Town hall meeting with civil society organisations

26 September 2005 | Minutes

Panel: Paul Wolfowitz, president, World Bank; Rodrigo de Rato, managing director, IMF; Trevor Manuel, chairman of the Development Committee and minister of finance, South Africa, World Bank. Chair: Ms Rao

The session included questions on: the Bank’s involvement in the Democratic Republic of Congo; debt; the Marlin gold mine in Guatemala; Iraqi debt reparations; corruption in Pakistan; Presidential selection; TB and HIV/AIDS in Africa. A video file and full transcript of the meeting can be found on the civil society annual meetings page (link below)

Eric Holt -Gimenez, from Bank Information Centre referred to a recent report by the Compliance Advisor Ombudsman on the Marlin Mine in Guatemala, which was highly critical of the IFC’s lack of provisions to security in a post conflict country with continuing human rights abuses and its failure to consider the Guatemalan government’s lending capacity to regulate the mining sector. He asked Mr Wolfowitz what he will do to ensure that the project will not further heighten social and political tension in the country, and to define “broad community support” as the Bank understands it and to “clearly indicate the conditions under which the lack of broad community support would prevent the Bank from financing a project”.

Mr Wolfowitz responded that there is usually more than one side to such cases, but that he would need to know more about the project to comment. His understanding of broad community support was that it is “much more than a majority” and that “things that are useful for the majority of the community are going to have some costs”. Mr Manuel responded that from his experience of Africa, the views of local people and northern NGOs are not always the same, and that “these projects” can help people find a way out of poverty.

Maysa Ibrahim of Jubilee Iraq referred to the recent IMF plan for Iraq, and expressed concern at the imposition of policies on a very vulnerable government, which are understood to include: the ending of subsidies, privatization, and the reduction of state salaries, all of which could undermine the fledging democratic process in the country that has inherited crippling legacies of odious debt.

Mr Wolfowitz responded that the World Bank is not imposing conditions on Iraq, but rather “strongly encouraging” the government to stop giving oil away and wasting money. He asserted that much of the oil is taken out of the country, and the resulting proceeds used to support terrorists. It is not a matter of conditionality, rather “sound, good policy”. Mr Manuel implied that the fatalities and security issues in Iraq are of great concern and present a challenge regarding how to look at issues of governance and quality of life. Mr de Rato said that the IMF’s programme in Iraq is a post-conflict one. The three most important conditions are: that the Iraqi authorities (central bank and economic minister) continue to improve the data they give to the IMF; that Iraq carries out an audit of its central bank due to corruption issues; that the country scale down its oil subsidies (currently at 25% of GDP and the equivalent of approximately $8 billion) to prevent speculators from selling it on the cheap in Jordan, and use the savings on social spending.

Max Lawson from Oxfam asked, in light of the Bank’s commitment to accountability and good governance, what it would be doing to a) ensure that the head of the World Bank is transparently and democratically elected from now on, and b) create more seats on the board for developing countries. Mr Manuel responded that he didn’t think it was fair to pressure Wolfowitz on this issue, and that decisions of representation should be taken by the boards of governors. In a round about way he acknowledged that decisions regarding representation and voting weights should be taken over the next period. Wolfowitz said that he was sympathetic to the concern about voice for developing countries, but that the “enormous strength and power” in the World Bank resides in the staff.

Hadelin Feront, from Compassion in World Farming pointed out that intensive agriculture contributes about 20 per cent of world green house gas emissions, and also deforestation. Trade liberalisation of agriculture (to be discussed in Hong Kong) will lead to intensification on a global scale. He asked about the position of the Bank in relation to the need to restrain the spread of intensive agriculture and provide incentives for a shift towards sustainable methods of production. Wolfowitz responded that the green revolution in East Asia was instrumental in the fight against poverty. So far there has been no green revolution in Africa due to lack of investment in agricultural research. He identified huge needs of infrastructure, and complaints he has received that the Bank has withdrawn from this. We have learned from the mistakes in the past, and criticised people in rich countries for saying that “poor countries should stay in their pristine state”. Environment and development can go hand in hand.

Pera Wells from the World Federation of United Nations Associations referred to the need to reconsider the relationship between the World Bank, the IMF and the United Nations, and proposals that the WB and IMF should be made accountable to the UN. She asked how Wolfowitz envisaged his leadership under the World Bank in being a catalyst for stimulating a qualitative shift in the relationship between these institutions. Mr Manuel questioned how we should apportion responsibility between those in elected office who face elections and are deemed to have to be accountable to the electorate, and the “good citizens” who run NGOs around the world, and asked what is the basis of accountability?

A representative from Results Educational Fund asked about the Bank’s investment in TB control in Africa– a few weeks ago the WHO and Africa’s health ministers declared TB to be a continent-wide health emergency. The Bank plays a leading role in TB control in India, China and Russia, does it plan to increase investment in TB control on the continent? Wolfowitz responded that roughly half of the 2 million people who die from tuberculosis per year are in China and India, where the Bank has big programmes. In total the Bank has over half a billion dollars of investment in TB control. He went on to say that malaria is a big problem in Africa and “the number one problem” in Burkina Faso. Consequently the Bank will put $600 million of funds into fighting malaria over the next three years. In terms of health treatment in general, it is important to make sure that “the field is adequately covered”, and the there are often gaps that need to be addressed in training health care workers, providing electricity or the roads that make clinics work. Mr Manuel responded that Africa is not the only region that suffers from TB, and that the situation in Eastern Europe is not drastically different. He said there are two reasons for the TB problem in Africa: 1) We fail in education to ensure that people appreciate the need to be regular in the treatment, drug resistance builds up because people come off the treatment before they are better; and 2) People in South Africa are entitled to a disability grant while they are receiving medication for TB, so they have no incentive to get well.