debt relief for the poorest countries.
> PDF file of message of support by Pope Jean Paul II
> PDF file of chairmen’s statement
> Speech by the Chancellor of the Exchequer at the at the Vatican City