IFI governance


World Bank-IMF spring meetings 2016

6 April 2016

Governors of the World Bank and IMF gather in Washington DC from 15 – 17 April, 2016. The civil society policy forum will take place from 12th to 15th 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.

  1. Pre-meetings background
  2. Agendas and background for papers for committee meetings – IMFC and Development Committee
  3. Highlights of official meetings and communiqués
  4. Highlights of civil society meetings, and other meetings and seminars
  5. 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.

The poor state of the world’s economy will challenge both the World Bank and the IMF as they try to showcase their work at the spring meetings. The IMF’s tentative willingness to discuss capital controls and the wisdom of labour market reform is a sign of the prevailing anxiety at the Fund. The Bank will look to put the safeguards review to rest and get on with the work of the IDA replenishment and its shareholder review, while trying to justify the expansion of its role in climate finance, infrastructure and even in addressing the migrant crisis.

For the World Bank, this year’s spring meetings are set in the context of the next replenishment round of its low-income country lending arm, the International Development Association (IDA), which kicked off with a first meeting in mid-March. With IDA back in the limelight, the pressure for the Bank to remain relevant becomes even more acute, while perhaps providing some relief to the extensive focus on internal problems over the past few years.

At the top of the World Bank and IMF’s development committee agenda is forced displacement and development, referring to the ongoing refugee crisis, with the Bank arguing that it can hold a key role in resolving the crisis, including through its self-proclaimed “ability to develop synergies with others, such as the UN”. In the background document the Bank, however, failed to mention its own impact on displacement of populations, which came to prominence only a year ago when president Jim Yong Kim was forced to admit that the Bank’s record on dealing with resettlement issues was a cause of “deep concerns”, after a long delayed internal review was finally made public. The Bank’s Inspection Panel is planning to bring some attention to the issue during the meetings with the release of the first briefing in a new series on “emerging lessons” from its 22 year history, aptly on involuntary resettlement – let’s hope the donors are paying attention.

A question that remains is how much of the discussion on forced displacement will spill over into the inaugural Global Infrastructure Forum, an MDB commitment under the UN Financing for Development 2015 agreement, which is to be hosted by the World Bank during the spring meetings. Concerns remain over how much this process will primarily facilitate controversial large scale projects, often with associated displacement of communities, and push problematic public-private partnerships where the benefits for poor people are often vague or simply absent.

For the past few years the World Bank’s safeguards review has been one of the prime topics on the civil society agenda, but as the final phase of consultation has now closed, CSO activity has reduced. Nevertheless, this should not be seen as implicit support for the proposed outcome, as continued serious concerns that the framework is much too weak to adequately protect affected communities and the environment remain. Moreover, despite the Bank’s targeted efforts to work more closely with the UN on several fronts, a clear commitment to the UN’s universal declaration of human rights remain absent. Throughout the consultation, concerns have been repeatedly backed up by several prominent experts, including the UN special rapporteur Phil Alston and hard hitting criticism from former Bank staffers themselves.

Displeasure and frustration with the Bank’s continued disregard for the concerns of civil society and affected communities will also be expressed through a protest in front of the Bank on Friday 15 April. The protest will focus on the dilution of the Bank’s safeguards and will be used to challenge the notion that the World Bank’s new international poverty line of $1.90 provides an useful marker of extreme poverty worldwide, particularly as it ignores the extreme poor in middle income countries.

Another topic featuring on the side lines is the follow up to the Paris Agreement on climate change, signed off under the UNFCCC process in December last year, with a new Bank climate action plan being launched just before the meetings. Besides what now seems to be a compulsory high level panel, the Bank is batting for a role in the implementation of the agreement in its progress report on disaster risk management for the development committee, including through IDA, but concerns remain about how much the Bank’s work is actually contributing to rather than mitigating climate change.

Civil society is expected to continue to pressure the International Finance Corporation (IFC, the Bank’s private sector lending arm) to take concrete actions to ensure the transparency and accountability of its investments through financial intermediaries (FIs), by making information about its investments in FIs public. The urgent need for international financial institutions to ensure that investments through FIs do not violate the rights of community members was tragically brought to light by the murder in March of Honduran activist Berta Cáceres. Civil society will no doubt hope that the development background of the IFC’s new CEO, Phillipe Le Houérou, will make him more likely to drive IFC to action. The likely exposure of new problematic cases of IFC investments in FIs by civil society during the spring meetings, and the light shed on IFC investments in companies that use tax havens will perhaps focus the attention of Mr. Le Houérou and his colleagues.

Another topic on the development committee’s agenda is the ongoing World Bank shareholding review, with a “formula simulation tool” being made available to executive directors, so that they can review the impact of the different options for a new formula representing GDP and IDA contributions. In particular how to account for IDA seems to be causing concern – clearly the simulations must throw up some uncomfortable options for shareholders – as although the interim report states that the Bank still aims to come to a conclusion by the annual meetings, it calls for “intense work” to “resolve the outstanding issues”.

Gender has been a major self-congratulatory theme of both the Bank and Fund’s recent research and PR, and in the case of the Bank, their gender strategy is now in the very early stages of implementation. The UN High Level Panel on Women’s Economic Empowerment (HLP), featuring a host of big names including Fund managing director Christine Lagarde and Bank president Jim Yong Kim, will conduct its first consultation during the spring meetings policy forum. This consultation is the very first of the HLP’s work, and should culminate in a report on the topic to the UN General Assembly in September.

The IMF Committee will no doubt be grappling with the ever worse global economic situation. Given they’ve been grappling for more than half a decade, signs of cracks in the intellectual edifice of the Fund are getting clearer. The decades-old battle to force the IMF to admit that capital controls are a legitimate policy tool to deal with financial risks, especially contagion, were partially successful with 2012’s ‘institutional view’ which grudgingly accepted this fact. Now, we can see the depth of concern that exists from the fact that this (at the time painful) debate is now being re-examined by the Fund.

Teaser chapters of the forthcoming World Economic Outlook (WEO), released in the days before the meeting, reveal yet another sacred tenet of the Washington Consensus that is being questioned in the Fund’s hallowed halls, albeit extremely tentatively (and in the usual techno-speak designed to send you to sleep). The WEO teaser suggests that maybe – just maybe – the sorts of aggressive labour deregulation that the Fund is historically associated with may be a bad idea in the teeth of a crisis and can worsen income distribution and reduce the income of the poor according to a UN expert. Put into Fund-speak, this translates to admitting that reforms weakening employment protections and reducing unemployment benefits “may further weaken demand through wage and price deflation, which can increase real interest rates in countries where monetary policy is already constrained”. Peter Bakvis of the International Trade Union Confederation remarked that “Trade unions have frequently made these points, in particular in European countries where the IMF has encouraged labour market deregulation and reduction of unemployment and other benefits during the last several years of recession and stagnation. The paper appears to agree that these policies have contributed to deflationary trends and the stalled recovery in Europe.

Civil society attending the meetings, and specifically the Bank/Fund policy forum, will be confronted by some changes following complaints in the wake of unilateral changes imposed to seminars organised by CSOs, and to the general purpose of the forum. CSOs have been assured that the Forum will no longer be virtually invisible (including to pesky members of the press) in the websites of the Bank and Fund, with support for more meaningful interaction with Bank and Fund officials. We will report back to let our readers know quite how far these promised changes went.


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

The agenda for the spring 2016 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 2016 Development Committee meeting, scheduled for Saturday 16 April, is now available. The background papers are also available:

3. Highlights of official meetings and communiqués

We will bring you the highlights from the communiqués at the annual meetings – including the G24, IMFC and Development Committee – as they happen.

14 April: G24 communiqué

This year’s G24 communiqué, the alternative view to the dominant narrative from developing countries, balances their desire not to downplay their own economic prospects with their large and urgent need for money. It has not escaped these countries’ attention global tax reform might go furthest in achieving that, strongly calling for inclusion in tax reform processes on equal footing. They equally continue to demand more inclusion in the governance of the international financial institutions, calling for continued quota and voice reform.


15 April: G20 finance ministers communiqué

The G20 communiqué sends a clear signal – the risk of economic crisis is real. The focus of the G20 is therefore growth, growth, growth. While the Panama Papers did get a mention on tax reform out of the G20, much more will be needed to achieve a fair and transparent system. Meanwhile, the stream of call to mobilise private capital to address climate change and infrastructure needs continue, affirming the G20’s approach to addressing global problems is MDB-led rather than UN-led.

15 April: IMFC communiqué

The IMFC communiqué reflects the consensus position of the finance ministers of the IMF. Much like the G20, the IMFC signals crisis is on the horizon meaning growth must be prioritised, recognising the need for additional and precautionary financing to low income countries. It also claims that central to establishing the Global Financing Safety Net is an adequately resourced, firmly established and newly legitimate (due to quota reform) IMF, leaving the institution’s existential crisis in its past.   


16 April: Development Committee communiqué

The  Development Committee communiqué starts on a gloomy note, with concerns about the economy and the migration crisis, while at the same time trying to boost the interest in the World Bank as it kicks off its new fundraising drive for IDA 18. Apart from that, much was about ‘partnerships’, in particular with other MDBs, the UN and the private sector. More controversial aspects, such as the Bank’s social and environmental safeguards review and the Bank’s shareholding review, were only mentioned in passing.

4. Highlights of civil society meetings and other seminars

For a listing of civil society events, the World Bank lists events taking place in the Bank and IMF’s civil society policy forum.
We post 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. The notes are aimed at providing a general idea of conversation and discussion at the spring meetings and are not necessarily complete or a fully accurate representation of participants’ remarks.

12 April 2016

13 April 2016

14 April 2016

15 April 2016

16 April 2016

17 April 2016

5. Conclusions and wrap-up

Stormy seas and trouble ahead seemed the theme of this year’s World Bank and IMF spring meetings with concerns over the poor global economic outlook and the refugee crisis weighing heavily on the minds of management and staff alike. The Fund and Bank also found it difficult to escape the looming shadow of the Panama Papers.  

The overarching theme of this year’s spring meetings was doom and gloom over the global economy, coupled with concern over how to resolve the refugee crisis. As a perhaps unwelcome addition, the release of the Panama papers before the meetings, meant that it was hard to attend a panel without someone making a reference to the story coupled with the odd dig at those exposed to date (the UK prime minister was a favourite target).

The Panama papers leak framed not only the announcement of seemingly significant changes to the Bank and Fund’s work on tax, but also on the entire policy framework on global tax reform cooperation. The G20 indicated that its European members’ proposal of data exchange on company beneficial ownership registers and new registers of trusts was accepted, but many feel that this is a half-hearted step given that the information will not be made public and therefore does not represent a step-change in exposing tax practices harmful to developing countries and indeed taxpayers everywhere.

In Sunday’s early morning Fiscal Forum Conference, IMF managing director Christine Lagarde, gave the most detail yet on Tuesday’s forthcoming announcement of a platform involving the Fund, the Bank, the OECD and the UN. Civil society has long called for the UN to have primacy in coordinating the needed discussions over tax reform, decrying the fact that the OECD ‘rich countries’ club’ would consult but not involve developing countries in designing new tax rules. Ostensibly this appears an opening towards the involvement of developing countries in writing tax rules, rather than just implementing them. However the smart money suggests the real winner may be the Fund, who’s Fiscal Affairs Department has been vying to usurp the OECD’s central role for some time. This rather brings into question the focus – or more precisely lack of it – on the Financing for Development (FfD) follow-up process kicking off in New York at the UN the day immediately following the spring meetings. Disappointingly, senior finance ministry officials and Fund directors alike indicated repeatedly to CSOs that the FfD follow-up is a summit too far and not significant enough for them to prioritise or even – for the most part – attend. The only communiqué to even mention FFD came from the G24.

The IMF’s traditional role of monitoring and safeguarding the global economy looks set to be back in the frame more prominently. It is now deemed to be the key institution at the “apex” of the world’s Global Financial Safety Net (GFSN), a new buzzword meaning the patchwork of partial and emerging regional financial mechanisms intended to act in crisis. Given the only one to have ever dispersed money is the European Stability Mechanism for the Eurozone, and that this has not exactly always gone swimmingly, it sounds more like a fancy term for reiterating that the IMF remains the ultimate backstop but others also need to step up. Speaking of Greece, the Fund brushed off media questions about its intentions to lend to it again and whether the key dilemma – the demand that European creditors (including powerful members on its board like Germany) accept the need to ‘haircut’ some of Greece’s debt or just push yet more austerity on to the Greek nation – is any closer to resolution.

Last spring’s big story, the Bank’s mess over resettlement, was still bubbling on the side-lines, including via behind the scenes follow up conversations between CSOs and Bank management, but the CSOs gave the Bank a sharp warning that it get to the bottom of the problem rather than using this as another PR exercise. On the more official side the Bank’s accountability mechanism, the Inspection Panel, made its mark with the launch of the first report in a new series on “emerging lessons”, precisely on involuntary resettlement. Let’s hope the Bank pays attention, not least because the Bank in collaboration with other MDBs continues their big push for big infrastructure, which will no doubt lead to involuntary resettlement in many cases.

Linked to this is another major theme of this year, the cooperation of the MDBs. This year it was not only the Bank and the Fund holding court in Washington DC – all the major MDBs were there, including the ‘new kids on the block’, the Asian Infrastructure Investment Bank (AIIB) and the BRICS’ (Brazil, Russia, India, China and South Africa) New Development Bank (NDB). The NDB met on the sidelines to sign off its first four projects and the AIIB signed a MoU with the Bank to cooperate on projects. And finally, all the leaders lined up in matching grey suits for the inaugural Global Infrastructure Forum, and were joined by the chairs of the G24, G20 and the UN’s general secretary (more grey suits). It all seemed very cordial, but let’s see whether the friendships remain as in particular the AIIB is expected to sharpen its teeth in the next few years.

Despite the Bank telling CSOs repeatedly that they don’t “push” public-private partnerships, this was very much the word of the day at the Global Infrastructure Forum and elsewhere, but environmental, social and financial cautions have started to slip in even at this high level – will these contracts lock poor countries into social, economic and environmental disasters, where the governments have to pay premium to “minimise the risk” for the private sector? Meanwhile, on the other side of the city a US congresswoman challenged the Bank’s use of PPPs, in particular in the water sector.

But another major story went almost unnoticed, as new NGO research put perhaps the hardest pressure on the International Finance Corporation (IFC, the Bank’s private sector lending arm) to date to sort out the mess around their funding for financial intermediaries (FIs). CSOs have repeatedly challenged the lack of transparency and significant social and environmental risks surrounding FIs, concerns seconded by a damning 2012 audit by the IFC’s accountability mechanism, the Compliance Advisor Ombudsman (CAO). In a side event presenting some of the findings, the IFC, CAO and other attendees gasped audibly as some of the shocking findings were revealed. With a new executive vice president and CEO on board, Philippe Le Houérou, will the IFC finally wake up? Or must these cases become the new ‘Panama papers’ before they react?

For the past few years, the annual and spring meetings have been dominated by discussion about the World Bank’s environmental and social safeguards review, and while the public consultation period is now officially over, CSOs remain concerned and there are a fair few issues to resolve at Bank board level, too. CSOs made their voices heard in a Friday protest outside the Bank, and on the inside there were concerns raised about the exclusion of the Bank’s development policy loans from the safeguards – despite the fact that their use is on the rise again in an uncertain economic climate.

Climate change also featured on the sidelines. Despite the new Bank climate change action plan being launched only the week before the meetings, little was made of it on the official or CSO agenda, perhaps because the Bank seem certain that it will play a key role in implementing the UNFCCC Paris Agreement. But CSOs were wondering what will happen with climate finance – will the bulk of the money go through the UN’s Green Climate Fund (as the G20 seemed to indicate) or the MDB-led Climate Investment Funds (CIFs – which the G24 seemed to indicate)? And what happened with the CIFs’ so called ‘sunset clause’, which is supposed to kick in just about now – well, no one seems to know. Meanwhile, yet another report outlining the Bank’s continued investment in fossil fuels was released.

The IMF’s recent expansion into uncharted territory, through publication of research and inclusion of issues such as income inequality, gender, and climate finance in its surveillance pilots gained a growing amount of interest at the spring meetings.  A high-level seminar including David Lipton, first deputy managing director of the IMF, titled ‘Getting down to business: Women, work and the economy’, made the macro-critical case for gender equality and came to the consensus that we have to “move faster and push the envelope” on gender equality, including at the IMF. Whether that means the surveillance pilots will graduate to lending facilities and technical assistance and approach gender equality in a more coherent way remains to be seen. CSOs are certainly interested in the answer, as was evident from questions asked of the IMF during the civil society forum event IFIs and gender equality; missing the bigger picture?

The World Bank on the other hand arranged yet another opportunity for Caren Grown, senior director of the Bank’s gender department, to present the outlines of its gender strategy 2016-2023, launched in December. We heard the now familiar mantra on how the private sector is a key partner for implementation and why gender mainstreaming does not work. When pushed on how implementation plans are going to be systematic, accountable and transparent, Grown explained that her department is not the Bank’s ‘gender police’ and that management is accountable for its implementation, raising questions about the degree to which the gender department and its strategy will be able to influence the behaviour of an institution focused on being a competitive lender.

In perhaps the most ironic moment of the week, Bank executive directors were discussing the problem of a shrinking civil society space at the regular CSO roundtable while Bank staff had shut the door early, thus leaving a fair bunch of CSOs that wanted to attend essentially voiceless in the “overflow” room. Inside the room was a woman displaced by a Bank-linked project in Badia East, Nigeria, but the EDs were repeatedly told they could talk to her after, rather than give her a voice in the forum – though she still managed to sneak a few words in.

Following an October CSO letter to IMF managing director Lagarde and Bank president Kim protesting changes imposed on civil society’s policy forum at the spring and annual meetings in 2015, a long-promised discussion was held to consult participants on how to satisfy CSOs’ demands for greater visibility, widened participation and protection of their autonomy.  A packed room – in the Forum’s largest space – saw numerous CSOs express concerns and propose changes to the Forum for well over an hour, requiring the meeting to continue in the canteen below subsequently. A working group was proposed for anyone who wishes to continue the discussion. The Bretton Woods Project will participate in this process and continue to communicate developments. The working group will discuss changes to the logistics of the space, the Forum location, outreach and proposals for enhanced visibility. Already in the run up to the spring meetings the beneficial effect of CSOs’ demands had led to some changes, but the process appears to just be beginning.