The G8‘s mandate has been seriously questioned in recent months, but this has not stopped G8 ministers setting new directions for the World Bank and IMF. G8 finance ministers and central bank governors welcomed IMF moves on conditionality, evaluation and collaboration with the World Bank. Their report suggested that MDBs “should concentrate on core social and human investment such as health and education, enhancing growth and raising income per capita. Selectivity, accountability and a focus on results are key principles.” It states that MDBs should:
- strengthen project design and evaluation, to measure development effectiveness and results;
- establish or improve independent mechanisms to ensure compliance of project proposals with policies and procedures;
- strengthen or establish inspection mechanisms reporting directly to their Boards;
- adopt a more open policy on information disclosure by making draft and final key documents available to the public;
- establish more transparent budget processes;
- review internal organisation and take concrete steps to improve operational effectiveness, in particular at the World Bank;
- prepare a joint report on global public goods by the end of 2001.
The G8 Finance Ministers’ July 2001 statement called for the IMF to facilitate the opening up of capital accounts. This is the strongest public statement since plans to extend the Fund’s mandate to cover capital accounts were shelved after the Asia financial crisis. The statement “calls on the Bretton Woods Institutions to provide support and expertise to countries seeking access to international capital markets”, and to encourage “the IFIs to further coordinate and extend technical assistance on liberalisation-related topics”. The statement also raises the spectre of a new multilateral investment agreement, “a stable and non-discriminatory investment regime could be brought about and maintained through the establishment of a high-standards framework of investment rules.”
In contrast, ministers attending the G15 summit in Jakarta in May heard Mahathir Mohamad, Malaysian Prime Minister, condemn the IMF for losing sight of its original purpose, “It has become all too clear that the IMF is more a political instrument than one for financial rehabilitation. The highly questionable value of free and unregulated markets is still being touted as the ideal which must be adhered to at whatever cost. The ideology of market freedom, it seems, is more important than the well-being of human society,” he added. Malaysia will host a meeting of G15 experts in the next few months that will push ahead with a commitment to take a more proactive role in the financial rehabilitation process.
Franck Almaric, of the Society for International Development in Rome, commented “the G8 proclaims itself to be the political forum governing the global organisations managing the present form of globalisation, including the IMF, the World Bank and the WTO. But these topics should be discussed elsewhere [such as] the UN meetings on Financing for Development”.
The World Development Movement commented that the G8 leaders had “adopted the campaigners’ language but continued to push the ‘free-market’ model that many campaigners see as the root of today’s growing inequality between rich and poor. Thousands of peaceful protesters were in Genoa calling on leaders to tackle the plight of the poorest countries. Whatever the official spin, their voices have gone unheard, drowned out not just by the violence but also by the platitudes of the leaders.”
G8 Information Centre South Investment Trade and Technology Data Exchange Center
