UK MPs question WB governance

17 November 2003

On 6 November the International Development Committee of the House of Commons held an evidence session on World Bank/IMF issues. MPs questioned the Chancellor Gordon Brown and new Secretary of State for International Development Hilary Benn as part of their annual hearing on the international financial institutions. Many of the MPs’ questions drew on the memoranda submitted by seventeen NGOs from the UK and other countries. These included Bretton Woods Project, many NGOs from its UK network, plus ones from Senegal and India.

One of the major topics to be addressed was the governance of the Bank and Fund. Hugh Bailey MP questioned the imbalances in representation at the Bank and Fund. At present the largest five contributing countries to the World Bank and IMF have their own official on the Board of the Bank and Fund, whilst other countries have to operate in joint constituencies. Some 46 Sub-Saharan African countries are represented by just two officials, with only a very small proportion of votes to wield.

Hilary Benn replied that the UK supports rebalancing Bank/Fund governance, including an increase in basic votes, and has proposed a third seat for African countries on the Bank Board. He said the UK has provided £500 thousand to support the capacity of developing countries. Gordon Brown, however, noted you could spend ages discussing these questions but this should not divert resources from urgent issues. This indication that the Treasury is not convinced of the need for governance reform echoes remarks by the head of the IMF at the Bank/Fund Annual Meetings. And as many countries have treasury, not development, departments in charge of their relations with the World Bank, little progress can be expected.

MPs also asked a clutch of questions on PRSPs, including on country ownership, Bank/Fund cooperation and gender impacts. Hilary Benn agreed that progress on some of these matters was “slow”.

Tony Coleman MP described the recent approval of the Baku-Ceyhan oil pipeline as “an appalling situation”. He said the IFC had for the second time approved a big pipeline project before necessary guarantees were in place. Hilary Benn – nicknamed “BP Benn” by campaigners challenging the project led by the British oil company – claimed that withholding international agency finance was out of question because the company had other sources of finance and work had already started. His argument appears to rest on the assumption that providing public money to a project will make it better, regardless of procedural compliance.

Annual parliamentary hearings on government involvement in the World Bank and IMF impose a healthy discipline on ministers and officials. Advocacy by Swedish NGOs has resulted in initiatives from parliamentarians from different parties to make the Swedish parliament more involved and in a better position to supervise the government’s work in the IMF and the World bank board. Among the useful suggestions by Swedish NGOs was for parliamentarians to make contact with their colleagues in the other Nordic constituency countries and to clearly establish which parliamentary committee has an overall responsibility for IFI issues.