The UK's role in the World Bank and IMF Department for International Development and HM Treasury
Briefing||13 March 2013|
The UK's policy lines on World Bank and IMF issues are formally decided by the Department for International Development (DFID) and the Treasury, respectively. Within DFID, the International Financial Institutions department (IFID) leads in devising the organisation's position on these institutions (see below). In the Treasury, the International Finance department is responsible for preparing advice on the policy issues and specific country programmes brought before the Board of Directors in Washington.
The top UK representatives at the IMF and World Bank are the Chancellor of the Exchequer, Rt Hon George Osbourne MP, and Secretary of State for international development, Rt Hon Justine Greening MP. They are known as UK governors to the Fund and Bank, sitting on the ministerial committees which meet in Washington twice a year to decide on overall strategic direction for the institutions. The UK is the fourth-largest shareholder in both the World Bank and the IMF, holding 4.3 percent and 4.8 percent of votes, respectively. For comparison the US is by far the largest shareholder with 16.4 percent and 16.85 percent vote shares, respectively. Following completion of the latest round of funding for the World Bank's International Development Association (IDA), the UK will be the single largest donor to the World Bank.
The executive directors and the UK delegation to the Bank and Fund
On a day-to-day basis the governors delegate power to executive directors (ED), civil servants seconded to Washington for two or three years who serve on the boards of both the Bank and Fund. Before 2008, there was a single post which covered both institutions, most recently held by Alex Gibbs. Since September 2008, there are separate posts for the two institutions (as is the practice with all other countries except for France which also has a single post for both institutions). The post of UK ED to the World Bank is currently held by Gwen Hines while Steve Field is ED to the IMF. In other countries separate EDs to the Bank and Fund may be political appointees. The UK executive directors hold regular meetings with NGOs in the UK in advance of the spring and autumn meetings of the Bank and Fund.
The EDs head the UK delegations to the Bank and Fund (UKDels), based in offices in the Bank and Fund HQ respectively. The ED for the IMF is supported by an alternate ED from the Bank of England (Christopher Yeates), three UK Advisers and one locally hired assistant. The ED for the Bank is supported by an alternate from the UK Treasury (Stewart James), three UK advisers and two locally hired assistants. To help ensure coherence and coordination in UK positions, the six 6 advisers cover the same country issues across both the Bank and Fund. Either the EDs, their alternates or advisers represent the UK in the regular meetings of the World Bank and IMF boards and their sub committees.
The policy lines taken at Bank and Fund board meetings are formally decided in London by the Treasury or DFID which then instruct the UK Delegation. Since the boards operate on the principle of consensus, there is no official record kept of the positions taken by EDs and no way for citizens to hold their representatives accountable. Limited information is given on the positions taken by the UK ED in the annual reports to Parliament, The UK and the IMF for the Treasury Select Committee, and the UK in the World Bank for the International Development Committee.
World Bank policy - DFID policy lead
DFID's International Finance division is headed by Shaila Khan. The division has three departments, but for World Bank policy the most important is the International Financial Institutions Department (IFID) which is headed by Richard Teuten. IFID seeks analytical support from country offices or policy division teams (such as the climate and environment group, education for all or extractive industries teams). Out of total DFID spending of £4.6 billion in 2005-6, just over 10 per cent was spent directly on the IFIs. An unspecified additional amount is spent on country-level work, policy programmes and technical cooperation conducted jointly with the BWIs. (see below for a breakdown of IFID staff and their roles).
The other two departments within International Finance are the Private Sector Department, headed by Gavin McGillivray and the Global Funds Department headed by Simon Bland.
PSD covers, among other elements of private sector finance:
GFD covers the financing, administration and corporate governance of:
IMF policy - HM Treasury lead
Within the Treasury, the International and EU (IF) directorate holds ultimate responsibility for all international issues. On international finance it has headed by Shona Riach since early 2012. Within the directorate, the Global Economics, Coordination and Strategy team is responsible for preparing advice on a range of international economic policy issues and institutions - a merging of the previous global economic team with the G20/G8 strategy and coordination team. . The team is headed by Vanessa MacDougall. Within the Global Economics team sits the IMF team, which is responsible for policy and programme issues brought before the board of the IMF. It is currently headed by David Kinder.
Parliamentary oversight of the UK's role in the BWIs is provided ad-hoc through parliamentary questions, and more formally through select committees which oversee both DFID and/or the Treasury. A select committee inquiry may last for several months and give rise to a report to the House; other inquiries may simply consist of a single day's oral evidence which the Committee may publish without making a report. Evidence from non-UK civil society sources is now actively encouraged by the development committee for their hearings held each November. The political make-up of the committees roughly reflects the strength of the various parties in the House.
The International Development Select Committee (IDSC), chaired by Liberal Democrat MP Malcolm Bruce, holds hearings on a range of development issues, as well as an annual hearing on the outcomes of the autumn meetings of the WB and IMF. The Committee usually calls on the Secretary of State for International Development to give evidence, and in recent years has allowed NGOs to do the same. Many civil society organisations have contributed written evidence over the last several years.
The Treasury Select Committee analyses UK policy in the Fund, holding evidence sessions in the past with the IMF's managing director, the UK ED and NGOs. Since 2001 it had requested the Treasury to produce an annual report, but it is unknown whether the Treasury will continue to do so under the new coalition government that took over in Spring 2010. The Treasury Committee is chaired by Andrew Tyrie MP, Conservative. In 2006 it completed a report, Globalisation: the role of the IMF, for which the Bretton Woods Project gave written evidence. In 2009 the Project also gave oral and written evidence on an inquiry into the international dimensions of the banking crisis.
The UK and the World Bank-administered Climate Investment Funds
The UK is a key player in the Climate Investment Funds, which are administered by the World Bank. These funds, which currently consist of the Clean Technology Fund and the Strategic Climate Fund (Pilot Program for Climate Resilience, Forest Investment Program and Scaling Up Renewable Energy Program in Low Income Countries) were launched at the G8 in July 2008 (see Update 61, CIFs Monitor). So far, $7 billion has been committed, of which over £1 billion is from the UK, including £767 million in fast start climate finance from the UK's International Climate Fund (formerly the Environmental Transformation Fund). Funding is provided from DFID, the Department of Energy and Climate Change (DECC) and Department for Environment, Food and Rural Affairs (DEFRA), and the climate and low carbon development teams from DFID and DECC are playing a key role in shaping UK policy in relation to these funds.
DfID's World Bank Institutional Strategy Paper: DFID produces Institutional Strategy Papers (ISPs) about every three years to identify how to achieve its objectives via the multilateral institutions. The most recent DFID World Bank ISP was re-drafted in autumn 2004. DFID has failed to live up to its commitments to review the progress made by the Bank on its ISPs every twelve months. The ISP includes sections on: improving the depth of analysis for PRSPs, aligning Country Assistance Strategies with achievement of the Millenium Development Goals, and improved cooperation with other donors, especially the UN.
DFID's public service agreement:This sets out how DFID is achieving its main targets and objectives, showing how they link to the Millennium Development Goals.
Objective notes for the spring and annual meetings of the Bank and Fund: Innovative - if limited - joint briefing from DFID and Treasury laying out UK objectives for the main points of discussion on the agenda of the meetings. In 2004 during the IDSC hearing, the Secretary of State for International Develpment agreed that DFID would post the notes at least 10 working days in advance of the meetings.
Annual reports on the UK and the IMF:Following pressure from NGOs and MPs the UK Treasury produced an annual report setting out the main policy debates in the IMF and the UK government's role from 2003-2009. However, when a new government came into power in 2010, the reports ceased to be produced. DFID also produces a simlar annual report on the UK's involvement with the World Bank.
Other key documents include ministerial statements in advance of the spring and autumn meetings of the Bank and Fund; DFID departmental reports and the 2000 Globalisation White Paper which sets out the policy priorities of the entire British government on international policies and institutions.
Key contacts at DFID - IFID, PSD, GFD and Climate and Environment Group
World Bank Team at IFID
Debt and IMF Team at IFID
RDBs Team at IFID
Climate and Environment group at DFID
Climate change adaptation
Low Carbon Development
Climate Frameworks and Carbon Markets
Key contacts at HM Treasury - International and Finance Directorate
Global Economics, Coordination and Strategy team within International Finance department
International Development and Climate Change team within International Finance department
UK Delegation to the IMF and World Bank
World Bank team
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Published: 13 March 2013 , last edited: 26 April 2013
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