Commonly used economic and foreign policy terms and definitions.

Bretton Woods Project
UK Department for International Development (DFID)

< A >

Accession Countries
Countries in the process of joining the European Union.

Providing an explanation for or justification of one’s actions.

Administrative Costs
DFID administrative costs include the running costs of DFID Headquarters, overseas costs of staff in agreed diplomatic posts concerned with full time aid administration, including Staff Appointed in Country employed by DFID; expenditure in respect of residual rent liability on the Chatham Maritime site arising from the terms agreed for the privatisation of DFID’s former next steps agency, the Natural Resources Institute; and those elements of Foreign and Commonwealth Office and CDC Capital Partners, formerly known as Commonwealth Development Corporation, administration costs which are related to aid delivery.

The recommendation of a policy.

Aid effectiveness
A measure of the quality of aid delivery and maximising the impact of aid on poverty reduction and development.

Aid Untying
The ending of the practice of most donors to insist that aid is spent on goods and services from the donor country in favour of giving unrestricted access to those who can compete best on price, quality and service.

Acquired Immune Deficiency Syndrome

When donors base their overall support on partner countries’ national development strategies, institutions and procedures.

Articles of Agreement
Each of the Bretton Woods organisations operate according to procedures established by its articles of agreement or an equivalent founding document. These documents outline the conditions of membership and the general principles of organisation, management, and operations.

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Back Loading
Deferring the disbursement until specified conditions have been implemented.

Balance of Payments (BOP)
An overall statement of a country’s economic transactions with the rest of the world over some period of time, consisting of the current account, capital account and changes in official foreign exchange reserves. This BOP can also refer to the difference in total receipts and expenditure for any category.

Bali Action Plan
This is the outcome of the Bali Summit (December 2007) where after two weeks of intense negotiations, governments of more than 190 countries reached agreement on a roadmap for achieving a global climate change deal by the end of 2009.

Bank Procedures (BPs)
World Bank guidelines providing parameters for implementing policies.

Bilateral Aid
Bilateral aid is provided to developing countries and countries in transition on the Development Assistance Committee List on a country to country basis, and to institutions, normally in Britain, working in fields related to these countries.

Bretton Woods Institutions (BWIs)
Collective name for World Bank Group and the International Monetary Fund (IMF), institutions established in 1944 at Bretton Woods, New Hampshire, USA.

A group of 5 countries, Brazil, Russia, India, China and South Africa, with a growing influence and impact on regional and global issues.
The UK works in areas where our BRICS partners want UK involvement as they develop their approaches; the BRICS strategy is very much a cross government strategy, and in some cases our work
will take place through and with other UK government departments.

Budgetary Aid
General financial assistance (structural adjustment lending) given in certain cases to dependent territories to cover a recurrent budget deficit. Also known as Programme Support.

Budgetary assistance or Budget Support
Budget Support is a form of programmatic aid in which: a. Funds are provided in support of a government programme that focuses on growth and poverty reduction, and transforming institutions, especially budgetary; b. The funds are provided to a partner government to spend using its own financial management and accountability systems.

Business plan
Brings together Departmental priorities (ie our six priorities in the Structural Reform Plan) and our contribution to the Government’s new system of democratic accountability, through improved public transparency.

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Capital Account Liberalisation (CAL)
Removal of controls on the international flows on a country’s capital account, enabling full currency convertibility and opening of the financial system.

CEE Bankwatch Network
This network organises environmental NGOs from 11 countries in Central and Eastern Europe, and stimulates improvement in the state of the environment, promotes and undertakes charitable expert and educational activities improving the environment.

Civil Society Organisations
All Civic Organisations, associations and networks which occupy the “Social space” between the family and the State who come together to advocate their common interests through collective action. It includes volunteer and charity groups, parents and teachers associations, senior citizens groups, sports clubs, arts and culture groups, faith-based groups, workers clubs and trade unions, non-profit think-tanks and “issue-based” activist groups.

Committee on Development Effectiveness (CODE)
Established in 1994 as an 8-member standing committee of the Board of Executive Directors, CODE oversees the operations evaluation system of the Bank and the IFC operations, reviewing their output and management responses to it.

Committee on Governance and Executive Directors’ Administrative Matters (COGAM)
An 8-member standing committee of the Board of Executive Directors, COGAM advises the Board on issues of governance and administrative policy such as codes of conduct on corruption. It is the key committee in following up on the agenda to increase the ‘voice’ and participation of developing countries at the Bank. Previously CODAM.

Compensatory and Contingency Financing Facility (CCFF)
IMF financing facility that combines the compensatory financing facility with elements of contingency financing to help members cover short falls in export earning and service receipts, as well as excesses in cereal import costs, that are temporary and arise from events beyond the members’ control.

Compliance Advisor Ombudsman (CAO)
CAO is a mechanism to allow individuals and communities impacted by IFC and MIGA projects to raise their concerns directly and to enhance the social and environmental outcomes of such projects. Its 3 roles are overseeing IFC/MIGA projects’ overall environmental and social performance (Compliance); providing independent advice to the President and management on specific projects as well as broader environmental and social policies, guidelines, procedures and resources (Advisor); and addressing the complaints of impacted people to find mutually satisfactory solutions (Ombudsman).

Comprehensive Development Framework (CDF)
Framework developed by the World Bank to coordinate all actors in the development process towards implementing a coherent framework of macroeconomic, structural and social reforms for poverty reduction.

Concessional Loan
Loan provided to poorest countries with lower interest rates and longer repayment periods than typical or standard market or multilateral loans, i.e. less than market interest rates and extended grace period. Also known as a soft loan.

Concessional Resources
Development assistance with a grant element normally greater than 35%.

When donors require their developing country partners to do something in order to receive aid. If the condition is not fulfi lled it will generally lead to aid being interrupted or suspended. The UK policy on conditionality is that our aid is based on three shared commitments with partner governments: poverty reduction and meeting the MDGs; respecting human rights and other international obligations; and strengthening financial management and accountability and reducing the risk of funds being misused thorough weak administration or corruption. If partner governments move away from these conditions, we can suspend, interrupt, delay or change how we deliver our aid. We do not use conditions to impose specific policy choices on countries.

Contingency Credit Line (CCL)
IMF credit line established after the financial crisis in 1997-1999. Countries are required to satisfy certain conditions in order to join the CCL to provide emergency assistance.

Countries in transition
Term used to describe former Soviet countries in Eastern Europe and the former Soviet Union, and China, Mongolia and Vietnam.

Countries of Central and Eastern Europe and Central Asia (CEE/CA)
Countries of Central and Eastern Europe and Central Asia

Country Assistance Plans (CAPs)
DFID has produced or is producing Country Assistance Plans for all countries where we provide development assistance programmes. These plans, produced in consultation with governments, business, civil society, and others within the country concerned and within the UK, set out how we aim to contribute to achieving the Millennium Development Goals in the country in question. Country Assistance Plans are normally intended to cover a three to four year period. For some groups of countries a Regional Strategy Paper is produced.

Country Assistance Strategy (CAS)
Outlines the programme of policy reforms and projects for which the World Bank provides loans, ie financed by World Bank loans. The CAS document describes the Bank Group’s strategy based on an assessment of priorities in the country, and also indicates the level and composition of assistance to be provided based on the strategy and the country’s portfolio performance.

Country Economic Memoranda
Included under final Country Economic and Sector Work Reports, which include a broad range of documents on borrower country economies and sectors.

Country-led approaches
Where donors allow partner countries to take the lead in the design and delivery of development and provide support to partner counties.

Country Policy and Institutional Assessment (CPIA)
Initiated by the Bank in the late 1970s, CPIAs consist of a set of criteria representing the different policy and institutional dimensions of an effective poverty reduction and growth strategy (e.g quality of budgetary and financial management, debt policy, gender equality…), and are intended to guide the allocation of IDA lending resources. For each criterion, countries are rated on a scale of 1 (very weak performance) to 6 (very strong performance), and a total rating for each country is calculated.

Credit Tranche
A tranche is an installment or portion of an IMF loan. Loans are often made for 18-month or three-year programmes and disbursed in tranches. Certain conditions must be met for the release of subsequent tranches.

Cross Conditionality
Practice of including World Bank-related programme conditions in IMF programmes and vice-versa. Such actions should be reduced under new guidelines on streamlining conditions.

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Debt Refinancing
A form of relief in which a new loan or grant is arranged to enable the debtor country to meet the service requirements on an earlier loan.

Debt Relief
Debt Relief may take the form of cancellation, rescheduling, refinancing or re-organisation. Interest and principal foregone from debt cancellation forms part of DFID programme expenditure whilst other debt relief is funded from other official sources. a. Debt cancellation (or Retrospective Terms Adjustment) is relief from the burden of repaying both the principal and interest on past loans; b. Debt rescheduling is a form of relief by which the dates on which principal or interest payments are due are delayed or rearranged; c. Official bilateral debts are re-organised in the Paris Club of official bilateral creditors, in which the UK plays its full part. The Paris Club has devised increasing generous arrangements for reducing and rescheduling the debt of the poorest countries; most recently agreeing new terms for the enhanced Heavily Indebted Poor Countries Initiative.

Debt Service
Payments due under debt contracts. This includes payment of interest as it becomes due and payments of the original amount borrowed (principal). Where debt is long dated, a large proportion of the debt service may consist of interest payments.

Debt Standstill
Mechanism by which a country agrees to cease payments on its debts until a restructuring agreement has been negotiated with its creditors.

Department for International Development (DfID)
UK Government department for International Development, formerly the Overseas Development Administration (ODA).

Department of Institutional Integrity (INT)
INT investigates allegations of fraud and corruption in Bank operations and allegations of staff misconduct. It also assists in preventive efforts to protect Bank funds such as staff training.

Developing Countries
A definition employed by the DEC to categorise countries eligible for Official Development Assistance.

Development Assistance Committee (DAC)
The Development Assistance Committee of the Organisation for Economic Co-operation and Development is a forum for consultation among 22 donor countries and the European Commission, on how to increase the level and effectiveness of aid flows to all aid recipient countries. The member countries are Australia, Austria, Belgium, Canada, Denmark, European Commission, Finland, France, Germany, Greece, Ireland, Italy, Japan, Luxembourg, Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, UK and United States.

Development Assistance Committee: List of Aid Recipients
This list is in two parts. Part I shows developing countries and territories eligible to receive official development assistance. Part II shows countries and territories eligible to receive official aid. The list is designed for statistical purposes and not as guidance for aid or other preferential treatment. Part I: Developing Countries and Territories The list comprises all countries and territories: in Africa; in America except the United States, Canada, Bahamas, Bermuda, Cayman Islands and Falkland Islands; in Asia except Japan, Brunei, Hong Kong, Israel, Kuwait, Qatar, Singapore, Taiwan and United Arab Emirates; in the Pacific except Australia and New Zealand; plus Albania, Armenia, Azerbaijan, Georgia, Gibraltar, Malta, Moldova, Turkey and the states of former Yugoslavia in Europe. Part II: Countries and Territories in Transition The list comprises Belarus, Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Russia, Slovakia and Ukraine, plus the more advanced developing countries which have moved from Part I of the List, namely Bahamas, Bermuda, Brunei, Cayman Islands, Cyprus, Falkland Islands, Hong Kong, Israel, Kuwait, Qatar, Singapore, Taiwan and United Arab Emirates. Note that Moldova moved to Part I of the List on I January 1997.

Development Committee (DC)
A joint Bank-IMF forum, the DC meets twice a year to set broad Bank policy and advise the Board of Governors on development issues. DC’S 24 members are appointed by the executive Board of Directors. They are representative of all the member countries and usually ministers of Finance or Development.

Development Economics Department (DEC)
Department of the World Bank responsible for collecting, studying and sharing information relating to development.

Development Gateway (DG)
DG is an internet portal on development issues which seeks to promote sustainable development and poverty reduction through knowledge and resource sharing. Having been conceived and designed by the World Bank, it commenced operations as an independent not-for-profit organisation in July 2001.

Direct Investment
An investment made to acquire or increase the productive capacity of a country, eg in machinery, factory or business.

The release of loan funds by the World Bank or IMF to a borrower government.

Effectively, the replacement of domestic currency by the United States dollar. In doing so, the country gives up its control of monetary policy. This is generally a response to a total lack of confidence in the domestic currency, often associated with high and prolonged inflation.

< E >

Ecological Debt
Owed by the World Bank and richer countries to citizens of borrowing, poorer countries, ecological debt includes atmospheric pollution and other costs to the global environment of unsustainable living. See Andrew Simmons, “Ecological Debt: the health of the planet and the wealth of nations”, 2005: Pluto Press.

Education for All (EFA)
A UN initiative to promote universal primary education opportunities as a necessary component of poverty reduction. The efforts focus on assisting the marginalized, particularly girls, to secure access to a quality basic education.

The conferment of a sense of self-actualization or authority to an individual, group of individuals or an organization.

Enhanced Structural Adjustment Facility (ESAF)
Facility established in 1987 to provide assistance on concessional terms to low-income member countries facing protracted balance of payments problems. Has been replaced in 2000 by the Poverty Reduction and

Environmental Impact Assessment (EIA)
A study done to determine the probable environmental impact of a proposed project, to assess possible alternatives and to create environmental mitigation plans for a project that may have significant environmental impacts.

Environmental Strategy
Strategy adopted by the World Bank in relation to the environmental dimensions of World Bank policies.

Environmentally and Financially Sustainable Development Network (ESSD)
ESSD is a World Bank network on issues related to agriculture & rural development, environment, and social development.

The trust for special ESAF operations for the Heavily Indebted Poor Countries (HIPC) and Interim ESAF operations. The trust was established in February 1997 to channel special assistance to eligible HIPCs.

European Community (EC)
The 15 member states and the common institutions, notably the European Commission, co-operating on a range of economic and other issues in supra-national integration.

European Development Fund
The European Development Fund is the main route through which EC funds committed to the countries of Africa, the Caribbean and the Pacific under the Cotonou Convention are channelled.

European Union
Created by the Treaty of Maastricht 1992, which enhanced the integration of the European Community but also enabled the member states to co-operate together in an inter-governmental, not supra-national, way in the areas of Common Foreign and Security Policy Justice and Home Affairs.

Assessment of impacts of a programme or policy against its objectives.

Executive Board
A committee of Executive Directors representing the decision-making forum for the World Bank and the IMF.

Executive Directors
The Executive Directors are responsible for the World Bank and IMF daily activities in general. Five of the 24 EDs are appointed by the member countries having the largest number of shares in the Bank. The other countries are grouped into constituencies and represented by an Executive Director, elected every two years.

Extractive Industries Transparency Initiative (EITI)
EITI aims to ensure that revenues from extractive industries contribute to sustainable development and poverty reduction. It was launched in September 2002 by British PM Tony Blair at the World Summit on Sustainable Development in Johannesburg and is carried out by U.K. Department for International Development.

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Financial Aid
Financial Aid in the wider sense is defined as a grant or loan of money which is the subject of a formal agreement with the recipient government or institution. In practice it is all bilateral aid except technical co-operation and administrative costs.

Financial Sector Assessment Programme (FSAP)
Assessment undertaken by joint World Bank and IMF teams to determine the vulnerability of a country’s financial sector and identify opportunities for restructuring and reform.

First Generation Reforms
Conditionalities applied through IMF programmes, which focus on macroeconomic reforms to achieve macroeconomic stability, such as liberalisation of the exchange and interest rates.

Free Prior and Informed Consent/Consultation (FPIC)
Free Prior and Informed Consent is an international requirement for development projects that has been recognised as customary law by the Inter American Court of Human Rights since 1984. FPIC is most relevant to the protection of indigenous populations from unwelcome incursion and investment into their resources. Free Prior and Informed Consultation is a 2005 World Bank amendment which threatens the autonomy and human rights of indigenous peoples by removing the need for consent.

Fragile states
Those states where the government cannot or will not deliver core functions to the majority of its people, including the poor.

Front Loading
Disbursing the bulk of loans at the earlier part of the structural adjustment arrangements.

< G >

The Group of Twenty (G-20) Finance Ministers and Central Bank Governors was established in 1999 to bring together systemically important industrialized and developing economies to discuss key issues in the global economy. The G20 is the premier forum for our international economic development that promotes open and constructive discussion between industrial and emerging-market countries on key issues related to global economic stability.

Group of 24 countries formed at Lima in 1972 to represent the interests of the developing countries in negotiations on international monetary matters.

Group of seven leading industrialized countries - USA, Britain, France, Italy, Japan, Germany and Canada.

Group established in June 1964 by 77 developing countries to promote the collective economic interests of its members and enhances their joint negotiating capacity on major economic issues.

G-7 and Russia, group created in Denver in 1997.

G7/G8 Group
The G7 Group of major industrialised democracies comprises Canada, France, Germany, Italy, Japan, the UK and the United States. The Group of Eight (G8) includes Russia. Their Heads of Government meet annually at the G7/G8 Summit to discuss areas of global concern.

General Agreement to Borrow
Special arrangement under which several industrialised countries stand ready to provide substantial temporary loans to the IMF to allow it to lend extra resources to countries to arrest crises which risk impairing the international monetary system.

General Practices
Guidelines that operational staff of the Bank use.

Global Development Gateway (GDG)
A World Bank-initiated, Internet-based forum facilitating the provision and exchange of information regarding development.

Global Development Network (GDN)
World Bank-initiated network linking professionals and research institutes for development policy formulation.

Global Environment Facility (GEF)
This helps developing countries address global environmental challenges and meet their obligations in this area.

The growing independence and interconnectedness of the modern world through increased flows of goods, services, capital, people and information. The process is driven by technological advances and reductions in the costs of integrated transactions, which spread technology and ideas, raise the share of trade in world production and increase the mobility of capital.

Grant Element
Measures the concessionality of a loan expressed as the percentage by which the present value of the expected stream of repayments falls short of the repayments that would have been generated at a given reference rate of interest (usually market rate).

Gross Domestic Product (GDP)
The total value of goods and services produced within a country.

Gross National Income
Previously known as Gross National Product, Gross National Income comprises the total value of goods and services produced within a country (i.e. its Gross Domestic Product), together with its income received from other countries (notably interest and dividends), less similar payments made to other countries.

Gross National Product
Gross national product comprises the total value of goods and services produced within a country (i.e. its gross domestic product), together with income received from other countries (notably interest and dividends), less similar payments made to other countries.
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< H >

Where donors co-ordinate their aid and use common procedures to ensure they are not duplicating work or placing unnecessary demands on their developing country partners.

Heavily-Indebted Poor Countries (HiPCs)
Forty-one low-income countries whose external debt level is deemed to be unsustainable.

Heavily Indebted Poor Countries Initiative (HIPC)
An initiative launched by the International Monetary Fund and the World Bank in 1996 to provide debt relief to the poorest countries. Revised in 1999 to deliver twice as much debt relief as the original initiative.

Human Immunodeficiency Virus

Host Government Agreement (HGA)
An HGA is a legal agreement between a foreign investor and the local government which is designed to reduce financial and political risks posed to investors by sudden changes in national law. If a country breaks an agreement by interrupting or modifying a project it must pay a penalty, which can risk deterring interventions necessary to protect rights and enforce national laws that apply elsewhere in the country.

Humanitarian Assistance
Humanitarian Assistance comprises disaster relief, food aid, refugee relief and disaster preparedness. It generally involves the provision of material aid including food, medical care and personnel) and finance and advice to save and preserve lives during emergency situations and in the immediate post-emergency rehabilitation phase; and to cope with short and longer term population displacements arising out of emergencies.

< I >

IDA 14
The 14th replenishment of the International Development Association’s (IDA’s) resources promised $33 billion to the world’s 81 poorest countries during fiscal years 2006-2008. This represented a 25% increase since the previous replenishment.

IDA Deputies
Individuals appointed by governments who contribute to the IDA (see below). The deputies negotiate each three-year IDA agreement to help determine the focus of the IDA and monitor its effectiveness.

IMF Letter of Intent
Letter from a government to the IMF outlining planned economic reforms to be made in relation to receiving an IMF loan. It includes a matrix of conditions that must be implemented in order to access the IMF’s resources.

Income Groups
The classification of aid recipient countries by income groups is based on Gross National Income per capita figures in 1998 according to the thresholds set out below:
Low income group: countries with a Gross National Income per capita in 1998 of below $760;
Lower middle income group: countries with a Gross National Income per capita in 1998 of $761 to $3030;
Upper middle income group: countries with a Gross National Income per capita in 1998 of $3031 to $9360;
High income group: countries with a Gross National Income per capita in 1998 of $9361 or above.

Independent Commission for Aid Impact (ICAI)
To provide greater independent scrutiny of UK aid spending to deliver value for money for British taxpayers and to maximise the impact of the British aid budget

Independent Evaluation Office (IEO)
A newly-formed, independent office to carry out independent evaluation of IMF activities, operations and programmes.

Information Communication Technology (ICT)
The use of technology for communication and information dissemination.

Inspection Panel
This closely addresses the concerns of populations affected by the World Bank’s operations and ensures they adhere to the institution’s operational policies and procedures regarding the design, preparation and implementation of a project.

Institutional Strategy Papers
Institutional Strategy Papers are designed to set DFID’s partnerships with multilateral development institutions in a strategic framework. The papers are prepared in consultation with that institution and other interested parties and set out the objectives for our partnership with that institution. Institutional Strategy Papers have been or are being prepared for our main partner institutions and will normally be produced every three to four years.

Intellectual Property Rights
National and international systems provide for the protection and enforcement of intellectual property rights. Intellectual property constitutes private property rights over ideas and inventions. The principal Intellectual Property Rights are copyrights (material which can be reproduced only with permission of the owner, who can charge for it), patents (product designs or processes which can be used only with permission of the owner, who can charge for it), trademarks (registered marks that exclusively identify a product or economic entity, which cannot be used by others), and industrial designs.

Inter-American Development Bank (IADB)
A financial institution responsible for the financing of social and economic development in Latin America and the Caribbean.

Interim Poverty Reduction Strategy Paper (IPRSP)
Document which outlines actions the government intends to take to develop a full a full Poverty Reduction Strategy Paper (PRSP). It also contains details of intended macroeconomic policy reforms and may also include information on the country’s poverty situation.

Internally Displaced Persons (IDP’s)
Persons who have been forced or obliged to flee or to leave their homes or places of habitual residence, in particular as a result of or in order to avoid the effects of armed conflict, situations of generalised violence, violations of human rights or natural or human-made disasters, and who have not crossed an internationally recognised state border.

International Aid Transparency Initiative (IATI)
Aims to make public information on aid spending and activities more available and more accessible, worldwide

International Bank for Reconstruction and Development (IBRD)
Otherwise known as the World Bank. The World Bank provides loans and development assistance to middle-income and lower-income countries with a stated aim of reducing poverty. Loans generally have a five-year grace period and must be repaid over a period of 15-20 years. The Bank obtains most of its funds through the sale of bonds in international capital markets and whilst not a profit maximizing organisation, has earned net income every year since 1948.

International Centre for Settlement of Investment Disputes (ICSID)
A member of The World Bank Group, ICSID is an arbitration tribunal created in 1966 to settle investment disputes between governments and private foreign investors.

International Development Association (IDA)
The IDA offers assistance to the poorest countries, providing them with interest free loans, technical assistance and policy advice. The IDA is funded by wealthier nations and accounts for around 25 percent of all World Bank lending. IDA lends only to those countries that have a per capita income of less than $885 (1999 figures) and lack the financial ability to borrow from World Bank. At present, 78 countries are eligible to borrow from IDA.

International Development Targets
A series of poverty reduction targets formulated at UN conferences which set goals for reducing absolute poverty levels, increasing primary school enrollment rates, reducing environmental degradation, etc by 2015.

International Finance Corporation (IFC)
Assists with private sector investments, primarily through mobilizing capital on international financial markets, and by providing technical assistance and advice to governments and businesses in developing countries. IFC has 174 members investing in 78 countries, with 40 percent of its investments in the financial sector.

International Financial Institutions (IFIs)
Generic name given to all financial institutions operating on an international level, ranging from development banks, such as the World Bank and Asian Development Bank (ADB), and monetary authorities, such as the IMF.

International Monetary and Finance Committee (IMFC)
This is comprised of IMF governors. It meets twice a year and is the political governing body of the IMF.

International Monetary Fund (IMF)
The International Monetary Fund aims to promote international monetary co-operation, exchange stability, and orderly exchange arrangements; to foster economic growth and high levels of employment; and to provide temporary financial assistance to countries to help ease balance of payments adjustment.

International Parliamentarians’ Petition (IPP)
Following scrutiny of IFI activities by parliaments in recipient countries, IPP is a petition of MPs calling for democratic accountability of IFIs.

International Trade Organisation (ITO)
Multilateral trade regime originally to form part of the Bretton Woods regime with the World Bank and IMF. Plans for this were shelved and it is not until 1995 with the formation of the World Trade Organisation (WTO) that this proposal was fulfilled.

Intergovernmental Panel on Climate Change. Established in 1988, its first report provided the initial scientific evidence of climate change.

< J >

Joint IMF-World Bank Implementation Committee (JIC)
Committee comprising World Bank and IMF staff. The committee is responsible for monitoring the implementation of the Heavily Indebted Poor Countries Initiative and Poverty Reduction Strategies. For the latter, it prepares an assessment for both IMF and World Bank boards on the suitability of PRSPs.

< L >

Least Developed Countries (LDCs)
Forty-eight poor and vulnerable countries, defined by the UN with an annual per capita income of less than US$ 1 per day.

Low Income Countries Under Stress (LICUS)
LICUS is a World Bank initiative for engaging in countries with “very weak policies, institutions and governance - including those emerging from conflict”.

Lower Middle Income Countries (LMIC)
Countries with an annual per capita income of between US$ 766 and US$ 3035 in 1995.

< M >

Managing for results
Management strategies that focus on performance and improvements in country outcomes and provide a framework in which performance information is used for improved decision making.

Middle Income Countries (MICs)
MICs are defined by the World Bank as having: “1. Similar incomes (by definition between $3,036 and 9,385 per capita); 2. Better Policies (but not consistently so); 3. Better institutions (but not all); 4. Better access to external finance (but only 22 out of 69 were investment grade and another 20 had volatile access); 5. Alternatives to the Bank for funds and advice; a test of the Bank’s value added.” From WB Conference on Effectiveness of Policies and Reforms: 4/10/2004

Millennium Development Goals
A set of eight international development goals for 2015, adopted by the international community in the UN Millennium Declaration in September 2000, and endorsed by IMF, World Bank and OECD. These are set out in full in Annex 4.

Monthly Operational Summary
A comprehensive listing of the World Bank’s entire portfolio of proposed projects.

Multilateral Aid
Aid channelled through international bodies for use in or on behalf of aid recipient countries. Aid channelled through multilateral agencies is regarded as bilateral where DFID specifies the use and destination of the funds.

Multilateral Agreement on Investment (MAI)
A proposed agreement on investment negotiated between OECD countries with the aim of facilitating unrestricted capital investment flows between member countries. The proposed agreement which was supposed to take effect in 1998 has now been shelved but proposals are underfoot to incorporate the agreement into the WTO (see WTO) agreement.

Multilateral Institution
International institution with governmental membership, spanning several regions, including financial institutions such as the World Bank and IMF, UN agencies and regional groupings.

Multilateral Investment Guarantee Agency (MIGA)
MIGA aims to encourage foreign investment by providing guarantee to foreign investors against loss caused by non-commercial risks in developing countries. MIGA also provides capacity building and advisory services to help poor countries attract foreign investment.

< N >

National Strategy for Sustainable Development (NSSD)
A national action plan to achieve sustainable development goals. Each country is required to produce such a plan, after an agreement was reached at the UN Rio + 5 Conference.

New Arrangement to Borrow (NAB)
Arrangements under which 25 member countries would be ready to lend to the IMF under circumstances similar to those covered by the General Arrangements to Borrow.

Non governmental organisations (NGOs)
These are private non-profit making bodies which are active in development work. To qualify for official support, UK non-governmental organizations must be registered charities.

Northern Countries
High-income countries. Otherwise known as Developed countries.

< O >

Odious Debt
An “odious debt” is incurred and used for ends which, to the knowledge of the creditors, are contrary to the interests of the nation. The term was coined by Alexander Nahum Sack in 1927 in the wake of the Spanish American war, and is used to describe debts incurred by contemporary despotic regimes which ought to be legally unenforceable unless as personal debts of the regime.

Official Aid
This is the equivalent, for countries on Part II of the Development Assistance Committee List, of official development assistance to countries on Part I of the Development Assistance List (i.e. developing countries). To qualify as official aid, resource flows should have the same concessional and qualitative features as official development assistance.

Official Development Assistance
Official development assistance is defined as those flows to developing countries and multilateral institutions provided by official agencies or by their executive agencies, which meet the following tests: a. it is administered with the promotion of the economic development and welfare of developing countries as its main objective;and b. it is concessional in character and conveys a grant element of at least 25%. Only aid to countries on Part I of the Development Assistance Committee List is eligible to be recorded as official development assistance.

Operational Directive
The only Bank policy statements that are approved by the board of executive directors and are mandatory for all Bank staff.

Operational Policy (OP)
OPs are short focused statements of Bank policy derived from the Bank’s Articles of Agreement, general conditions and board-approved policies.

The use or receipt of monetary assets by the IMF, other than exchanges of monetary assets (transactions).

Operations Evaluation Department (OED)
An independent evaluation unit reporting to the World Bank’s executive directors, that rates the development impact and performance of all the Bank’s completed lending operations. Results and recommendations are reported to the executive directors and fed back into the design and implementation of new policies and projects.

Organisation for Economic Cooperation and Development (OECD)
Group of thirty countries, mostly industrialised nations and transitional economies, membership of which is limited to countries sharing stated principles of “adherence to market economies, democracy, and respect for human rights”.

Partner countries exercise effective leadership over their development policies and strategies and co-ordinate development actions.

< P >

Paris Club
Informal association of credit country finance ministers and Central Bankers which meets to negotiate bilateral debt rescheduling agreements with indebted country governments.

Paris Declaration
The Paris Declaration is an international agreement in which over 100 countries and organisations committed to continue to increase efforts in harmonisation, alignment and managing aid for results with a set of monitorable actions and indicators.

Paris Declaration baseline survey
The Paris Declaration is an ambitious set of 56 commitments group under five principles of ownership, alignment, harmonisation, management for development results and mutual accountability. The Declaration includes 12 indicators with targets to monitor progress. These were assessed in a baseline survey in 2006 and 2008.

Part I Countries
Donors to the International Development Association (IDA) who pay their contributions in freely convertible currency.

Part II Countries
Donor who are entitled to pay most of their contributions to the International Development Association (IDA) in local currency.

Partnership Programme Agreements
PPAs are agreements between DFID and influential civil society organisations in the UK which set out at a strategic level how the two partners will work together to meet the Millennium Development Goals (MDGs). Strategic funding is provided, linked to to jointly agreed strategic objectives.

Performance Criteria
Conditions on IMF loans which must be implemented in order to access the money.

The practice of making the IMF’s resources available to its members in installments over the period of an arrangement. The pattern of phasing can be even, front-loaded of back-loaded depending on the financing needs and the speed of adjustment.

Policy Development and Research Department
IMF department concerned with policy development and research. It ensures IMF policy is applied consistently through the country departments.

Policy Framework Paper (PFP)
Now replaced by the PRSPs. PFPs outlined the state of the economy and the programme of action to be carried out by a government, in particular, those related to its programme with the IMF.

Post Conflict Assistance
Assistance given by the World Bank to debtor nations facilitating the transaction from dependence on debt relief to sustainable economic growth. It is administered by the Bank’s Post-Conflict Unit.

Poverty and Social Impact Assessment (PSIA)
PSIA includes a variety of ‘tools’ and techniques, drawn from both economic and social approaches, which are used in combination to analyse a reform.

Poverty Assessment
These documents include household surveys, a poverty profile and beneficiary assessments. They also include information about the participation of partners and stakeholders.

Poverty reduction budget support
Poverty reduction budget support is a form of financial aid in which funds are provided directly to a partner government’s central exchequer to support that government’s programmes. This can be in the form of general budget support (not directed at particular sectors) or sector budget support.

Poverty Reduction Strategies
Poverty Reduction Strategies are prepared by developing country governments in collaboration with the World Bank and International Monetary Fund as well as civil society and development partners. These documents describe the country’s macroeconomic, structural and social policies and programmes to promote growth and reduce poverty, as well as associated external financing needs and major sources of financing.

A measure of how predictable flows of aid to developing partner countries are. This includes the extent to which aid promised within a given year is delivered and how many years in the future donors provide information about aid to be provided.

Prior Actions
A type of conditionality. These conditions must be applied before a government has access to IMF lending.

Private Enterprise Partnership (PEP)
Established in 2000, PEP is the IFC’s business advisory program and implementer of technical assistance projects in the countries of the former Soviet Union and Mongolia.

Private Flows
Flows of money between countries owned by the private sector, for example, foreign direct investment.

Private Sector Development Strategy
New strategy developed by the World Bank to reduce public sector spending on essential goods and services and by promoting private sector provision of public services, such as health and education. Decision on the adoption of this strategy will be taken in December 2001.

Programme aid
Programme aid is financial assistance specifically to fund (i) a range of imports, or (ii) an integrated programme of support for a particular sector, or (iii) discrete elements of a recipient’s budgetary expenditure. In most cases, support is provided as part of a World Bank/International Monetary Fund co-ordinated structural adjustment programme.

Programme Lending
IMF, World Bank or other donor lending to support an adjustment programme.

Programme-based approaches
Programme-based approaches are funds provided to a sector to deliver a single programme, led by the partner country, with a single budget and a formal process for donor co-ordination, and that make efforts to increase the use of developing partner countries’ systems.

Public financial management
A PFM system has three key objectives: to maintain fiscal discipline (securing stewardship), keeping spending within limits created by the ability to raise revenue and keeping debt within levels that are not prohibitively expensive to service; to promote strategic priorities (enabling transformation) – allocating and spending resources in those areas that make the greatest contribution to the government’s objectives; and to deliver value for money (supporting performance) – efficient and effective use of resources in the implementation of strategic priorities.

Public Private Partnership
A Public Private Partnership brings public and private sectors together in partnership for mutual benefit. The term ‘Public Private Partnership’ covers a wide range of different partnerships, including the introduction of private sector ownership into businesses that are currently state-owned, the Private Finance Initiative, and selling Government services into wider markets.

Public Service Agreement
A set of measurable targets for the Department’s work, as required by the White Paper Public Services for the Future: Modernisation, Reform, Accountability (CM4181). See Annexes 2 & 3 for DFID’s Public Service Agreement.

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Quality Assurance Group
World Bank department which ensures greater discipline in project
preparation and supervision.

The capital subscription, expressed in Special Drawing Rights (SDRs), that each member must pay to the IMF on joining. Up to 25 per cent is payable in SDRs or other acceptable reverse assets and the remainder in the members own currency. Quotas, which reflect member’s relative size in the world economy, are normally reviewed every 5 years.

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Regional Development Banks
International Development Banks which serve particular regions, for example the African Development Bank or the European Bank for Reconstruction and Development.

Remittances are monies sent from one individual or household to another. International remittances are those sent by migrant workers who left their home country. Domestic remittances are those sent by migrant workers who left their home village or town to work elsewhere in their home country (e.g. rural-urban migration; sometimes also referred to as national remittances). Communal or collective remittances are monies sent by migrant associations or church groups to their home communities. Typically remittances are in cash rather than goods. Imports or goods purchased on location are, however, also common.

Repayments on loan to IMF.

Resettlement Plan
Interest and principal payment on an IMF loan.

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Safeguard Policies
These address environmental social rural and legal issues of Bank operations. They affect the quality of all Bank products and services.

Scaling up
Identifying the most effective ways to channel additional resources in order to maximise impact on the MDGs.

Second Generation Reform
Reforms imposed via IMF programmes which focus on refining structural aspects of the economy to achieve macroeconomic stability.

One of the areas of recipient countries’ economic or social structures that aid is intended to support. DFID categorises its aid into eight broad sectors: Economic, Education, Health, Governance, Social, Rural Livelihoods, Environment and Humanitarian Assistance.

Sector wide approaches or sector investment programmes
A sector wide approach is a process that entails all significant donor funding for a sector supporting a single, comprehensive sector policy and expenditure programme, consistent with a sound macro-economic framework, under recipient government leadership. Donor support for a sector wide approach can take any form ­project aid, technical assistance or budgetary support ­ although there should be a commitment to progressive reliance on government procedures to disburse and account for all funds as these procedures are strengthened.

Sectoral Investment Programme (SIP)
Programmes of reforms focused on restructuring a particular sector if the economy to encourage growth.

Security Sector
The security sector is defined as those who are, or should be, responsible for protecting the state and communities within the state. This includes military, paramilitary, intelligence and police services as well as those civilian structures responsible for oversight and control of the security forces and for the administration of justice.

Service Delivery Agreement
A document which defines the outputs and subsidiary targets which will contribute towards delivery of the targets in the Public Service Agreement.

Small and Medium Enterprise (SME)
Definitions vary, but generally, enterprises employing between 50 and 250 workers, are commonly termed to be SMEs.

Social Capital
Refers to the institutions relationships attitudes and values that govern interactions among people in society and contribute to economic and social development

Social Safety Net
Public sector measures to protect the poor and vulnerable including public work schemes, unemployment benefits, food securities, etc.

Southern Countries
Encompasses what is commonly termed as ‘developing’ and ‘less developed’ countries of Africa, Asia and Latin America.

Special Drawing Rights (SDRs)
The SDR is the IMF’s unit of account. IMF voting shares and loans are all denominated in SDRs. The SDR serves as the unit of account for a number of other international organizations, including the World Bank. The SDR is also used as an international reserve asset, to supplement members’ existing reserve assets (official holdings of gold, foreign exchange, and reserve positions in the IMF).

Spending Review
A fundamental re-evaluation of priorities, objectives and targets by the UK Government, which establishes a three year planning cycle, including spending plans, for all departments. The 2000 Spending Review runs from 2003/04 to 2005/06.

Stand-by Loans
Non-concessionary IMF loans for stabilisation programmes.

Strategies for Achieving the International Development Targets (or Target Strategy Papers)
These DFID papers set out the key development challenges to be addressed in order to achieve the Millennium Development Goals. The papers also explore the action needed by the international community, developing country governments, civil society, the private sector and others in order to achieve the targets. Finally the papers explain what DFID will do to contribute to that effort.

Strategic Partnership for Africa (SPA)
Major coordinating instrument for aid to Africa. Group of bilateral donors and multilateral lenders who provide resources to African countries.

Structural Adjustment Lending
Loans from IMF or World Bank for balance of payment assistance or budget support with attached policy or structural reform conditions.

Structural Adjustment Loans (SAL)
Large loans made by the World Bank or IMF to developing countries which may carry strict financial and budgetary obligations or required reforms intended to open recipient countries to private investment and increase the recipient’s competitiveness in the global economy. Reforms are usually orientated towards liberalisation, privatisation and reduction in government expenditure.

Structural Adjustment Participatory Review Initiative (SAPRI)
Joint World Bank, government and civil society initiative to review the impact of adjustment lending in seven borrowing countries.

Structural reform plan
Key tools for holding departments to account for the implementation of Programme for Government commitments

Supplemental Reserve Facility (SRF)
A facility to provide financial assistance for countries experiencing exceptional capital account problems resulting from a sudden and disruptive loss of market confidence.

IMF monitoring of member countries’ macroeconomic policies and financial sectors.

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Technical Co-operation/Technical Assistance
Technical co-operation is the provision of advice and/or skills, in the form of specialist personnel, training and scholarship, grants for research and associated costs.

Technical Cooperation
Includes both (1) Grants to nationals of aid recipient countries receiving education or training at home or abroad and (2) Payments to consultants, advisors and similar personnel in recipient countries.

An installment of a loan: IMF loans are disbursed incrementally to ensure adherence to attached conditions.

Transnational Corporation (TNC)
Companies which operate in more than one country but retains ownership and control in its home country.

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UK Aid transparency guarantee
Commits DFID to publish detailed information about new DFID projects and policies in a way that is comprehensive, accessible, comparable, accurate and timely

United Nations Framework Convention on Climate Change. This represents the international community’s collective response to climate change. It was established at the 1992 UN Conference on Environment and Development which was held in Rio.

Untied aid
Aid that is given where donors do not insist that it is spent on goods and services from the donor country, in favour of giving unrestricted access to those who can compete on best price, quality and service.

User Fees
Charges for primary education and health care at the point of use, user fees were introduced in poor countries by the World Bank and other donors in the 1980-90′s to tackle severe under-funding. The financial burden of user fees restricts access to basic resources and the World Bank states that it no longer supports them but is so far unable to eliminate them despite pressure to do so.

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World Bank
The term World Bank is commonly used to refer to the International Bank for Reconstruction and Development and the International Development Association. Three other agencies are also part of the World Bank, the International Finance Corporation, the Multilateral Investment Guarantee Agency and the International Centre for Settlement of Investment Disputes. Together these organisations are referred to as the World Bank Group.

World Bank Board
A committee of highly-ranked individuals who make final decisions regarding all relevant issues on behalf of the institution.

World Bank Institute (WB1)
Capacity development arm of the World Bank which delivers training and knowledge-sharing activities

World Commission on Dams (WCD)
The WCD was an independent, international, multi-stakeholder process which addressed the controversial issues associated with large dams, and whose report was released in 2000: “Dams and Development: A new framework for decision-making”.

World Development Report (WDR)
WDR is the World Bank’s major analytical publication, printed annually.

World Trade Organisation (WTO)
Multilateral trading organisation comprising of 142 countries (as of July 2001) who accede to four major treaties governing almost every area of trade. Ascension into the WTO binds all members to all treaties and all provisions within the treaties (subject to a few minor exceptions) although grace periods are granted to individual members states as to when implementation of treaty provisions take place. The four main WTO agreements are: the General Agreement on Tariffs and Trade (GATT); the General Agreement on Trade in Services (GATS); Trade-Related Intellectual Property Rights (TRIPS); and Trade-Related Investment Measures (TRIMS).

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