IFI governance

Background

Meeting of UK NGOs and Susanna Moorehead, UK Executive Director to the World Bank, and Rachel Turner

July 2010

19 July 2010 | Minutes

Present

UK NGOs: Aaron Oxley (Results), Sarah Edwards (HPA), Tom Griffiths (Forest Peoples Programme), Emmanuel Freudenthal (Forest Peoples Programme), Dominic White (WWF UK), Ruth Davis (Greenpeace), Rica Garde (Save the Children), Jasmine Burnley (Oxfam), Timeyin Uwejamomere (WaterAid), Ama Marston (Bretton Woods Project), Jesse Griffiths (Bretton Woods Project).

Officials: Susanna Moorehead, Rachel Turner, Siobhan Clifford, Rahul Malhotra

The new Government’s approach to the World Bank

HMG officials made the following points:

  • The Secretary of State (SoS) has had several meetings with Robert Zoellick, who has also met other members of the government.
  • There is considerable interest in the Bank throughout the Ministerial team. Next 6 months will have a focus on IDA.
  • The new government has a strong focus on results – which is important for IDA and the multilateral aid review (MAR)

The multilateral aid review

HMG officials made the following points:

  • The process is now signed off by the SoS – he will write to UK NGOs shortly to set this out, proposing a process of consultation. In addition, NGOs and others are encouraged to submit as much relevant material as possible and to engage through their partners in country level consultations.
  • It will be important that NGOs not directly focussed on the Bank have a say as well.
  • The review will also be focussed on getting feedback from developing countries. 8 or 9 country studies will be conducted, not all in countries with DFID country offices.
  • It will look at over 30 multilaterals, and the value for money they provide both from the perspective of meeting their own objectives, and also their contribution to UK objectives (see Coalition Agreement) Key metrics will include their relevance from this perspective, but also cost control etc. Assessing partnership is made easier by the use of Paris Indicators . Assessing the poverty focus of multilaterals may be more difficult. All ideas would be welcomed.
  • The MAR will be constructed to allow comparison between different agencies, For example, on health financing, it’s not an either/ or choice between the Bank and the Global Fund, because there are other multilaterals engaged such as the EC through the EDF. The International Finance Corporation (IFC, the World Bank Group’s private sector lending arm) will be considered separately from the World Bank (IBRD & IDA).
  • The International Aid Transparency Initiative (IATI) will agree its standards shortly, and DFID will follow them. The Bank’s new transparency policy is also now in operation, based on a presumption of disclosure.
  • Agree with the importance of improving lesson learning. Have asked for an annual Board discussion on general lessons from all evaluations. On sectoral issues, sectoral DFID staff always willing to meet NGOs. Also welcome all reports that can be provided in general, and encourage NGOs to work with other Executive Directors and constituencies to raise issues.

NGOs made the following points

  • If public engagement is to be meaningful, there needs to be full transparency, and this must be proactive – i.e. you can’t rely on the information available from multilaterals own systems/websites etc, it needs to be made meaningful and accessible to people without necessarily specialist knowledge.
  • The methodology or metrics used will also be very important.
    • A focus on results can tend to lead to a prioritisation of short-term change over sustainability. There are certain preconditions for sustainable development, such as sustainable use of natural resources, democratic ownership etc that are difficult to measure but critically important.
    • Comparing multilaterals might not always be the most appropriate method. For example, should the Bank’s CIFs be compared against the Global Fund.
    • One cross-cutting theme should be accountability to affected communities and the public. For example safeguards give public accountability. There is also a systemic problem that lessons learned from for example, IEG reviews the Inspection Panel etc, don’t feed back into World Bank Group strategies and priorities.
    • It would be useful to consult on both the metrics/methodology and the content
  • A number of UK NGOs have already set out their concerns about the Bank in a paper on IDA – this remains the framework we are using. i.e. we don’t believe there should be an increase in public resources going to the Bank without fundamental reform. For example:
    • We have ongoing concerns about the Bank’s performance on health, which we think should be considered as part of the review. Recent Action report has also highlighted problems with the SWaPs mechanism and the Bank’s involvement. Oxfam and others prefer the Global Fund as the most effective way of directing health funding. The Bank has a poor track record, on both policy (advancing the use of user fees for example) and implementation.
    • WaterAid has conducted studies in three countries on the Bank’s work and has found poor targeting of the poor in urban areas, a tendency to incentivise technical and financial performance to the detriment of services to poor people, and that the IDA system is not clear about the importance of delivery to poor people. Action: Timeyin to send report (done).
    • We also have longstanding concerns about the way the Bank can, through its behaviour, undermine the development of country capacity and ownership over the development process. We have previously discussed concerns on conditionality, the failure of Bank PSIA to build country capacity, the tendency of the ‘knowledge Bank’ to focus on its own generation of knowledge, not building capacity in country etc.
    • Welcome climate as being one of the key concerns of the SoS. There are longstanding concerns about the (a) the Bank’s fossil fuel lending, which has increased in the last year, (b) the Bank’s climate investment funds (CIFs) which are proving slow to roll out, and have not done well at engaging civil society input. There are also serious issues about how the rest of the Bank’s work impacts, and the contradictions implied in for example, the Bank working on Redd (reducing emissions from destruction and degradation) and also driving forest loss through, for example the IFC’s palm oil funding. All of these issues reinforce the concerns we have about the Bank being a future home for climate finance.
    • On education, a new Results report has documented that the FTI has led to a decrease in IDA spending and attention – which is particularly worrying given that the FTI potentially runs out of financing this year. There is also a loss of focus on education through multi-sectoral approaches. Action: DFID to create an opportunity to engage the Education Team on the issues raised in the RESULTS ‘World Bank Financing for Education’ report (done).

IDA 16 replenishment process

HMG officials made the following points:

  • Quite a complicated process with over 50 people round the table. 3 Presidents (Mali, Senegal and Liberia) spoke, emphasising the important role of IDA but making forthright comments about the Bank, including the need to improve performance in fragile states and procurement.
  • Crisis Response Window- the $1.3 billion in the pilot programme has been mostly allocated; and a permanent CRW in IDA 16 was endorsed, pending design details, with a cap of 5% of IDA funding. It was agreed not to have a climate window, though IDA will seek to mainstream this issue.
  • Results framework – discussing with Borrowers about the level at which these will be expected – i.e. outcome results such as children attending school etc are not ‘IDA results’ but results of the countries. However there is a need for the public in donor countries to have some accountability for what will be achieved with their money. Agree however that there need to be indicators that the Bank itself can be directly held accountable for. Climate change, fragile states and gender commitments were discussed.
  • Performance-based allocation – no agreement to reopen this issue (some still opposed to reopen), though it will be looked at in the context of fragile states in the mid-term review. On the commitment to look at IEG recommendations on CPIA, there is an ongoing review in response to this.

Follow-up to spring meetings, next steps on reform

HMG officials made the following points:

  • Governance – Would be useful to have further discussions on the future reform of voice and vote – now would be a good time to think about this more deeply.
  • Investment Lending (IL) reform – First phase approved, it’s the most far reaching reform for some time. Action – UK Delegation to follow up on the consultation process to find out current status.
  • Useful to copy the UK ED into letters to the Bank or other relevant correspondence – otherwise not guaranteed they will be seen.

NGOs made the following points:

  • Have raised serious concerns about the lack of consultation and transparency in the IL reform process, and specific issues about, for example the risk framework and its impacts on safeguards in previous meeting with European EDs.

AOB

Concerned about the lack of clarity about oversight of carbon funds like the FCPF – both the FCPF governing body and the Bank’s board are reported to have oversight of safeguard issues. Worried that the FCPF’s decision to expand implementation to a number of agencies will result in a race to the bottom on standards. A letter has gone to the Bank on this.

Is the UK involved in the Bank’s palm oil review? Local partners in Indonesia, Malaysia and other countries are very unhappy with the consultation.  Will the UK government support an extension in the consultation process to enable informed and effective participation by affected communities and CSOs? Action: DFID will look into this and revert.