The Executive Board of the IMF met late June to discuss a revision of its procedures towards more transparency. While the IMF assimilates transparency efforts in the past few years to a ‘revolution’, critics point to major shortcomings hampering public scrutiny (see At Issue ‘G-7, civil society press for IMF, World Bank transparency reforms’). No firm decisions were made in the meeting, officially for ‘technical’ reasons but also because there is little agreement on how to proceed. The discussion revolved mainly around the publication policy for country documents. Specifically the Board discussed moving from voluntary to ‘presumed’ publication of staff reports for Article IV consultations (the yearly assessment of a country’s economy by Fund staff) and Use of Fund Resources (outlining a country’s status with the IMF and policies that will be implemented). ‘Presumed’ publication would mean these documents would be made public unless the country explicitly opposes it. Countries in favour of presumed publication think that it would mean almost systematic publication thanks to peer pressure. Although the publication rate has increased in recent years some countries (such as Indonesia for example) are still reluctant to see IMF reports about their economic policies disclosed. There were signs that these countries might be talked into accepting a move towards presumed publication.
A related stumbling block is moving to mandatory disclosure of UFR reports for cases of ‘exceptional access’ (countries borrowing more than the usually authorised limit). Some countries have contested the legality of this. The need for clarifications by the Fund’s legal department was the reason invoked to delay decisions.
Disagreements on the above points pushed other important issues into the background that had been raised in a joint NGO letter. The NGOs demanded publication of IMF Board minutes after a few months and of the Board’s schedule in advance, publication of letters of intent and memoranda (that outline a country’s commitment in exchange of IMF loans) before Board approval. NGOs have also demanded an end to the practice of side letters (confidential communications describing secret measures taken in exchange for IMF support). While rarely used, side letters are unacceptable, because they can include not just for ‘market-sensitive’ measures but also those which might arouse political opposition.
Argentine civil society organisations have filed a legal complaint in their country to gain access to a side letter to the latest IMF agreement, which is believed to contain a commitment to increase prices of basic services. They have complained that IMF pressure to increase prices of key utilities is illegal (see Update 33). They asked the Independent Evaluation Office of the Fund to investigate this but the IEO, which recently circulated the draft terms of reference for its study on the much-debated role of the Fund in Argentina between 1991 and 2001, has made clear this was beyond its remit as it is not allowed to look at ongoing IMF operations. This reinforces the need for an impartial complaint mechanism that would allow citizens negatively affected by IMF operations to prevent harm and obtain redress.
No official summary of the IMF transparency discussions is yet available.