IFI governance


WB/IMF Annual Meetings 2002

20 September 2002

Latest report from Washington

Demonstrators kick-off week-end of protests

Protests started in Washington DC denouncing IMF and World Bank policies. Cycling protestors formed a “critical mass” to slow down traffic. Various tactics were expected to be used throughout the week-end, including a rally and a march on September 28th.

Activists have staged several actions to highlight the role of the World Bank. One involved a Trojan Horse ‘returned’ to the Bank’s headquarters, as “The World Bank has been sending a ‘Trojan Horse’ to the Global South labeled ‘sustainable development,’ but inside is riding the Bank’s failed version of development: oil, mining, and gas projects that destroy the environment and violate the rights of communities”, stated the Sustainable Energy and Economy Network. SEEN researchers have listed ‘Transnational Corporate Beneficiaries of World Bank Group Fossil Fuel Projects‘ between 1992 and 2002.

Friends of the Earth International delivered bottled ‘World Bank Springs’ water to World Bank President James Wolfensohn, together with a water bill for $318 million – 25% of the World Bank’s annual administrative budget of $1.27 billion – a rate comparable to the water rates charged to poor Cochabamba residents by the Bechtel consortium in Bolivia. FOE International denounces pressures by the World Bank and the IMF on poor countries to hand over their water service systems to transnational corporations driven by their ‘Thirst for profits‘.

Wahington post report on protests

Mobilization for Global Justice

The IMF and the Bank strike back

To counter efforts by NGOs and activists , the Bank and the Fund have made numerous announcements and launched countless reports. The IMF claims to be in a Process of Change after recent declarations by its managing director Horst Köhler that it should be more humble. Meanwhile the World Bank keeps on inventing new roles for itself. The Bank announced it was establishing a new fund with the the World Trade Organisation. The Standards and Trade Development Facility is “part of their efforts to link aid to trade opportunities in the fight against poverty”. A new report by the Bretton Woods Project critically analyses the World Bank’s increasing role in trade capacity building. Cornering the market: The World Bank and trade capacity building complains this role gives the Bank enormous influence over the hearts and minds of trade policy makers and the way in which trade is mainstreamed into national development plans. The initial experience of the Integrated Framework programme shows that there is reason for concern.

IMF Evaluation Office makes first recommendations

The IMF‘s Independent Evaluation Office has completed and released its first study. It looks at “prolonged use of IMF resources” in countries such as Pakistan, Senegal and the Philippines. Two further studies on fiscal adjustment in IMF-supported programmes and the role of the IMF in recent capital account crises (Brazil, Korea, Indonesia) will be available by Spring 2003. Concerns have been raised that the IEO is adopting a technocratic approach, rather than including views of a broad range of stakeholders. IEO Director Montek Ahluwalia said the IMF should consider stricter controls on lending to repeat borrowers, and more divisions between its surveillance and lending operations. See Financial Times story.

Human rights: Bank hiding behind its mandate a “red herring”

At a meeting convened to discuss the World Bank’s planned announcement on human rights (see Bretton Woods Update 29), eminent international lawyer Philip Alston told participants that the World Bank’s mandate limiting its involvement in political affairs was a “red herring”. He said it is more a question of changing the mentality at the Bank. Danny Bradlow, of American University of Law echoed this, saying we are at a point of conflict in how we approach decision-making on development. Can we move beyond a technocratic approach, focussing on discrete outputs, to one of social transformation?

Khadim Husain of Action Aid Pakistan cautioned that without information about what the institutions are doing in countries such as his it will never be possible to realise a rights-based approach. He mentioned that very few people in Pakistan know of the existence of the Interim Poverty Reduction Strategy Paper, although it is supposedly a document produced with civil society input.

Alfredo Sfeir-Younus, who is leading the World Bank’s work on developing a human rights framework, said that the Bank was not yet in a position to release its internal memorandum to the President. An “intellectual journey” was needed to bring some of the economists in the institution on board to see that a human rights agenda was worthwhile and doable.

Civil society groups agreed to continue discussions among themselves as well as with the Bank.

IFC to “do good”; WB plans safeguard shake-up

The International Finance Corporation has unveiled a “sustainability initiative”. This involves moving beyond their “do no harm” safeguard policy framework (on indigenous peoples, resettlement, etc) to a “do good” approach which emphasises how they can support community development, corporate governance and environmental production processes. In a meeting with IFC staff on Monday, NGO representatives welcomed IFC‘s new research but raised concerns that changing IFC‘s culture and way of measuring success would take some time.

In a meeting on the Baku-Ceyhan oil pipeline, the IFC‘s sincerity was challenged by NGOs (see Bretton Woods Update 30) who allege that the project overrides national laws and will be detrimental to human rights and the environment. Cameroonian organisations also raised concerns about worker dismissals and lacking compensation in the Chad-Cameroon oil pipeline, also backed by the IFC (see Bretton Woods Update 30). They have filed a new claim with the World Bank Inspection Panel, complaining that the Bank is violating its own policies. A new report, ‘Traversing peoples lives; how the World Bank finances community disruption in Cameroon’ outlines the effects of the pipeline.

Meanwhile the World Bank announced to NGOs that they plan another major shake-up of their current safeguard policy framework. The policies do not apply to certain categories of lending, such as structural adjustment loans, and the Bank says its clients only pursue the policies where they have to in order to get Bank money. The Bank is examining new ways to increase borrower ownership and implementation of the policies, if necessary adapting the policies to the country circumstances and using third party, not World Bank, certification. This approach could lead to greater harmonisation between the policies of the World Bank and other development agencies. Recognising that this proposal is likely to engender resistance from NGOs who want no dilution of the policies, the Bank is proceeding cautiously. A discussion paper will be released in early October and a number of pilot approaches started.

Governance changes urged

Stephanie Griffith-Jones, a professor at the Institute for Development Studies in London, urged changes to the governance structures of the World Bank and IMF but recognised that some major shareholders would need persuasion. The British government, however, has announced that it is urging the Bank’s Development Committee, this weekend, to prepare a paper on ways to raise the voice of Southern governments on the Boards of the IFIs.

Governance of the World Bank, GAP Research (PDF file)

For more information about events at the Annual Meetings see:

Annual Meetings calendar, Bank Information Center

IFI watchers calendar, IFI watchers network

Annual Meetings Documents

Development Committee Papers

International Monetary and Financial Committee Papers

Civil society reports