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UK government launches globalisation strategy

6 February 2001

The UK white paper on globalization – endorsed by the entire UK Government – was published in December. The report contains some useful recommendations, but promises few specific actions. In a submission to the International Development Committee, Forest People’s Programme commented that “our overall impression of the white paper is that it is strong analytically in identifying the obstacles to effective poverty reduction, but either weak or vague regarding concrete strategies.

The paper identifies foreign private capital flows as “an essential element of a strategy to speed up sustainable development and poverty reduction”, although it notes that only a small proportion of these flows are invested in activities which benefit the poor. The paper observes that, “It is essential therefore that reforms to attract financial flows be complemented by other reforms. The paper suggests that “road maps” should be produced to guide countries on the speed of capital account liberalization and associated reforms. It is not clear what these will include or who will produce them. To take forward work on codes and standards in developing countries, the government will establish a new technical assistance facility.

Whilst noting that “IMF programmes should take better account of their impact on the lives of the poor”, the paper says the UK government does “not agree with those who argue that the IMF‘s role in low income countries should pass to the Bank”, and “we also believe that there is an important role for IMF medium-term lending in middle income countries in order to tackle deep-rooted structural reform.”

The government has committed to link its bilateral Country Strategy Papers to the Poverty Reduction Strategy Papers, and “will continue to encourage the World Bank and IMF to make the necessary changes to their own structures and working methods in a way consistent with their commitment to the PRS process.”

Acknowledging that environmental degradation can harm long-term development prospects, the paper observes that, “it is important that [Poverty Reduction Strategies] are sustainable and integrate environmental concerns. The World Bank needs to strengthen its capacity to take account of sustainable development in supporting poverty reduction strategies. And the IMF must be aware of these linkages in designing their programme.”

The Global Environment Facility is identified as a good example of cooperation on international development. The paper proposes a 50 per cent increase in GEF resources.

Finally the paper suggests a number of reforms to give developing countries a more “effective voice” in international institutions, including:

  • the IMF should make more effort to share analysis and build capacity for dialogue with developing countries;
  • the relationship between the Multilateral Development Banks’ boards and managements should be improved;
  • there should be open and competitive processes for selecting heads of the IFIs.

Eliminating World Poverty: Making Globalisation Work for the Poor

For a copy of the Forest Peoples Programme submission, email FPP

NGO responses