Steve Field, UK IMF Executive Director
Tom Duggan, Advisor to ED
Ashleigh Brigden, HM Treasury
Emma Seery, Oxfam GB
Julia Mehigan, Christian Aid
Maeve Bateman, Christian Aid
Tim Jones, Jubilee Debt Campaign
Bandula Kothalawala, TUC
Sargon Nissan, Bretton Woods Project
Steve Field: We see this as an opportunity to understand your objectives and would like to understand better what civil society seeks to get from this discussion.
Oxfam: This is an opportunity to understand better the IMF and UK views on key issues, and relating to the items on the agenda.
BWP: These are generally used to discuss advocacy positions and to permit information sharing.
SF: What are we trying to achieve at this particular meeting: we see great value in engaging with others, such as NGOs, to get a different perspective on IMF policy and lending issues. The question is whether we achieve that by having a meeting just a week prior to Spring meetings – where the UK has a chair but only one voice, though a reasonably successful one in recent years, for influencing Fund policy in a number of important respects.
This could be better achieved by being more strategic, thinking about the thematic policies that we wish to influence and thinking about them in a longer-term way. E.g. should we meet when the IMF publishes its work programme (Nov/May) in order to look ahead for next 6 months, and ask ‘what are the issues’ CSOs care about particularly.
Agenda Item 1
BWP: We have three general concerns about IMF programme engagement in the middle east in the wake of the Arab Spring: 1) Mandate and legitimacy of governments that are being dealt with. For example, the lack of parliamentary scrutiny to hold governments to account. 2) The lack of transparency practised by either the IMF or governments in programme negotiations. 3) Fiscal policy, particularly tax and subsidy reform, which could hit the poorest people hard in the absence of protections.
SF: The legitimacy of governments the IMF is engaging with: the IMF does not make a judgement on the legitimacy of a country’s government itself; instead it takes direction from its membership, which is the right way to do business.
Secondly, there is an effort on behalf of IMF staff to reach out and try and engage with other groups, e.g. during surveillance, and they do seek to engage with civil society and private sector and so on, as a part of standard surveillance – and I believe they are seeking to do more of that, and to build in more outreach.
Focus on fiscal policy: Part of the reason for that is fiduciary, e.g. where there may be a program, their concern is about the durability of a program, and its sustainability. There is an attempt to look at the impact on the poorest people as a result of any fiscal policy changes agreed with the IMF, and we can certainly reflect on that further.
Oxfam –the loan agreement is on the table in Egypt’s case. [not clear what the question was here]
SF – Note there is a difference between transparency in normal surveillance and during specific negotiations about a programme, which have some inherent constraints over what can be debated in public. As I see it, your demand is for the IMF to internalise and keep in mind the views of other groups in society, when they are engaging with country authorities. .
Energy policy subsidy question – we agree with the IMF view that these are poorly designed and the benefits tend to accrue to richer groups in society . The Fund’s basic approach of promoting reform of energy subsidies is valid, but we recognise your point on the need for reform to be gradual and take account of the impact on the poor.
TD: The Fund recognises the need to be gradual in implementing such reforms, and is focused upon medium term energy subsidy reform.
SF: Labour rights – this is an area of active interest in the fund, e.g. the recent work on jobs and growth, focus on inclusive growth. When they are advising countries about growth supporting policies that do think about inequality issues at the same time.
Christian Aid – One particular concern is that the informal sector is often left out. These sectors that are often very large, include some of the poorest, and are currently not considered or included in debates.
TUC – ITUC affiliated – we make representation to the government, which we have just sent to the Chancellor, which I hope to send to you, these include some of the concerns that have been raised today already.
Agenda item 2 – IMF lending to Jamaica
JDC :Our concern is that Jamaica, though massively indebted, is chronically so – since the 70s, the IMF in a recent review of the Caribbean said that they have been in a high debt and low growth trap for the past 2 decades, adding inevitable fiscal consolidation
We believe it needs cancellation, and have been calling for this for 15 years. We sense that the IMF has been keen to ensure there is debt management, though it can be difficult for local governments to do that.
At the moment, Jamaica’s developmental outcomes are highly problematic and we believe that a major debt restructure is needed.
SF: The IMF made a statement yesterday, as an update, though we are yet to receive any papers, so there’s not a great deal I can tell you at this stage. We can have a separate conversation at the time, if NGOs desire, but until papers come to the board it is hard to say more.
My understanding is that one of the prior actions was some form of debt write-down.I can understand your desire to see a bigger contribution from private creditors, and rather less of internal consolidation. On the specifics of Jamaica, we’ll have to wait.
JDC – the debt swap, or reduced interest rates, was tried in 2010 but is only on domestic debt, which in our view is back to front, as the external debt is causing the balance of payments difficulties. Beyond that I’ve not found out the reduced interest rate, and none of the principal. Jamaica’s deficit is entirely due to debt servicing, otherwise enjoying a primary surplus. Ultimately the lenders lent at high rates as they knew there was a good chance they wouldn’t get it back, and currently the Jamaican people are required to repay it.
SF: Hester Coutanche , on the World Bank side, is the person dealing with Jamaica, and perhaps you can have a conversation with her which we can facilitate.
Agenda Item 3: Quota reform process
SF: (In response to a request for information sharing regarding progress on quota reform processes)
The first thing to recognise on this is that it’s complicated, we have been pushing reform for some time. Clearly when many interests are involved that is not straightforward, and the fact that it is quite difficult should be recognised. Progress has been made however.
As far as the 15th review is concerned, the timetable has been agreed and remains the same. As you say the objective is to complete that review by the start of next year. The next piece of work on that will follow once we’ve received new data, which is due to arrive in June, so there will be more work done then.
The other thing worth pointing out is that it’s quite difficult to complete the 15th review until the 14th is done, and that rests on the US ratification. We are expecting a number of hearings in Congress to occur later this month and next month, where they will scrutinise the decision made in the context of the 14th review.
Finally, the US we know is very committed to taking that through, and the administration are putting some weight behind it.