Ahead of the 2013 World Bank-IMF spring meetings, meetings between UK NGOs and the UK executive director to the IMF Steve Field and the UK executive director to the World Bank Gwen Hines were held on 9 April. Notes will be posted shortly.
- Background papers: Development Committee
Background papers: IMFC
- Highlights of ministerial meetings and communiqués
- Highlights of civil society, and other meetings
The 2013 spring meetings of the World Bank and IMF will take place from 18 to 20 April in Washington, DC. You will be able find links below to analysis of the communiqués as well as notes of some of the civil society and official meetings, as they become available.
There will clearly be three big topics on everyone’s minds at the meetings: Shaping all discussions will be the moves of large and fast-growing middle-income countries to develop their own institutions for development finance and emergency financial support. On the official agendas will be the World Bank president’s strategy to “end poverty” and promote “shared prosperity”, and the simmering ongoing financial crisis in the eurozone which still threatens to derail global economic prospects.
In late March, the BRICS (Brazil, Russia, India, China, and South Africa) group announced what could be the biggest shake up of the global financial architecture since the end of the gold standard in 1971, the development of new multilateral institutions for development finance and for emergency crisis support. The institutions are not fully agreed, and their design and business models will be closely watched, as it is not yet clear whether the instututions will cooperate or compete with the World Bank and IMF. Either way these developments have the potential to influence also most every aspect of the operations of the Bank and Fund, from infrastructure finance, to financial sector regulation, to extractive industries, to the operation of the international monetary system. This week, the G20 finance ministers will meet for the first time since the BRICS summit – so far the World bank and IMF have welcomed these potential competitiors, and all indications are that the G20 as a group will do so as well. However, in some rich countries there will be fear about a weakening of their control over the global economy; and there is also concern amongst civil society organisations who fear that the BRICS countries will continue the same sort of exploitation that they have accussed the Northern-dominated institutions of for so long. That may herald a focus on safeguards, the Bank’s review of which is in full swing, especially on human rights.
For the World Bank, a leaked draft of a strategy document, A common vision for the World Bank Group, revealed two overarching goals being proposed for the Bank: reducing absolute poverty to 3 per cent globally by 2030 and boosting income growth of the bottom 40 per cent of the population in every country. The proposals were heavily criticised in late March for ignoring inequality in the targets set and insufficiently dealing with sustainability. The paper’s contents were the subject of a much-hyped speech given by World Bank Group president Jim Yong Kim two weeks before the spring meetings. Much of the criticism has focussed on inequality, as many advocates have demanded explicit measures of inequality rather than just income growth at the bottom, including for example using a new proposed measure of inequality called ‘the Palma’. This strategy paper, which has already been used to inform the drafting of new country strategies even before it has been approved by the executive board, will be the main topic up for discussion at the Development Committee, though there are no expectations of dramatic changes in its content. This strategy will impact on the Bank’s wider operations, especially the Bank’s grant arm, IDA, which looks to be refocussing on big infrastructure. The strategy’s section ‘sustainability’ also came in for criticism while the Bank president is again ramping up his rhetoric, but not yet Bank action, on climate change.
On the IMF side of things, the main discussion will be about the renewed urgency over sovereign debt in the eurozone. The bungled handling of a emergency financial support package to Cyprus has reawakened fears of the eurozone sliding into a meltdown. So far contagion has not materialised, but the Cyprus mess once again highlighted concerns about the IMF’s junior role in the Troika, making it subservient to the interests of the European Central Bank and European Commission – both of which are viewed as dominated by Germany and other Northern European countries. At the very least it demonstrates the problems with the IMF’s unreformed governance structures , which allows these Northern European countries to maintain overrepresentation. The US’s failure to ratify a change in voting rights agreed in 2010, with the requisite paperwork stuck in the US legislature, has thrown this year’s already-delayed negotiations into near farce. The quagmire in Europe may be one of the reasons the IMF is working so far to develop a new line of business – doing deals with less-than fully legitimate governments in the developing democracies of the ‘Arab spring’ countries – despite widespread resistance.
2. Background papers: IMFC
The agenda is now available. The IMFC meeting starts in the afternoon on Friday the 19 April, and runs over until midday on Saturday 20 April. The agenda includes:
- Global economic and financial prospects
- Early warning exercise
- Dialogue on policy challenges
- Global policy agenda: Taking stock of implementation and the way forward
There were only two background papers available on the IMF’s website:
Background papers: Development Committee
The agenda for the spring 2013 Development Committee meeting, scheduled for 20 April, is now available, it includes:
- Opening statements by heads of institutions on recent corporate and global development issues
- A common vision for the World Bank Group
The background papers:
- A common vision for the World Bank Group
- 2013 Global Monitoring Report
- A common vision for the World Bank Group – background annex – covering what used to be called the “modernization agenda”
3. Highlights of ministerial meetings
Below we will bring the highlights from the communiqués at the spring meetings, including the G24, G20, IMFC and Development Committee. You will also be able to find detailed coverage of all communiqués in our dedicated article.
18 April : G24 communiqué (deeper analysis, original document).
Summary: The G24 communiqué has restated more strongly than ever the concerns and growing impatience of the grouping of developing countries with advanced economies’ failure to address a number of issues which the G24 has long held to be urgent. They note that another key deadline in the process of IMF governance reform has passed with no more progress, including from European countries’ regarding their commitment to reduce their disproportionate presence on the board of the Fund. The G24 also complain about the unprecedented policies of advanced economies, in terms of how they are impacting upon emerging and developing countries’ financial and economic stability. The longstanding demand to ensure the World Bank support increased infrastructure finance was reiterated. The G24 also reminded the Bank to focus more narrowly on its core mandate of poverty reduction, in particular when engaging with the UN-led process for developing a post-2015 development framework.
19 April : G20 communiqué (deeper analysis, original document).
Summary: The major themes of the G20 communiqué are jobs and growth. It prioritise that advanced economies in particular safeguard jobs and growth, while delayjng any focus on managing public debt and fiscal deficits until the medium term. Developing countries in particular will find the communiqué’s recognition of the risks of unintended negative side effects from richer countries’ monetary policy heartening, due to the concerns regarding spillover effects of the unprecedented responses to the ongoing financial crisis. The G20 reiterated the need for the overdue 2010 IMF governance reforms to be approved (currently stuck awaiting ratification in the US Congress) and reaffirmed the need for the subsequent reform process that is currently under way to ensure that the voice and representation of the poorest is protected. The communiqué highlights the importance of current World Bank and IMF work on public debt management including on the debt sustainability analysis framework, but reiterates that this falls within the need for medium term term fiscal strategies. Finally, the G20 strongly encouraged further progress toward securing automatic exchange of tax information to counter international tax avoidance and evasion, including through tax havens. The G20 also launched a new study group – which includes the World Bank and IMF and which will agree a full work plan later this year – that will look at “good practices in creating the necessary conditions for mobilising long-term financing for investment and promoting a sound investment climate.”
20 April : IMFC communiqué (deeper analysis, original document,ministerial statements).
Summary: The 27th meeting of the IMFC focused on the unresolved risks and challenges to economic recovery. In line with the changing tone of recent statements from both the Fund’s chief economist and the managing director at the spring meetings, the communiqué urges advanced economies to avoid engaging in procyclical policies, meaning deep spending cuts in the middle of a downturn which unnecessarily damage potential for economic recovery and growth in jobs. This confirms a trend begun with the acknowledgement at the annual meetings in October that overly-optimistic forecasts by the Fund may have contributed to excessive contraction in government spending, inhibiting growth and impacting negatively upon job creation. The IMFC calls on emerging market and developing economies to rebuild policy space, by which is meant using growth to rebuild buffers in terms of fiscal surpluses and foreign reserves. The statement also accepts that countries exposed to volatile capital flows can use capital flow management measures alongside other macroeconomic adjustments. It also repeats the now seemingly repetitive statement that the overdue reform of the Fund’s governance, agreed in 2010 with a deadline of October 2012 implementation, be ratified (with only the United States having failed to do so) and the commitment of the IMFC to seeing another review of voting rights at the Fund be completed on time by the end of this year.
20 April : Development Committee communiqué (deeper analysis, original document,ministerial statements).
Summary: The Development Committee communiqué noted progress on the MDGs and called on the Bank’s active engagement in the post-2015 agenda. It also confirmed strong support for World Bank president Jim Yong Kim’s strategy development and vision, including the two goals on poverty eradication and promoting shared prosperity, but noted the scale of the ambition. This included a push for continued engagement on climate change and environmental sustainability, but it failed to support the Bank’s efforts on promoting carbon markets. Furthermore, it called for a robust IDA replenishment, confirmed its support for the overarching theme and special themes, including the role of IFC and MIGA, which were also called on to further push the Bank’s work on the private sector. It also welcomed the Global Monitoring Report, and noted concerns about the Sahel and Horn of Africa region. Finally, it expressed support for the Bank and the IMF’s engagement in MENA countries and in Burma.
See our detailed coverage of all communiqués in our dedicated article.
4. Highlights of civil society and other meetings
The World Bank’s schedule of civil society events taking place within the IFI buildings is available. Other events happening outside the World Bank and IMF buildings you can try the calendar maintained by Bank Information Center. It is also worth noting that many of the official events organised by the Bank and Fund are being webcast live and can be watched online, and the World Bank has a viewing guide to the main sessions.
Below we will post notes and minutes of sessions attended by the Bretton Woods Project and other NGOs.
- The private sector and poverty eradication: Using results measurement to drive for change – organised by the IFC and the Bill & Melinda Gates Foundation
- The private sector and poverty eradication: Experiences from the health sector
- Colombia case study: results measurement and poverty eradication
- Frameworks to support IMF policy advice to low-income countries – organised by the IMF
- What next for the Eurozone? macroeconomic policy and the recession
- Bending the arc of poverty – organised by the World Bank
- IDA results and measurement – organised by the World Bank
- CSO meeting with Ms. Ksenia Yudaeva, G20 sherpa, Russian Federation
- Approaches to private climate finance – notes to follow shortly
- Leveraging private finance with public money: Positive Innovation? Corporate Welfare?
- An update and briefing on the global agriculture and food security program (GAFSP)
- IMF reform in developing country perspective
- Doing Business at the crossroads: Ten Years – event hosted by Center for Strategic and International Studies
- After recent court decisions: how can sovereign debt workouts become fair, comprehensive and accountable?
- The challenges of advancing sustainability at the World Bank
- Financial and housing crises, the Bank’s safeguards and the right to adequate housing
- From the Arab revolutions to global austerity trends
- Preliminary report on phase I of the safeguards review consultations – notes available soon
The 2013 IMF and World Bank spring meetings ended on 21 April 2013 with no large surprises. The tone of the meetings was set by a controversy that erupted in academic circles at the beginning of the week – over whether famous economists Kenneth Rogoff (a former IMF chief economist) and Carmen Reinhart had made an calculation error when finding a threshold above which too much public debt would automatically stall economic growth. The IMF’s chastising of the UK for excessive austerity and the increasing use of the phrase “medium-term” to describe fiscal consolidation strategies in the communiqués of the IMFC and G20 showed that a corner may have been turned. That is not surprising given the change of governments that occurred in France and Japan since the last set of meetings. The balance of power in the G20 and IMFC now rests with the less austerity camp, rather than the more-and-faster austerity camp headed by the UK, Canada and Germany.
For the IMF, however, there was little new in its policy prescriptions. While the IMF trumpeted a new loan agreement with ‘Arab spring’ spark country Tunisia, the big country of that region, Egypt, again slipped out of the IMF’s grasp, with the stalling of negotiations at the beginning of the week. Meanwhile, the international trade unions continued to complain loudly about the IMF’s policies towards collective bargaining and labour unions in European countries with IMF programmes. Their report released at the beginning of the week showed insufficient change in the way the IMF handles conditionality. The same message is true of the governance side where even insufficient change, in the form of the 2010 governance reform, is not happening because the US has failed to ratify the agreement. The annoyance of the developing countries at the continued delay has started to show through even more than normal .
Things were cheerier for World Bank president Jim Yong Kim, who received the endorsement he had desired of his overarching vision for the World Bank. This was not in doubt – ministerial meetings very rarely throw policies back for reworking – so now all eyes will be on Kim’s elaboration of his detailed strategy for ending poverty and promoting shared prosperity, due at the annual meetings in October. The vision received a cautious welcome from civil society, but concerns were raised about the lack of mention of human rights and details on how the Bank will tackle inequality. Civil society also continued its push for upward harmonisation in the Bank’s safeguards as part of the two year review initiated at the 2012 annual meetings. The Bank’s push for the private sector as a key development partner was also under scrutiny by civil society, including a discussion with the International Finance Corporation (IFC, the Bank’s private sector arm) on it’s accountability mechanism’s, the Compliance Advisor/Ombudsman, audit of the IFC’s use of financial sector investments, and a consultation on its Doing Business rankings. However, with the Bank’s leadership focused on ‘change management’, fixing the nitty gritty problems might be overlooked.