Highlights of meeting with UK ED to WB/IMF, Tom Scholar

October 2005

5 October 2005 | Minutes

Participants: Robin Robison, QPSW; Trisha Rogers, Jubilee Debt Campaign; Fletcher Tembo, World Vision; Sarah Hague, Save the Children; Romilly Greenhill, ActionAid; Sony Kapoor, Tax Justice Network/ChristianAid; Sophie Powell, Oxfam GB; Susana Mitchell and Steve Mandell, nef; Jeff Powell, Bretton Woods Project

DFID: John Moye, Chris Young and Justin Williams

1. Follow-up on agenda points from June meeting

UKdel followed up with Interaction over small grants facility for reproductive rights; no follow-up yet with Forest People’s Programme over IPP process concerns; UKdel have requested information from Bank staff regarding Rainforest Foundation’s request for information on DRC, but have yet to hear back.

we wouldn't want to be in a situation where the IMF/WB can't give advice

2. Conditionality

  • UK looking for clarity on “exceptional circumstances” for use of sensitive conditionality. UK would prefer none.
  • Bank mgmt have agreed to report on implementation to board in one year’s time (unsure if this would become an annual review). UK wants review to go to Development Committee.
  • UK wants to demonstrate through its bilateral programmes that the new approach works. Need to gather examples of good/bad practice to win over other donors. Tom Scholar wanted to speak to other developing countries personally to see why they were not being as vocal as he thought they should be.
  • Bank staff will operationalise good practice guidelines. Therefore, Jim Adams is person to address comments to on this.
  • UK wouldn’t support conditions not drawn from PRSPs (responding to Romilly’s citation of DDCI research finding the opposite)
  • UK clear that trade liberalisation should not be dictated through conditionality. However, we “wouldn’t want to be in a situation where IMF/WB can’t give advice” – want to be in a “situation where developing countries can turn down this advice”.
  • IMF PSIA unit got off to a “false start” by setting exceptionally high standards and wanting to control whole process. Then realised they didn’t have the skills/capacity. UK encouraging them to be more pragmatic, make other Fund staff aware of importance of PSIA, and involve other actors, pursue “eclectic” approaches.

3. Debt

  • Confident that proposal deals with all concerns raised by WB/IMF staff and other donors, though “quite a bit of work” remains in next ten days.
  • Key sticking points: how commitment to additionality will be measured – should be resolved by next weekend; for IMF, the principle of uniformity of treatment – one proposal is to bring other non-HIPC countries in; another proposal is that the existing G8 deal already is consistent with the principle.
  • On conditionality – UK position is that past conditions already ensure that money is properly spent.
  • HIPC conditions “more elaborate and numerous than necessary or desirable”. UK has been making this point in individual country discussions.
  • Will know by spring meetings how many more countries can be brought into HIPC under sunset clause.
  • Planned QPSW paper on privatisation of Nicaraguan social security system would be very helpful. Fund will do an ex-post assessment to draw lessons form this. Board is finding such assessments very useful.
  • Looking forward to further dialogue with Sony Kapoor on odious debt issue.

4. PRSPs

  • Macroeconomic dialogue – Fund was unclear on this in first generation PRSPs. If you don’t have macro framework as part of discussions, its much harder to include public in process of making choices.
  • UK will remind IFIs of their record on Paris commitments. Taken up under Global Monitoring Report – 2 previous reports were weak on what BWIs were doing. Now that WB/IMF are signed up to Paris commitments, improvement expected.
  • Europeans pleased with WDR 06 on inequity. Key question they raised was how this report would be fed out to country and sector teams. Inequity is a possible “way-in” to previously difficult issues such as core labour standards and human rights.

5. Climate change

  • Dev Cmte paper is short framework paper on Bank’s engagement. This is first paper of its kind and is intensely controversial – many members concerned with implications. Much work to do to establish that climate change is a development issue.
  • Meeting in margins of annual meetings on climate change – not finalised
  • Extractive Industries Review – 1 year implementation review due before end of year. Poverty tracking, transparency and HGAs all key UK interests. Let’s discuss after release of review.

6. Voice

  • Overall, debate has “not moved on a great deal”
  • Fund’s quota review through 06-07 (to be finalised by Jan 08) is vehicle to address the issue. Can be broadened to address issues beyond narrow issue of quota increase.
  • In a speech in Korea last week, de Rato signalled that voice issues are a major issue to ensuring the future legitimacy of the Fund. Likely to come up in Fund strategic review.
  • Sony Kapoor to set up meeting with UKdel to discuss IFI role in capital flight and erosion of developing countries tax bases.

Next meeting: In December when Tom Scholar returns to UK for Article IV review. Date tbc.