World Bank-IMF spring meetings 2012 (Bretton Woods Project)

Ahead of the 2012 World Bank-IMF spring meetings, a meeting between UK NGOs and the UK executive director to the IMF Alex Gibbs was held on 10 April. A meeting between UK NGOs, DFID and the UK alternate executive director to the World Bank Stewart James took place on 6 February.

Overview
Background papers: Development Committee
Background papers: IMFC
Highlights of ministerial meetings and communiqués
Highlights of civil society meetings

1. Overview

The 2012 spring meetings of the World Bank and IMF will take place from 18 to 21 April in Washington, DC. You will be able find links below to analysis of the communiqués as well as notes of some of the civil society and official meetings, as they become available.

There will clearly be two big topics on everyone's minds at the meetings: The new World Bank president, and the still bubbling financial crisis in the eurozone. With expectations that the new President will formally beselected and announced on Monday 16 April, the week will start off with a flurry of attention on the appointee. Nearly everyone expects the stitch-up between the US and Europe to continue to function, meaning that the US nominee Jim Yong Kim will be picked. That speculation was confirmed at midday on Monday the 16th when Kim was formally announced as the next president. Noticeably the press release did not include the word "consensus" to describe how the Bank board took the decision. Much of the debate, for example on the blog worldbankpresident.org, focussed on how the the two developing country nominees (José Antonio Ocampo and Ngozi Okonjo-Iweala) were much more qualified for the job but were likely to lose out. A number of contributions also looked at the agenda for the next World Bank president, including a very long list of items that NGOs want to see reformed.

On the IMF side of things the main discussion will be about the renewed urgency over sovereign debt in the eurozone. With bond yields spiking again the week before the meetings, eyes have again turned on Italy, Spain and other eurozone members to see if they can finally do something about the crisis. The problem continues to be that the measures taken by the European institution in conjunction with the IMF are view as both insufficient to resolve the debt problems and socially destructive in the borrowing countries, including Greece, Ireland and Portugal. The IMF chief Christine Lagarde has been on a round the world tour for more resources, to complement the new money being committed by European central banks, but is coming up empty handed in many places. The background there is continued friction over what Brazil calls the "currency wars", but is really a problem of floods of capital flowing into emerging markets. The IMF is still trying to devise its "institutional view" on capital account regulations, but the different shareholders are preventing agreement despite the IMF staff and many academics settling on the need for more pragmatic policies to regulate the capital account.

A good portion of the discussion may also focus on some of the new items on the World Bank's agenda - such as 'green growth' and the need for a safeguard's review. In preparation for the UN Rio+20 'Earth Summit' in June, the Bank is due to release a new report, 'Inclusive Green Growth: The pathway to sustainable development' in May, and a conversation between the Bank president Robert Zoellick, Fund chief Christine Lagarde and UN Secretary-General Ban Ki-Moon is expected to take place during the meetings. While the previously announced but delayed safeguards review is not on the official agenda as the new president is expected to take the lead, there will be a flurry of CSO activities to strategise and ensure the review is not dropped off the agenda. CSO concerns about the lack of safeguards in the newly approved Bank lending instrument Programs-for-Results, as part of the Bank's 'modernisation' process, has led to further concerns around where the Bank intends to go on this subject.

Two topics which we know will be on the Development Committee agenda (see below) are leveraging the private sector and social protection. The concept of "leverage" is a fuzzy one, and a new briefing by the Bretton Woods Project (available shortly) tries to demystify its use. But the clear indication is a feeling by the Bank that it wants to work more closely with private financiers who do not have a mandate for poverty reduction, economic growth, or human development. This has prompted an array of criticisms, in relation to leveraging climate finance, investing in private equity funds, and financial intermediaries - with particular focus on land acquisition and use of tax havens. The Bank recently drafted its "social protection and labour strategy for 2012-22" amid controversy, but is now pursuing an agenda which was first broached at the G20 when it was hosted by Korea in 2011 - social safety nets. The Bank is pitching itself as the key provider of knowledge and advice about how to structure safety nets that protect poor and vulnerable people in a crisis.

2. Background papers: IMFC

The papers for the spring 2012 International Monetary and Finance Committee meeting, scheduled for Saturday 21 April, will be posted here as they become available. They will be available on the IMF's website.

The agenda included:

Global economic and financial prospects
The early warning exercise
Systemic economies - do policies add up to growth and jobs?
Emerging markets, the Arab spring, and low-income countries
Institutional issues (related to IMF)

The background papers included:

Background papers: Development Committee

The papers for the spring 2012 Development Committee meeting, scheduled for Saturday 21 April, were posted online on Monday the 16th. They are all available on the World Bank's website. We expect the agenda has three items and three further background papers:

Agenda items

Opening statements by the heads of institutions on recent corporate and global development issues
Leveraging the private sector for development
Safety nets work: During crisis and prosperity

Background papers

Update on the Bank's business modernization
Global Monitoring Report (not available yet)
Appointment of development committee members

3. Highlights of ministerial meetings

Below we will bring the highlights from the communiqués at the spring meetings, including the G24, G20, IMFC and Development Committee. You will also be able to find detailed coverage of all communiqués in our dedicated article.

19 April : G24 communiqué (deeper analysis, original document).
Summary: The G24 used unusually strong language on the IMF's policy work on capital account policy, saying they "have strong reservations on the integrated approach proposed by IMF staff and insist that it should not result directly or indirectly in new obligations by members." Interestingly they noted the "need for further study of sovereign debt restructuring mechanisms." The G24 statement has only a short statement calling for the IMF to have "the necessary resources", but qualifies this by saying that contributions "must be anchored in a firm commitment to governance reform." On the World Bank side, the G24 statement called for the Bank to increase in size, and for the IFC to support greater private sector involvement and more public-private partnerships in infrastructure. On governance issues, the G24 indicated it wanted the World Bank presidency selection process to improve further and called for IMF governance reform to proceed at the agreed schedule, including demanding a third African IMF executive board chair. See our full analysis for further background.

20 April : G20 communiqué (deeper analysis, original document).
Summary: The G20 noted a continued difficult economic context, and that more needs to be done to make progress on jobs and growth. Most significantly, agreement was made on increasing the IMF resources to $430 billion, which includes commitments from emerging economies, such as China and India. It reaffirmed its commitment to the World Bank and IMF quota reform, but stopped short of the G24 demand that no emerging markets or developing countries lose voting shares. It welcomed the IMF surveillance initiative, but made no specific mention of the potential controversy over the IMF's "institutional view" on capital account regulations. On environmental issues, it agreed to continue work to phase out fossil fuel and to integrate "green growth" into "structural reform agendas", through "voluntary self reporting". It also ramped up its involvement in climate finance, by setting up "a G20 study group" on climate finance and the Green Climate Fund.

21 April : IMFC communiqué (deeper analysis, original document).
Summary: This year's statement was rather short and had very limited new information. The G20 statement from the day before had already broken the main news from the meetings, about the amount of new resources to be made available to the IMF. The ministers generally advised contractionary fiscal policy but loose monetary policy, while asking the IMF to monitor the unwanted spillovers from loose monetary policy. However, the IMFC statement says nothing about the controversial ongoing IMF policy work on capital flows which is supposed to come to the IMF board in the summer, indicating inability to come to consensus. The statement reiterated existing commitments on governance and surveillance while not promising anything new, for example no now studies on sovereign debt restructuring.

21 April : Development Committee communiqué (deeper analysis, original document).
Summary: The communique contained few surprises, but reiterated the Bank's increased focus on food security, fragile states, the private sector as a driver of development and it's increasing interest in "green growth". Unsurprisingly it failed to address unclarities and concerns around many of these topics, including growing questionning of what 'leveraging' of private finance really means and its impact. In terms of green growth and the Bank's modernisation agenda, it failed to mention the Bank's lack of an energy strategy and the delayed safeguards review. The incoming World Bank president, Jim Yong Kim, was welcomed, but no reflections were made on the selection process.