Highlights of UK NGO meeting with executive director to the WB and IMF, Tom Scholar

April 2006

20 April 2006 | Minutes

On IMF strategic review:

  • Managing Director’s proposals (in the paper due out next week) need more work – this is not the end of the process – CSO participation is anticipated in next stage before the annual meetings
  • UK agrees that Fund should have invited broader participation sooner
  • Joint WB-IMF committee on evaluating the division of responsibilities is expected to seek civil society input
  • Fund role in low-income countries will be most difficult area of the review – UK pressing for explicit recognition of progress towards MDGs as part of Fund’s responsibility

On debt:

  • NGO campaign was effective in securing / improving the WB part of the Multilateral Debt Relief Initiative (G8 debt deal)
  • Joint WB-IMF paper will look at ‘free rider’ problem (post-debt relief, new sovereign and private lenders encouraging countries to get back into debt troubles). This issue will be addressed at mid-term review of IDA XIV (in Sept-Oct)
  • UK still has objective of debt relief for all low-income countries, but “no appetite” this year amongst other shareholders
  • There is a strong case for looking at odious debt, but current circumstances are not promising
  • Trying to look at debt relief from a human development lens – what is clear is that by any such measure, needs outstrip countries’ current capacity to borrow, and this means more resources should be available on grant terms
  • Re Fair, Transparent Arbitration Procedure – UK was supportive of Fund’s Sovereign Debt Restructuring Mechanism – but is doubtful of what an ‘independent’ arbitration mechanism could accomplish without the parallel financial commitment to pay.

On conditionality and fiscal space:

  • Background paper on fiscal space for spring meetings concedes that the Fund has paid insufficient attention to the macroeconomic specifics of low-income countries
  • Need further academic research in this area – DFID has sponsored Fund research
  • UK agrees that HIPC conditionality has been too much – however, economic policy conditionality is not “by and large” the cause for delay. It used to be, but now it is governance failures that are holding things up.
  • One-year conditionality review is expected for annual meetings, but won’t have much experience to go on. Therefore, we look to NGO examples of where “lighter touch conditionality” was effective
  • .

  • UK will use information from DFID in-country offices to decide if it will or will not follow IMF off-track signal.

On social transfers:

  • [Scholar interested to see Helpage report on Zambian intergovernmental conference where 13 African governments called for more use of social transfer programmes.]
  • Hope that African governments would deliver the idea to the board (possibly via one of several groupings which African EDs are involved in) to consider how Bank should respond-Africa Action Plan may be a hook

On universal primary health care, elimination of health user fees, education:

  • This will get attention on the spring meetings agenda under the discussion of the Global Monitoring Report
  • Will have to come back to participants on universal primary health care as Caroline Sargeant (UK alternate ED) is leading on this
  • UK will team up with NL, Canada and other active education donors to look at how the new money Brown announced will be spent – don’t want to add to compliance burden of countries by adding additional planning requirements.

On predictability:

  • Aid effectiveness will be on the annual meetings agenda “one way or another”
  • Didn’t realise that World Bank didn’t report to OECD-DAC on disbursements

On corruption:

[Scholar was interested in NGO response to Bank manoeuvres on this issue.] Bretton Woods Project indicated that NGOs in this network were working their way through what was a complex issue, and made some concrete recommendations:

There is a strong case for looking at odious debt, but current circumstances are not promising
  • Develop a consistent, transparent framework for deciding when to suspend financing
  • release the Pozen report (on Bank systems of transparency, accountability and integrity) which is assumed to be guiding Wolfowitz’s accountability drive
  • take up the recommendations of the Vaughn report on whistleblowers
  • Reform the integrity department. Streamline sanctions procedure, and need face up to larger corporations involvement in malpractice
  • Revisit the Extractive Industries Review recommendation to adopt minimum standards in governance, transparency and human rights in institutionally weak countries

On climate change:

Due to time constraints, and the absence of key groups on this issue, it was suggested that this be raised in writing and at the meeting with Hilary Benn.