IFI governance


World Bank-IMF annual meetings 2010

12 October 2010

A meeting between UK NGOs and DFID officials was held on 27 September. A video conference was held between UK NGOs, HM Treasury and the UK executive director to the IMF Alex Gibbs on 4 October.

  1. Overview
  2. World Development Report 2011: Conflict, Security and Development
  3. Agendas and background for papers for committee meetings – IMFC and Development Committee
  4. Highlights of official meetings and communiqués
  5. Highlights of civil society meetings, and other meetings and seminars

1. Overview

Wrangling over IMF governance changes look set to dominate the annual meetings, with the US trying to force European states to give up some of the nine seats they hold at the IMF executive board (see Update 72). In August, the US raised the stakes by vetoing the continuation of a 24 seat board, meaning unless agreement can be reached by the end of October, it will go back down to 20 seats. The Europeans’ September response – an offer to rotate ‘up to two’ seats with middle-income countries – suggests they have their heads buried in the sand. Meanwhile, developing countries are still fighting for a greater share of quota and voting rights, with proposals threatening to backtrack on the 5 per cent increase they were promised. And the fact that the negotiations still include leadership selection shows that neither the US or Europe puts much store by the numerous international statements and IMF communiqués they have signed promising open merit-based processes. Changing voting rules – including ending the US veto and the more radical introduction of a system of double majority voting (see article) – hover in the background. It all adds up to a potentially explosive combination, with the Spring 2011 deadline looking increasingly optimistic.

The finance ministers and others gathered for the customary discussion of the global economy are unlikely to feel confident that too many steps have been taken on the ‘road to recovery’ promised at last year’s annual meetings in Istanbul. The press has been talking up the notion of ‘currency wars’ focussing on China’s continued support for the yuan, and its recent announcements that it won’t undermine the reserve currency role of the Euro. All this serves to highlight the failure of both the IMF mandate review (see Update 72) and broader global responses to the financial and economic crisis to deal with how to manage currencies and capital flows in the modern era. This issue of monetary system reform seems set to continue to be the biggest elephant in the room at the annual meetings, and at the forthcoming G20 in Korea in November.

At the World Bank, despite the official agenda focussing on how developing countries are weathering the crisis, with an update on wide-ranging internal reforms, it is clear to all what the real agenda for the Bank is: money. As the final stages of the three yearly top-up of IDA, the Bank’s low-income country lending arm approaches (see Update 69), Bank President Robert Zoellick and his officials will be pressing the flesh, eager to ensure they respond to donor governments’ concerns. However, in a time of fiscal austerity, evidence of Bank failings (see Update 72) and vocal opposition from many quarters (see Update 70), this may prove a tougher sell than previously. IDA is of course, only one part of the prize Zoellick is after; with climate talks in Cancun beginning in late November, his attention will also be directed to ensuring that as large a portion as possible of climate financing finds its way into Bank coffers. Stiff resistance to this ‘bigger Bank’ agenda will come from civil society organisations and others who have travelled to Washington to highlight the Bank’s failings in its performance standards review (see Update 72), its proposed palm oil lending framework (see Update 72) and ongoing problems with its energy lending (see Update 72) and climate investment funds (see Update 72) among other issues.

Bretton Woods Project detailed analysis of the content of the communiqués is available.

2. World Development Report 2011: Conflict, Security and Development

Noting that a quarter of states eligible for assistance from the Bank’s International Development Association are experiencing conflict and lag behind others in economic growth and human rights, the report aims to present new thinking and practical recommendations for addressing conflict and fragility. It reviews types of violence that societies face – such as civil war and organised crime – and their development consequences. It identifies inclusive institutions as critical to progress. It argues that the international community has an important role to play through development, peace-keeping and technical assistance, and asserts the need to align global and national incentives. Shared objectives and context-specific practice are said to be vital, as are greater efforts to manage more risk broadly and address transnational violence. More information can be found here. The theme of the next year’s WDR will be gender.

3. Agenda and background papers: International Monetary and Financial Committee (IMFC)

IMF governance reform and a discussion of the global economy will feature on the agenda, which is now available.

The agenda for the IMFC meeting is available and includes topics for which there are background papers:

Agenda and background papers: Development Committee

The agenda for the Development Committee is available and the following background papers have been produced:

4. Highlights of official meetings

The Bretton Woods Project bringa you analysis of the content of all the communiqués and the story behind the positions. This year the schedule has been switched around, with the plenary shortened and put before the IMFC and Development Committee meetings, which now both take place on Saturday, 9 October 2010. You can find detailed coverage of all communiqués in our dedicated article.

7 – 9 October: Programme of seminars

7 October: G24 communiqué (deeper analysis, original document).
Summary: The G24 grouping of developing countries at the IMF and World Bank focussed their communiqué on global economic issues and IMF governance reform. They called for more IMF work on how to manage volatile capital flows and argued against excessive fiscal austerity in rich countries. On IMF reform, the G24 was adamant for deeper reform, especially on voting rights for developing countries.

8 October: Statements made at the plenary session

9 October: IMFC communiqué (deeper analysis, original document), IMFC statements by finance ministers
Summary: The short statement by the IMF’s direction setting body of finance ministers made almost no commitments and took no policy stands. It accepted G24 demands for more IMF work on managing capital flows, but made no progress on reform of IMF governance. The ministers asked for an interim update on governance reform at the end of October, an unusual step.

9 October: Development Committee communiqué (deeper analysis, original document), Development Committee statements by finance ministers
Summary: This statement by the ministers that set the direction for the World Bank was woolier than normal, with almost nothing ni the way of specific commitments or ideas. The ministers most just expressed their satisfaction with the World bank’s work and asked for a strong replenishment for IDA, which is being negotiated now.

Read detailed Bretton Woods Project analysis of the content of the communiqués and the story behind the positions.

5. Highlights of civil society meetings and other seminars

For the latest civil society news and analysis see IFIwatchnet. For a listing of civil-society events, see the Bank Information Center website. The World Bank lists events taking place in the Bank’s Civil Society policy Forum. We will be posting notes of meetings attended by BWP staff, so check back often for more details. Full listing of the offical Programme of Seminars (POS) is available on their website. A few of the POS have video available online For coverage of other events, including on the Bank’s new disclosure policy; safeguards; community perspectives on free, prior and informed consent; transparency of extractive industry agreements; energy; and Jeffrey Sachs on resource-based development, visit the Bank Information Center’s page.

6 October

7 October

8 October

9 October

Return here for highlights of meetings hosted by civil society organisations from Bretton Woods Project staff in Washington.