US, Europeans trade blows over lack of progress on Bank, Fund governance reform

News|Bretton Woods Project|21 July 2003|update 35|url
print|email|bookmark

In late June it emerged that the US government was planning to block progress in the official discussions on reform of World Bank/IMF governance. The US Executive Director prepared a statement for a Board meeting arguing that measures to rebalance the Bank/Fund boards "are not necessary". Just three weeks before, the World Bank had tabled a document stressing that "political will does exist - as reflected in the Development Committee's communiqué and the statements of many Ministers at the Spring Meetings". The paper outlined options including raising the voting shares of developing countries and adding an extra Executive Director to represent African countries. On the latter a US Treasury spokesperson commented "If any of the nations which are over-represented at the bank want to cede their seats to developing countries, we would happily support it". This presumably referred to the Europeans, though the US government does not appear to want to pick a fight on the issue.

Activists in over ten countries tried to shore up this political will by contacting the press and their decision-makers to press them to challenge the US and push for changes to the deeply inequitable governance of the Bank and Fund. Many governments responded, but the outlook for the further Board meeting due to be held at the end of July was bleak. It looks likely therefore that the ministers who will gather for the Bank/Fund Annual Meetings in mid-September will have nothing to announce. This means that they will have reneged on their promises at international summits including the Financing for Development and World Summit on Sustainable Development.

One issue which was not discussed in either the World Bank paper or the government positions at the Board was the selection of the next Bank president, a matter which is becoming urgent as Wolfensohn, the current president, is due to retire in 2005. Wolfensohn, however, told the Washington Post in June that he would think seriously about staying on.

This text may be freely used providing the source is credited.

This page is: <http://brettonwoodsproject.org/art.shtml?x=16567>

Published: 21 July 2003 , last edited: 17 November 2008

Viewings since posted: 3198

Special coverage of Bretton Woods II, updated daily with the latest news and analysis: www.brettonwoodsproject.org/BW2/