Participants:

Peter Chowla, Bretton Woods Project (chair)
Anna Thomas, Christian Aid
Michael Hammer, One World Trust
Jeffrey Oatham, One World Trust
Caroline Pearce, Jubilee Debt Campaign
David Woodward, nef
Rick Rowden, ActionAid USA
Romilly Greenhill, ActionAid UK
Ben Young, Jubilee Scotland
Bronwen Thomas, People & Planet

Tom Scholar, IMF
Nirav Shah, DFID
Peter Taylor, DFID
Nick Owen, Foreign Office

Item 1: Aid Effectiveness/conditionality

CPIA / Aid Allocation

CSO Points/questions:

1. CPIA should be reviewed, but should have an independent review
2. Should consider use of outcomes-based indicators

Tom Scholar Response:

1. Agreed that the balance in CPIA between need and performance-based assessment is not perfect, but UK is not interested in wholesale reform
2. Tom also issued some caution about an outcomes approach.
3. On an independent review – the response was luke-warm. Tom pointed out that responses to the Bank’s paper from a wide audience might achieve the same results as an independent review

Africa Lending from IDA

CSO Points/questions:

1. Is there a problem with volume of lending to Africa?

Tom Scholar Response:

1.  Tom confirmed that this was true, but noted that it was highly likely that it was a result of a ‘normal’ backlog in processing projects and that many IDA Africa Projects would be pushed through between now and June (ahead of the Bank financial year).
2. He also noted that the fall may be a result of extraordinary rises in 05/06 – as 05/06 included unspent, IDA 13 project money.
3. Finally, when asked whether governance concerns where anything to do with it – he said he did not feel that this was true, though in some countries this had been a factor – pointing to Kenya and the call to stop all project lending last year due to corruption issues, which has only just been resumed.

Conditionality and Good Practice Principles

CSO Points/questions:

1. Questions about the nature and timing of the 2007 conditionality review at the Bank
2. Ask for an independent review of GPP and a renewed survey of all external stakeholders

Tom Scholar Response:

1. The UK government have urged the World Bank to produce its two year on conditionality progress report ahead of the IDA meetings in October/December so that the findings can be used to influence their decisions within the Bank on this. There is no exact date but it will be published some time in the Autumn.
2. Tom pointed out that small evidence base of the last progress report – based only on 17 countries that had post good practice guidelines DPLs  – and hoped that this would be much broader in its analysis. He emphasised that the hope would be for this to also take a more country by country approach.
3. On an independent review of conditionality – the response again was luke-warm.

IEO Report on aid to Sub-Saharan Africa

CSO Points/questions:

1. What was the board’s reaction to the IEO report
2. Is there a sense that macro targets of the IMF are too conservative?

Tom Scholar Response:

1. Tom noted that there is tension amongst IMF board members on the IMF’s exact role in LIC and its position on many macroeconomic matters.  
2. He admitted that better and more research needs to be done on the exact relationships between macro variables and growth in low-income countries. He felt that the IMF research department needs to do more work on LICs instead of its traditional work on exchange rates and MICs. He thought that the new head of research at the Fund would improve this.
3. He also noted that the division on the board is not North-South or Trans-atlantic but more complex. Some want the IMF more poverty focused and more active in LICs, while others want the opposite. He said both the UK and LICs generally welcome a broader role for the IMF in LICS.

Item 2: Climate change and Clean Energy financing

Clean Energy investment framework

CSO Points/questions:

1. Questions on the details of the CEIF
2. The breakdown of numbers shows investment in extractives/OGM sectors increasing rapidly and renewables as a proportion of all energy spending at the WBG falling! This is not the right focus

Tom Scholar Response:

1. Next CEIF draft for board discussion before the annual meetings in the fall. The board should discuss in October and it should be on the Development Committee agenda.
2. UK’s strategy is get the CEIF mainstreamed in all of the Bank’s work, not just as a small part of the energy portfolio. Also UK is pushing for increasing the 20% target for annual increases in funding to renewables. They want a more ambitious agenda, including a general framework on energy finance across different multilaterals.
3. He continued to defend extractive industries on the grounds that countries have the right to exploit their resources. He also said that developing countries will use fossil fuels so a key area of concern should be funding for cleaner fossil fuel technologies

Extractives revenue

CSO Points/questions:

1. Countries don’t always benefit from extractives investment, corruption, elites, MNCs etc

Tom’s response

1. EIR safeguards were important. He feels the UK played a constructive role
2. He admits that not all countries benefit from extractive industries. He says the Bank has a role in helping countries because of their weak position in negotiations with MNCs.
3. Part of the problem is the complexity and non-transparency of the deals, he welcomed CSO monitoring and contributions of them

Left to discuss next time: the role the Bank played, through investment climate reform, of putting countries in weak negotiating positions vis-à-vis MNCs

Item 3: IFI governance reform

Quota changes and vote reforms

CSO Points/questions:

1. Problems with the 3-fold role of quotas
2. The lack of democratic factors in the vote, the IFI don’t meet standards of democracy
3. Population as a key factor in a formula

Tom’s response

1. This is “an extremely difficult” issue to move forward, but the UK is committed to making it move
2. Tom felt it was hard to justify certain formulas because we don’t know what role the IMF will be playing in 20 years/ Different roles imply different structures.
3. He asserts that currently the IMF is primarily a financial institution so economic weighting is the most relevant way to decide votes now. He feels that right now the UK will work within the confines of the Singapore resolution and not seek something different.

Double Majorities

CSO Points/questions:

1. Quota reform is not working
2. The UK should be more public in its views
3. The UK should facilitate debate and discussion of this
4. Questions on what the UK views as the drawbacks of the proposals

Tom’s response

1. The UK is interested in the topic, but the proposal has not been put forward by the staff or the board so it really isn’t up for debate now.
2. It is attractive because it prevents pushing through of decisions, but the potential downsides are gridlock in decision-making. (personal opinion not a UK position). The UK needs to think through the ups and downs more carefully before it can decide on a position.
3. The UK is open about its positions, we have no secret paper on our position that we are working from. But the negotiations are challenging and it wouldn’t be helpful for the UK to stake out a position early.

Other points on governance (Malan collaboration report), disclosure policy review and Bank external evaluation of INT to be addressed in Washington?