Chancellor Gordon Brown
Chair, International Monetary and Finance Committee
IMF
700 19th Street NW
Washington DC 20431
USA
7 August 2000
Proposal For A Transparent And Independent Evaluation Office
Dear Gordon Brown,
We are writing to you, as Chair of the International Monetary and Finance Committee, to express our concern about the proposed structure for the Independent Evaluation Office (IEO) of the IMF and to suggest alternative features which are essential for ensuring an effective, transparent IEO.
Firstly, we would like to express our strong support for the creation of an IEO, this is an important step for ensuring more effective transparency and governance of the IMF. However, we are concerned that current proposals could undermine the independence of the IEO and its effectiveness.
Concerns with the current proposal
1. IEO appears to be marginalised with respect to internal evaluation mechanisms.
The current proposal continues to emphasise internal evaluation. This is problematic because it suggests that the IEO will simply focus on those issues not addressed through current evaluation procedures. Whilst internal evaluation can be important, particularly for staff learning, IMF internal reviews are often regarded as biased by those outside and fail to address many of the key concerns of external stakeholders.
Unless credible independence and prestige is accorded to the new unit the potential is for it to simply be regarded as a failed public relations exercise designed to create the appearance but not the reality of IMF reform. This would be unfortunate because the IMF has much to gain from demonstrating that it is willing to examine its policy prescriptions and operations in public. Moreover, it will be to the IMF‘s loss not to have an effective IEO which is able to contribute to the improvement of the IMF‘s operations and to the further development of a learning culture in the Fund.
2. The unit will not be sufficiently independent of the IMF board and management.
It is proposed that the IEO‘s work plan will be approved by the Board, who can presumably modify or even reject elements of it. This is particularly worrying because the current proposal emphasises that the IEO should complement internal evaluations. There is a danger that the internal evaluators (Policy Development and Review Department and the Office of Internal Audit) could influence or marginalise the IEO‘s work plan by claiming that IEO-proposed evaluations do not add value to their own proposed or completed evaluations.
There is a grave danger that giving the Board such control will be viewed by those outside the IMF as a means of ensuring that the IEO does not undertake evaluations of sensitive issues, particularly since the PDR department is very influential with the Executive Board.
3. Agreeing a work programme a year in advance limits flexibility.
Agreeing the IEO‘s work programme at the beginning of each year, as is currently proposed, will make the IEO inflexible and will prohibit it from investigating critical issues that may emerge in the context of a loan operation or programme through the course of the year, such as programme breakdowns, civil society unrest associated with specific reform proposals, or legal or parliamentary objections to aspects of a reform programme.
4. The IEO is not being given the remit to evaluate on-going programmes.
Whilst flexibility to respond to unexpected programme interruptions etc is important it is also vital that all IMF programmes are in principle subject to external evaluation. Unlike the World Bank’s Operations Evaluation Department, there appears to be no role in the current proposal for the IEO to carry out this function. The IEO should have the remit and sufficient flexibility in its work programme to make evaluations as it sees fit.
Whilst the IMF staff argue that there is implicit evaluation of each preceding programme when a new programme is drawn up, it is not clear on what basis these evaluations are made nor are their findings made public. Moreover, it is unclear to what extent staff learn from these internal reviews, for example there have been instances where unfulfilled conditions have been inserted into new programmes time after time, apparently without any analysis of why they were not implemented in the first place. Also, there appears to be no systematic monitoring of whether programmes achieved their objectives (although PDR has carried out occasional ad hoc studies), and even less analysis of the social and environmental impacts of programmes.
Amendments to the proposed structure
In the light of these concerns we urge you to make the following amendments to the proposed structure:
1. Ensuring independence and status of the IEO
The Director of the IEO must have sole responsibility for deciding the IEO‘s work programme for ad hoc reviews, in consultation with his/her staff. The unit must also be sufficiently resourced and staffed so that it can evaluate, on a case by case basis, any completed and interrupted programme, as well as having the capacity to hire consultants for ad hoc reviews.
IMF staff should be required to cooperate fully in all evaluations, which means that the IEO should have free access to all IMF documents, staff should make themselves available to meet with the IEO and should fully respond to all questions asked by the IEO.
The IEO should have complete discretion to establish procedures for deciding when to initiate evaluations, and the scope of the evaluation. All members should be required to cooperate with the IEO and grant permission to the IEO to visit the country if it decides to make such a visit.
2. Mechanisms for securing inputs from those outside the IMF
The draft work programme of ad hoc reviews should be made public so that civil society representatives and the Executive Board can comment before the final programme is agreed. Draft Terms of Reference for each evaluation should be published to allow those outside the IMF to comment and make recommendations. The final terms of reference should also be published.
A mechanism should be established to allow civil society representatives to nominate operational issues, policies or problematic country programmes for review. Each request for review should be investigated and the request and response published. The head of the IEO should take the decision whether or not to undertake a review.
3. Ensuring independence of IEO staff
The director should be appointed by the IMF‘s Board of Directors from a pool of candidates chosen in a transparent and open nomination process. Processes should be established to encourage those outside the IMF to nominate candidates. The list of candidates and their qualifications should be made public.
To ensure her/his independence, the Director should report directly to the IMF board. S/he should be appointed for one non-renewable, 5-year term of office. The status and pay of the head of the IEO should be commensurate with senior IMF management to indicate the importance of the office. The Director should not have worked for the IMF in the past 3 years.
The Director should be responsible for appointing other staff members. Practical experience should be sought in staffing the unit in order to make the reviews as “real world” relevant as possible. A diverse skills mix should be sought in hiring staff, including legal expertise, evaluation/review experience, and knowledge of development and social as well as financial issues. Less than 50% of all staff should be ex- or current IMF staff.
All IEO staff, including the Director, should be ineligible to work for the IMF for 3 years after the term of office ends.
4. Transparency
The current proposal is to publish evaluation reports at the Board’s discretion, with the presumption that they will be published. Whilst we understand that this is to protect against the release of “market sensitive” information, unless there is full disclosure the independence of the unit is at risk.
Instead, all reports, including programme evaluations, should automatically be made public. This would provide for much better learning opportunities than the current internal evaluations because it would stimulate debate and thinking about the cause and solution to the problem programme both inside and outside the IMF. Where necessary market sensitive information should be withheld and released at a later date. Comments by staff and management on IEO reports should also be published in full along with the final report.
All internal evaluation reports, including staff reports on programme implementation, should be made public.
5. Mechanisms and incentives for implementing recommendations
It is vital to ensure that the IEO‘s recommendations are not subordinated in favour of those from internal evaluations or ignored altogether. Therefore, it is imperative that appropriate mechanisms and incentives are put in place to ensure that staff take heed of recommendations accepted by the Board and/or IMF Committee and that the IEO has the capacity to monitor that they are being implemented.
In this regard, the Board should make a public statement on each review identifying which recommendations it is in agreement with, and where it is not, giving the reasons why. The statement should include an implementation plan agreed with the management. The Executive Board should be responsible for monitoring staff compliance with the implementation plan and should report on this to the IMFC.
The IEO should make an annual report to the IMF Committee on the evaluations it has undertaken, to what extent recommendations from previous evaluations have been implemented and verdicts on requests for evaluations made by affected stakeholders. This report should be published.
We hope that you find these recommendations helpful and urge you to take action on all these points. We believe that they are necessary both to ensure the independence of the IEO and to ensure that there is appropriate oversight of its operations. We will be observing the outcomes of the Board and IMF committee meetings to ascertain how they have been incorporated into the IEO proposal.
Yours sincerely,
Bretton Woods Project
Signed on behalf of:
Organisations
Rosaline Costa, Hotline Bangladesh, Bangladesh
Hamidul Haq, Unnayan Shohojogi Team, Bangladesh
Majibul Huq Dulu, Jamuna Char Development Project, Bangladesh
Dr Nazmul Ahsan Kalimullah, National Election, Observation Committee, Bangladesh
Harun ur Rashid, Community Development Library, Bangladesh
Reza Salim, Bangladesh Friendship Education Society, Bangladesh
Saleem Samad, Like-Minded Environmental Actvists Group,, Bangladesh
Hossain Shahriar, Environment & Social Development Organisation, Bangladesh
Father Richard William Timm, CSC, Commission for Justice and Peace, Bangladesh
Magda Stoczkiewicz, CEE Bankwatch Network EU Coordinator, Belgium
Flavia Barros, Rede Brasil, Brazil, Fernando Carvalho, IBASE, Brazil
Roberto Smeraldi, Amigos da Terra – Amazônia Brasileira, Brazil
Pierre Chekem, Partnership, Management and Support Programme, Cameroon
Robert G. Bromley, Ecology North, Canada
Pamela Foster, Halifax Initiative Coalition, Canada
Manuel Chiriboga, ALOP, Costa Rica
Isaac Rojas, COECOCEIBA-FoE Costa Rica, Cost Rica
Ngang Francis Fru, Inades Formation (African Institute for Economic and social development), Cote d’Ivoire
Ricardo Navarro, Friends of the Earth, El Salvador
Peep Mardiste, Friends of the Earth-Estonia, Estonia
Pierre Castella, SOLAGRAL, France
Helene Connor, Ph.D., Helio International, Observatoire mondial de la viabilité énergétique, France, Annick Jeantet, Agir ici, France
Ben Lefetey, Amis de la Terre, France
France Libertes, Fondation Danielle Mitterrand, France
Georges Riffault, L’Antenne de Paris du Rseau Foe et Justice Afrique-Europe, France
Miriam Walther, World Economy, Ecology & Development (WEED), Germany
Leo Saldanha, Environment Support Group, India
Yoko Kitazawa, Pacific Asia Resource Center/ Jubilee 2000 Japan, Japan
Hisako Motoyama, Friends of the Earth-Japan, Japan
Sandra Bagenda, Africa J2000 and Kenya Debt Network (Kendren), Kenya
Fanija Bluma, Green Liberty, Latvia
Laura Frade, Women’s Eyes on the Multilaterals Campaign for the Latin America Region, Mexico
Trasparencia S.C., Mexico
Anna Christie, Concern-Manica, Mozambique
Paulo Cuinica, Joint Oxfam Advocacy Program In Mozambique, Mozambique
Kees Biekart, Transnational Institute, Netherlands
Odile Ruijs, Both ENDS, Netherlands
Johan Frijns, Friends of the Earth International, Netherlands
Yvette Raveneau, Amigu di Tera/FoE Curaao, Netherlands Antilles
Lloyd Narain, Defensa Ambiental, Netherlands Antilles
Suyen Barahona Cuan, Centro Humboldt / FOE Nicaragua, Nicaragua
Ana Victoria Rodriguez, Mujeres para el Desarrollo, Nicaragua
Ryan Hunter, Center for Environmental Public Advocacy, Slovak Republic
Bruno Gurtner, Swiss Coalition of Development Organizations, Switzerland
Christopher Mwakasege, Tanzania Social and Economic Trust (TASOET), Tanzania
Lydia Ochieng-Obbo, Frederick, Francis & Associates, Advocates,, Uganda
Tahar Boumedra, African Society of International and Comparative Law, UK
Barry Coates, World Development Movement (WDM), UK
Corner House, UK
Kelly Currah, World Vision, UK
Karen Joyner, Christian Aid, UK
Rachel Marcus, Save the Children UK, UK
Duncan McLaren, Friends of the Earth (England, Wales and Northern Ireland), UK
Geoff Nettleton, Philippine Indigenous Peoples Links, UK
Henry Northover, CAFOD, UK
Partizans, UK
Andrew Simms, New Economics Foundation, UK
Juliette Beck, Global Exchange, USA
Dennis Brutus, Jubilee 2000, USA
Aldo Caliari, Rethinking Bretton Woods Project, Center of Concern, USA
Rita Clark, Nicaragua-U.S. Friendship Office, USA
Marie Clarke, Quest for Peace/Quixote Center, USA
Dan Cross, Western New York Coalition for Worldwide Economic Justice, USA
Marie Dennis, Maryknoll Office for Global Concerns, USA
Deacon Arthur C. Donart, Justice and Peace Commission, USA
Soumya Ganapathy, Physicians for Human Rights, USA
Julia Greenberg, American Jewish World Service, USA
Steve Harrison, White River Central Labor Council and Jobs with Justice Delegate IBEW, USA
Doug Hellinger, The Development GAP, USA
Katherine Hoyt, Nicaragua Network, USA
Rev. Douglas B. Hunt, Ph.D., Network for Environmental and Economic Responsibility, USA
Antonia Juhasz, American Lands Alliance, USA
Hal Kane, Pacific Environment & Resources Center, USA
Lawrence Wolfgang Kellner, Project Wrangler, USA
Patricia Krommer CSJ, Humanitarian Law Project, International Educational Development, Inc, USA
Andrew C. Mills, Witness for Peace-MidAtlantic, USA
Kevin Murray, Grassroots International, USA
Michael Prokosch, United for a Fair Economy, USA
Rosanne Rustemeyer, U.S. Catholic Mission Association of Washington, DC, USA
Susan Saudek, Policy Associate SHARE Foundation, Washington DC USA
Matthew Siegel, Preamble Center, USA, Dale Sorensen, Marin Interfaith Task Force on Central America, USA
Jim Szymecki, Pax Christi, USA
Sister Mary Tiernan, Congregational Justice Commission, Sister’s of the Holy Cross, USA
Robert Weissman, Essential Action, USA
Carol Welch, Friends of the Earth US, USA
Godfrey Simon Bvute, African Forum and Network on Debt and Development (AFRODAD), Zimbabwe
ACADEMICS
Gerry Helleiner, University of Toronto, Canada
Michael Zelmer, University of Victoria, Canada
Dr. Alfred Escher, Attorney at Law, Germany
Rama Baru, Jawaharlal Nehru University, India
Mac Darrow, European University Institute, Italy
Ellen Hey, Professor of International Natural Resources Law, University Rotterdam, Netherlands
Prof. Silvo Devetak, Slovenia
Riekie Wandrag, University of the Western Cape, South Africa
Beatriz Levi, Associate Professor, Department of Geology & Geochemistry, Stockholm University, Sweden
Professor Philip Arestis, South Bank University, UK
Paul Broome, University of London, UK
Panicos O. Demetriades, Professor of Financial Economics, University of Leicester, UK
Tony Killick, Senior Research Associate, Overseas Development Institute, UK
Dr Oliver Morrissey, School of Economics,, University of Nottingham, UK
Katarina Patomaki, Network Institute for Global Democratisation (Helsinki & Nottingham), UK
Ngaire Woods, University College, Oxford, UK
Prof. Danny Bradlow, American University, USA
Lois Martin, Associate Professor, Salem State College, USA
Professor C.P. Otero, University of California at Los Angeles, USA
Herman Schwartz, Washington College of Law, American University, USA
Dr Douglas E Wingeier, Emeritus Professor of Practical Theology, Garret-Evangelical Theological Seminary, USA
INDIVIDUALS
Greg Andresen, Australia
Grant Harper, Australia
Alexis Kontos, Canada
Don Angelo, USA
Charlie Hinton, USA
Edwin Reynolds, USA
David E.Gibson, USA
Mark M. Giese, USA, Jerry Mastriano, USA
Ed Reynolds, USA
David Rohrlich, USA
Leo R. Sandy, USA
Terry Stone, USA
Vijaya Thakur, USA
Beth Yocam, USA
Mwansa J Musonda, Consultant – Trade and Economic Development Issues, Zambia
cc:
All International Monetary and Finance Committee members
All IMF Executive Directors
Horst Köhler, IMF Managing Director
