Governors of the World Bank and IMF gather in Washington DC, from 17 to 19 April 2015. The civil society policy forum will take place 14 to 17 April. This page will be frequently updated before and during the spring meetings to include analysis of the communiqués, notes from meetings, background information and more.
- Pre-meetings background
- Agendas and background for papers for committee meetings – IMFC and Development Committee
- Development Committee – World Bank and IMF
- International Monetary and Financial Committee (IMFC) – IMF only
- Highlights of official meetings and communiqués
- Highlights of civil society meetings, and other meetings and seminars
- Conclusions and wrap-up
1. Pre-meetings background
As the World Bank and IMF prepare to meet in Washington, we set out the key issues on the table during the week.
Summary
With the World Bank and IMF due to discuss the UN’s Financing for Development conference, including the Sustainable Development Goals, they come into this year’s meetings under pressure from new rising powers. While the rhetoric of the IFIs continues to emphasise pro-poor growth, deeper digging throws up questions. The Bank is likely to be taken to task over its performance on human rights, while the Fund will once again stridently demand resolution of the longstanding governance reform impasse but to little effect.
The official agenda for both the World Bank and the IMF is set out in the Development Committee paper: “From billions to trillions” on Financing for Development (FFD) and the achievement of the Sustainable Development Goals, both processes under the UN. Written together with other Multilateral Development Banks (MDBs), it outlines how the MDBs and the IMF can support the implementation process. Suspiciously missing from the FFD paper, but subject to much speculation, is the World Bank and the IMF’s relationship with ‘rising partners’, most significantly China’s Asian Infrastructure Investment Bank (AIIB). The AIIB is widely portrayed as a direct challenge to the Bretton Woods institutions’ (BWI) hegemony. The month before the meetings saw many of the BWI major stakeholders (such as UK, Germany and France) signal their intention to join the AIIB, forcing the BWIs to officially downplay the new bank’s significance as a competitor to the existing global order. Fund managing director Christine Lagarde said she was “delighted” to cooperate with the AIIB whilst Bank president Jim Yong Kim in his pre-meetings speech, stressed that there is “more than enough work to go around”.
In his speech Kim was also keen to highlight the reduction in poverty already achieved. That said, more astute observers will be aware that the bulk of the reduction has taken place in China, which has done so largely by rejecting policies proposed by the Bank elsewhere. Despite its rhetoric around ‘pro-poor growth’ the Bank seems to continue its support for financial deepening, meaning increasing efficiency of the financial sector and improved provision of financial products, for example, by actively promoting the expansion of insurance coverage.
Outside the official agenda the World Bank’s restructure continues to create controversy. Although Bank management has downplayed any rifts, it has launched an investigation into one staff member’s alleged leaking of the safeguards draft. Some believe that this also represents retaliation by the Bank against internal criticism of Kim’s leadership.
Missing completely from the agenda is the Bank’s internal review of its resettlement policies, which led to an admission by Kim only last month that the Bank’s record on dealing with the resettlement of populations is a “cause …[of] deep concern”. The Bank made the reports public just after it closed the second phase of its controversial safeguards review, leading to suspicions amongst civil society organisations that the findings were held back deliberately to avoid influencing the review. The findings are also significant as the Bank continues its ‘big push’ for mega infrastructure projects, where resettlement is often unavoidable.
Problems with the Bank’s private sector arm, the International Finance Corporation (IFC), remain firmly on the CSO agenda. Just before the meetings a group of CSOs provided further evidence of the problematic human rights record of the IFC’s investments in financial intermediaries, with follow up discussions expected during the week both on and off the record.
At the IMF the governance impasse continues to be a sore in its side, and is widely considered to be one of the factors behind China’s establishment of the AIIB. This is the penultimate gathering of ministers before the December 2015 deadline, the date set by the Fund’s Articles of Agreement for finalisation of its 14th quota review begun in 2010. The widespread consensus that there will be no further progress nor proposals to bypass the impasse suggests the consequences of this failure of leadership will continue to be felt in the evolving architecture of international financial governance. We can therefore anticipate a strong stance from the Fund this forthcoming week, but while sounding tough it will be little more than hot air.
The IMF, like its sister organisation, seems to endorse pro-poor growth in its World Economic Outlook update, in particular setting out a case for increased public investment, albeit obscured by the usual economic jargon. However, with many championing the private-public nexus, it is hard to tell if the Fund is actually signalling its support for more public spending or yet more enabling of private sector investors. The IMF’s position is further muddied by its own silence in terms of policy guidance. Previous meetings have featured strident calls by the Fund for states to maintain careful fiscal management, avoid over-indebtedness and invariably advocacy for medium term consolidation. This time, debt sustainability issues do not even make it into the Development Committee paper. The paper does make positive noises on tax reform, but there is no mention of any strategy for multilaterals and the UN to take this forward.
IFI-watchers should also look out for an IMF statement on Greece. The Greek government has prioritised IMF repayments over other creditors (currently half a billion euros with more to come in May), yet comments coming just days before the Spring meetings suggest that Greece may not be willing to honour even its IMF commitments without any progress in negotiations with its European counterparts (who also happen to be heavily represented on the Fund’s board). The Fund will no doubt want to characterise discussions with Greece as amiable and depict itself as a trusted broker, impervious to political pressure, which may raise the odd eyebrow amongst more seasoned observers.
2. Agenda and background papers: International Monetary and Financial Committee (IMFC)
The agenda for the spring 2014 International Monetary and Financial Committee meeting will be published here along with background papers, as soon as it is available.
Agenda and background papers: Development Committee
The agenda for the spring 2015 Development Committee meeting, scheduled for Saturday 18 April, is now available. The background papers are also available:
- From billions to trillions: transforming development finance post-2015 financing for development: multilateral development finance
18 April: Development Communique communiqué
Sounding a note of cautious optimism on growth, the Development Committee (DC) calls for vigilance to “protect hard won gains”. It takes a braver line on oil and commodity prices, predicting an income shift from oil exporters to importers which will generally benefit developing countries. Unsurprisingly, in the shadow of the Asian Infrastructure Investment Bank and the forthcoming UN Finance for Development meeting, there is a ‘team spirit’ push for cooperation amongst the Multilateral Development Banks.The Committee emphasises financial deepening, with supportive references to catalysing private finance and PPPs, particularly for large scale infrastructure projects. There are compliments for the Bank’s role in ebola and climate financing but little reference to gender, on which the Bank is developing a new strategy. There is a reference to the Bank’s new draft safeguards , but predictably nothing about the huge concerns raised by civil society, particularly in response to the Bank’s recently publicised failure on resettlement plans.
3. Highlights of official meetings
We will bring you the highlights from the communiqués at the annual meetings – including the G24, IMFC and Development Committee – as they happen.
IMF meeting: 17-18 April, Provisional agenda . Other background papers are also available:
- Managing Director’s Global Policy Agenda to the International Monetary and Financial Committee: Confront Global Challenges Together, 13 April 2015
16 April: G24 communiqué
Summary
A longer than usual communiqué by the Intergovernmental Group of 24 (G24) is marked by an emphatic and blunt tone, reflecting the scale of developing country frustration and concern on a number of areas, from governance to UN negotiations. The G24 tell richer states unequivocally to put their own economic house in order, without putting the burden of adjustment and risk on developing states as occurred in the past. But it is in the realm of new institutions and negotiations, especially the UN’s Financing for Development Conference (FFD), where the G24 really put their cards on the table. They address taxation, debt resolution, “adequate, new and additional finance” for climate change mitigation and adaptation and a call for an enhanced role for Multilateral Development Banks. More tellingly, they highlight how alternatives to the Bank and Fund are emerging, from the BRICS’ Contingent Reserve Arrangement to the Asian Infrastructure Investment Bank are linked to the ongoing failure of IMF reform to be ratified.
17 April: G20 finance ministers communiqué
Summary
This Spring meetings G20 communiqué had, as has now been the case for some time, strikingly little to say of note. And nothing of surprise. Of course they make the usual noises about the global economy, sounding a touch more optimistic than previously but noting the risks to the global economy. Though there’s not a word about Greece, or the potential for a chaotic exit from the Euro (or Grexit), mucking up the IMF forecasts, which had once again to be downgraded. After years of over-optimism, you would think they had learned their lesson.
The G20 looks forward to the Financing for Development summit in Addis Ababa and Conference of Parties 21 in Paris, reassuring developing countries of an “enabling environment”, though without much basis for optimism. Equally pessimistic is the prospect of any solution the IMF reform impasse. Perhaps they could do their next photo-op down the road at Congress, and take the opportunity to show just how upset they are? For albeit very divergent reasons amongst the European and BRICS members of the G20, especially given the hubbub surrounding the Asian Infrastructure Investment Bank, these might just be crocodile tears.
18 April: IMFC communiqué
At first glance the latest IMF Comittee statement draws out the familiar debate over how to manage a still-ailing global economy and achieve growth, by more cuts and reform or by prioritizing investment, demand and jobs. But given the context of looming UN summits on Financing for Development, Climate and the post-2015 goals, there may also be something rather significant lurking between the lines.The old balance of these and G20 communiqués going back 6 years has oscillated between hawks prioritizing fiscal sustainability, and doves seeking jobs and growth. But it’s hard not to feel that the hawks are currently winning out. This is the new mediocre that IMF managing director Christine Lagarde has christened. The dilemma is best expressed in the communiqué when it states that the IMFC membership will be “pursuing a mix of macroeconomic policies that seek to achieve the urgent need to promote growth, while preserving fiscal sustainability and financial stability, and accelerating the design and implementation of structural reforms”. However, it is also possible to detect a rather more ambitious and significant subtext, a new big idea even: the “new multilateralism” – that will seek to “build a new global framework for sustainable development through 2030 and beyond”. And with this the IMF seems to be being placed at the centre of building the model of the future global economy.
4. Highlights of civil society meetings and other seminars
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 Bretton Woods Project and partner organisation staff, so check back often for more details.
Below we will post notes and minutes of sessions attended by the Bretton Woods Project:
14 April 2015
16 April 2015
- Causes and consequences of income inequality: A global perspective
- Gender and development: What is happening now?
- Independent Evaluation Group update
- Aligning the financial system with sustainable development
- Development policy financing retrospective – Emerging lessons and findings (courtesy of Eurodad, includes link to Bank presentation on findings of DPF review)
17 April 2015
5. Conclusions and wrap-up
World Bank and IMF staff were at pains to couch this year’s spring meetings as forward looking, cooperative and inclusive – the UN Secretary General was even present at the Development Committee meeting. However, just three months before the UN Finance for Development conference in Addis Ababa, the still-ailing state of the world economy and negative news coverage proved formidable challenges for the hosts.
In fact, a tone of pessimism marked the private interactions of officials, media and civil society throughout the week. For the IMF this was the loss of hope for a positive solution to the Greek crisis, which avoids further needless suffering for the Greek people, or any prospect of achieving governance reform at the IMF. For the Bank, it was not just the litany of spectacularly bad press over its controversial resettlement policies, carbon investments or staff discontent. It was also the pervasive discussions in the hallways about the ‘existential’ decline of the institution in the face of its newly-minted Asian rival, the Asian Infrastructure Investment Bank (AIIB). This pessimism also infiltrated the prospect of positive outcomes from the litany of major summits due in the second half of 2015, despite the fine words contained in communiqués and press conferences.
The day before the meetings started a coalition of journalists launched a series of articles exposing the World Bank’s broken track record in protecting the poor, including the implementation of its resettlement policy. This followed on the heels of a March release of internal Bank reports on resettlement, that ‘caused great concern’ to Bank President Jim Yong Kim, but not sufficient to merit discussion during the meetings. The media launch, however, forced Kim to respond, reiterating the need for better implementation of the policy, but also arguing that land is needed to push infrastructure projects forward and that consequently additional substantial resettlement is inevitable. He seemed to suggest that fears over resettlement must not stand in the way of progress. So much for ‘do no harm’. His call for “strong safeguards” was of little comfort to those who have monitored the development of the much criticised draft new safeguards framework, widely believed to lower the standards.
Similarly, on the ‘less than stellar’ column of the ‘do no harm’ tally sheet, the Bank’s private sector arm, the International Finance Corporation (IFC) was once again in the limelight as CSOs exposed the human rights impacts of IFC investments through financial intermediaries. While the IFC contends that it continues to make progress and learn from its mistakes, its accountability mechanism, the Compliance Advisor Ombudsman, along with CSOs continue to maintain that progress to date is insufficient and that financial risks and risks with human lives cannot be equated.
To add insult to injury, Kim’s call that “We need to get rid of fossil fuel subsidies now”” was challenged in a CSO report claiming that, Bank support for fossil fuels in fact increased in 2014. Moreover, as reported during last year’s annual meetings, staff discontent with and anxiety about the ongoing restructure continued to spill over into discussions outside flagship events. Some wondered out loud whether Kim would survive his term.
A major theme of formal and informal discussion was the true significance of the establishment of the AIIB. The Bank’s line is consistent with its message in the aftermath of the launch of the Brazil, Russia, India, China and South Africa (BRICS) New Development Bank: the massive financing gap required to reduce poverty makes all new entrants welcome. The Bank’s pushing of the merits of cooperation was evident in the inclusion of the UN Secretary General and other heads of multilateral development banks (MDBs) in the Development Committee meeting. Additionally the document on the UN Finance for Development (FFD) process, prepared for the Committee in advance of the spring meetings, was drafted by multiple MDBs. The mantra is clear – repeat after me: let’s meet the massive financing gap by leveraging private sector investment, particularly for infrastructure, through innovative financing mechanism and the inclusion of new actors, such as pension funds.
The Fund is doing rather better than its sister IFI, apparently recovering very well after its premature obituaries written in 2006/7. It seems to be quietly acquiring increasing relevance and is expanding its scope for action and influence.
This spring meeting period was perhaps the most significant for some time. The UN’s FFD conference, Sustainable Development Goals, and climate summit were anticipated and there was plenty of jostling. But the pessimism about the prospect of positive outcomes cannot be ignored. While strong words and clear divisions are present in the UN negotiations, a sign of powerful states’ willingness to compromise can be seen in the benign and consensual language in the various communiqués and public statements. While recognising the importance of issues as diverse as infrastructure investment, IMF governance reform and climate finance, the communiques contained no movement. On Greece, the IMF signalled it stands squarely behind its European and US bosses.
The IMF and World Bank, like the G20, are led by the constellation of the most powerful countries. The reaction to China’s intervention, especially on the Bank’s turf, provides an insight into how the most powerful states think, and how they would like other states to conform. There was little sign of these states budging from their long-held views. Given this robust disinterest in pushing for outcomes that many developing countries and civil society advocate, the conclusion must be that these spring meetings have been significant but not necessarily positive.
