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
- International Monetary and Financial Committee (IMFC) – IMF only
- Development Committee – World Bank and IMF
- Highlights of official meetings and communiqués
- Highlights of civil society meetings, and other meetings and seminars
- Conclusions and wrap-up
As the World Bank and IMF prepare to meet in Washington, we set out the key issues for the week.
This year’s spring meetings will take place in a context of global uncertainty generated by the election of president Trump in the US, the formalisation of Brexit in Europe, and the rise of anti-trade movements across the developed world which once championed it. Making the case for trade as essential to global economic health is likely to be front and centre at the meetings. Meanwhile, civil society will continue to bring to light the persistent disparity between the World Bank and Fund’s rhetoric and the realities of their policies on the ground. Issues such as the negative impact of the IMF’s fiscal policies on women and girls and the Bank’s continued push for privatisation, including the leveraging of private sector investments, will feature prominently at the meetings.
This year’s spring meetings take place in the shadow of dramatic geopolitical events, including the election of president Trump in the US and the formalisation of the UK’s exit from the European Union, coupled with the rise of anti-globalisation forces in France and other European countries and a continued decline in world trade. With recent events in mind World Bank and IMF officials and finance ministers are likely pining for the halcyon days of the ‘new normal’. Putting a positive gloss on trade will likely be a key focus of official discussions.
The Bank’s January Global Economic Prospects noted that economic growth has been lower than its predictions every year since 2011 and cautioned that “downside risks still dominate global economic prospects and are associated with heightened policy uncertainty, protectionist pressures, and risk of financial market disruptions.” The IMF’s January update of its World Economic Outlook similarly highlights the downside risks to the world economy arising from uncertainty in the US and notes that, while there may be some positive trends in the developed economies, emerging market economies will continue to face “marginally worsened” growth prospects.
The reality of the situation is only indirectly alluded to by the IMF, though no doubt it will be a big part of official discussions. A clue to the degree of concern is evident by examining the usual release of two chapters from the Fund’s Global financial stability report to be released in full at the spring meetings. Titled Low growth, low interest rates, and financial intermediation and Are countries losing control of domestic financial conditions?, the Fund is rather loudly signalling its concerns. However, given the lack of leadership and coherence in other key forums, e.g. G20, on key economic growth questions such as trade and financial stability-related reforms, the very bluntness of the titles perhaps indicates the pessimism with which the IMF confronts the gathering of finance ministers intended to set the Fund’s direction.
In light of the very challenging context and considering that IMF and Bank projections have consistently overestimated growth prospects, those concerned with a potential debt crisis in emerging markets will get little comfort from the “hopeful forecasts” of anaemic growth in 2017 and will no doubt continue to press for the Fund to align its policies with its rhetoric on the subject and advocate for debt cancellation as a viable option.
In contrast to the doom and gloom about the world economy, the Fund’s much lauded commitment to consider equity, social protection and gender equality will no doubt be prominently discussed at the meetings. The Fund will do its level best to avoid evidence of the chasm between its rhetoric and practice as highlighted by amongst other things the report of the UN independent expert on debt to the UN Human Rights Council on the impact of labour deregulation policies required by international financial institutions. The inconvenient findings of the UN report are supported by the Bretton Woods Project’s latest briefing, which details the gender implications of the disparity between the Fund’s discourse and fiscal policies, especially Value Added Taxation, advocated by the IMF. CSO seminars and events focusing on these policies and their social dimensions will be a prominent part of the interaction between civil society and especially Fund officials.
The challenging geopolitical environment could hardly have come at a worse time for the Bank, which seeks decisions on capital increase from its shareholders at this year’s October annual meetings. The uncertainty faced by the world economy is mirrored by the Bank, with the White House proposing to slash support to development banks such as the World Bank by as much as $650 million over the next three years. Updates on the Bank’s Forward Look and Shareholding Review will form part of the Development Committee agenda for the spring meetings, as well as a call for a “stronger World Bank Group” with increased funding for IBRD and IFC, but shareholders will no doubt be hesitant to take any decisions in the absence of solid US commitment of continued support to both the proposed capital increase and ‘increased voice’ within the Bank.
Similarly, hope for progress on IMF governance discussions is also mired in uncertainty over how the US administration views the IMF’s usefulness, with particular concern over how the prospect of providing yet more money to the eurozone to prop up Greece would be viewed.
The current highly challenging environment is unlikely to bring much joy to Bank president Jim Yong Kim’s many detractors, who criticised his managerial skills very publically during his nomination for a second term ahead of last annual meetings. His approach to any further ‘belt-tightening’ at the Bank will be closely scrutinised by his many critics within and outside the Bank.
With negotiations on the replenishment of IDA18 completed, CSOs and other interested parties will be watching the development of the its new Private Sector Window with interest, as significant concerns have been raised about the IFC’s capacity to work effectively in middle-income countries, such as Indonesia, let alone in IDA and Fragile and Conflict-affected States (FCS). In light of the deteriorating bi-lateral funding environment and the increasing pressure on donor states to justify their overseas development assistance, IDA’s use of the capital markets for a third of its resources for IDA18 is seen as a significant and worrying trend.
Civil society concerns about the World Bank’s push for the leveraging of private sector resources through a variety of means, including public-private partnerships (PPPs) will continue to feature prominently in discussions between World Bank management, executive directors and civil society. Earlier in the year 115 CSOs decided to boycott PPP consultations until the Bank meets specific demands, including calling on states to record PPP funds ‘on’ rather than ‘off’ the balance sheets, as is commonly practised, and for the Bank to refuse to fund PPPs that do not do so.
The social, environmental and human rights costs of the Bank’s continued reliance on the private sector as a pivotal development actor are also likely to feature prominently at the spring meetings, including whether its dismal record in the education sector will have an impact on the next World Development Report, which will focus on education. While concerns about IFC’s investments in financial intermediaries have been a mainstay of the spring and annual meetings for years, the release of new damning civil society reports documenting IFC’s continued exposure to coal projects in contravention of World Bank’s climate commitments, coupled with the latest in a series of critical reports by the IFC’s accountability mechanisms, the Compliance Advisor Ombudsman, will challenge the IFC’s assertions that things have changed significantly under the leadership of Philippe Le Houérou, who has to date refused requests to meet CSOs to discuss pressing concerns.
With the August 2016 approval of the Bank’s new social and environmental framework, replacing the safeguards, attention will now turn to the implementation of the new framework, which is widely considered to have diluted the already flawed protections provided by its predecessor. In light of the Bank’s repeated claims during the safeguards consultation process that many of the questions and concerns posed by civil society would be addressed by guidance notes, civil society is now pushing for these to be made public and subject to technical input from civil society. In keeping with additional fears raised by a new CSO report detailing the negative impact of the Bank’s development policy finance (DPF) on its climate commitments, CSOs are also putting increased pressure for DPF to also be subject to social and environmental safeguards.
International Monetary and Financial Committee (IMFC)
The agenda for the spring 2017 International Monetary and Financial Committee meeting is available here.
- Forward Look – A Vision for the World Bank Group in 2030 – Progress and Challenges
- Shareholding Review: Progress Report to Governors at the 2017 Spring Meetings
- A Stronger World Bank Group for All
We bring you the highlights from the communiqués at the annual meetings – including the G24, IMFC and Development Committee.
20 April: G24 communiqué
With its 2017 Spring Meetings communiqué, the G24 strengthened its call for greater influence in international financial institutions and increased policy space and autonomy. The communiqué included the G24’s views on the IMF’s latest macrostructural work on inequality and focused heavily on domestic resource mobilisation and other tax issues.
G20 finance ministers communiqué
No communiqué was released at the 2017 spring meetings.
No document was released
22 April : IMFC communiqué
The IMF’s flagship economic analysis, the World Economic Outlook, has for the first time in years been able to upgrade its past forecasts at this year’s spring meetings. The IMFC communiqué thus reiterates a cautiously positive view on growth. This is accompanied by the now familiar but ever-stronger demands that the IMF must consider ‘distributional’ (meaning social) concerns, and support the SDGs, suggesting these remain hollow words but useful ones. Given the anti-trade mood in major economics, there is an unsurprising reiteration of multilateralism and the benefits of trade, but once again couched in concerns over the winners and losers of globalisation’s signature feature. It suggests an emerging strategy that can both placate the economic nationalism emerging in the United States and other major IMF stakeholders and also safeguard managing director Lagarde’s ‘macro-structural’ agenda. The agenda which strengthens the IMF’s legitimacy and improves its image by considering policy issues such as income inequality, gender equality and more broadly the SDGs to take account of the losers, not just winners, of its recommended policies.
22 April: Development Committee communiqué
While starting on a cautiously optimistic note, the most illuminating thing about the unusually short Development Committee communiqué is the visible balancing act between previous commitments and the US administration’s ‘red lines’. Most notably, any direct reference to climate change is absent, but more commonly agreed positions on the preference for the private over the public sector remains strong, as well as support for addressing the challenges of fragility, conflict and violence.
An overview of events taking place in the World Bank and IMF Civil Society Policy Forum (CSPF).
Below we will post notes, minutes and recordings of sessions attended by the Bretton Woods Project, so check back often as the week progresses. The notes are aimed at providing a general idea of conversation and discussion at the annual meetings and are not necessarily complete or a fully accurate representation of participants’ remarks.
- Why impact investment can be an effective tool for social development
- Inspection Panel – emerging lessons on environmental assessment
- Learning to realize education’s promise: World Development Report 2018
- Engaging citizens for better development results
- The role of the IMF in domestic and international taxation
- Making tax work for women’s rights
- The IMF and World Bank policies and the Arab’s world’s transition economies
- Getting energy access right – Trends and lessons learned in public finance
- Are governments and the Bretton Woods Institutions fighting inequality?
- Strengthening civil society engagement in national planning processes: Lessons learned from the Global Financing Facility – notes to be added shortly
- The new World Bank environmental and social framework: Implementation update
- On track to 1.5C: Mainstreaming climate and forest actions in MDB lending and country strategies
As finance ministers and World Bank and IMF officials met in Washington for the 2017 spring meetings, two themes dominated discussions: concerns about the extent and nature of the global backlash against ‘free trade’ and multilateralism, and the need to induce the private sector to contribute to the achievement of the Sustainable Development Goals in times of increasing fiscal constraint and donor fatigue. The shadow of the new administration in Washington and European elections hung heavily over the meetings. This was despite the best efforts of Bank and Fund officials and invited private sector representatives to paint a more hopeful picture of the global environment.
The IMF’s World Economic Outlook report, released in April, was optimistic about an improvement in global growth in 2017 and 2018 driven principally by stronger growth and confidence in the US and an upturn in performance in China. The report warned, however, that “the balance of risks remains tilted to the downside, especially over the medium term. With persistent structural problems—such as low productivity growth and high income inequality—pressures for inward-looking policies are increasing in advanced economies.” Despite the IMF’s hopeful forecasts, concerns about the downside risks of protectionism and a backlash against multilateralism were never far from the week’s discussions. Bank officials did their best to counter-balance the fears of the anti-trade and anti-multilateralism hordes by focusing on the promise of private-sector led, and presumably inclusive, growth. Of course, as we reported at last year’s annual meetings, the focus on the leveraging of private-sector investment in support of the Sustainable Development Goals was nothing new. What was new, was the conspicuous lack of references to climate change in particular in the Development Committee’s communique, following on from the G20’s concessions to the new US administration’s reluctance to concede to the scientific facts.
The concerns with the anti-trade and multilateralism movement were in evidence prior to the spring meetings with the release of a joint IMF, World Bank and World Trade Organisation document ahead of the G20 March meeting in Frankfurt titled Making trade the engine of growth for all. The paper argued that trade remains essential to growth but recognised that “adjustment to trade can bring a human and economic downside that is frequently concentrated, sometimes harsh, and has too often become prolonged”. The need to ensure ‘inclusive growth’, the continued relevance of the multilateral system, and the Fund and Bank in particular, were therefore placed front-and-centre in meetings and public statements. The Development Committee, the IMF’s Managing Director and research department all emphasised that future growth must be inclusive and that inequality is a constraint to growth that must be tackled.
However, in the hallways very senior IMF officials seemed less convinced – reminding ‘naïve‘ civil society listeners of the difference between IMF research and policies and noting that, as argued long-ago, inequality may be necessary for growth and that, despite what the research department may say, strong labour unions and collective bargaining may not be so fantastic after all. Civil society, in contradiction to public statements, were told that the threat of populism is a developed world problem, as elsewhere trade and globalisation have not produced any losers, creating only ‘little’ and ‘big’ winners. The ‘frank’ statements made outside public events seemed depressingly in line with criticisms by UN experts and others who follow IMF policies in the Middle East and North Africa region and elsewhere, which stress that these often lag behind and contradict the institution’s own research and rhetoric.
In addition to the need for ‘trade with a human face’, leveraging of private sector investment for development outcomes was the other mantra of the week and reflected the main focus of the Bank’s Forward Look, which highlighted the use of the ‘cascade approach’ to sustainable infrastructure financing. The approach provides a useful perspective from which to consider the World Bank’s views on the role of the public sector in infrastructure financing, placing it fourth in a hierarchy of preferences, preceded by 1) commercial investment; 2) addressing upstream reforms and market failures and 3) public and concessional resources for risk instruments and credit enhancements.
The crescendo of the private sector leverage siren song was observed at the multilateral development banks (MDBs) second Global Infrastructure Forum, in which 10 MDBs re-committed to pursuing the G20 agenda of attracting private sector investment for what is seen as the panacea to global economic ills; large-scale ‘sustainable’ infrastructure. However, there was little evidence of how this ‘sustainable’ approach will address the crucial issues generally associated with sustainability, such as environmental, climate and human rights challenges. Despite the World Bank’s insistence that it does not unduly promote public-private partnerships (PPPs), references to them were widespread during the opening plenary and subsequent breakout discussions. A PPP reference guide produced by the PPP Knowledge Lab was also prominently featured. ‘De-risking’ private sector investment, including ‘de-risking’ entire countries, was the concept of the day. In the euphoria of a brave new world in which the interests of the private and public sectors magically align and the recent experiences with the Odebrecht scandal in Latin America, among others, are a forgotten memory, it was left to civil society to ask: how much must the public sector and public development banks pay to ‘de-risk’ private investments to attract the trillions of private sector resources that remain stubbornly unwilling to flow to emerging markets?
Following the boycott of 115 civil society organisations of the Bank’s consultations on the proposed contractual clauses of PPPs, the experiences of Latin American colleagues with PPP contracts and projects in Peru and Colombia seemed to provide an answer to the first question above. It appears that the private sector can indeed be induced to reconsider its risk-return equation. All it takes is the de-risking of private sector exposure through the erosion of government public policy and regulatory space and the watering down of labour, land and environmental rights of the populations that will theoretically benefit from the private sector investment bonanza. Civil society noted, with concrete examples, that the Bank has been ‘assisting’ states to do precisely this through its development policy lending programmes.
The Bank was very happy to highlight the success of the IDA18 replenishment, presenting IDA’s turn to the capital markets as a liberating and game-changing innovation and noting that several new countries have become contributors to IDA. IDA’s focus on fragile and conflict-affected states and the use of the newly established private sector window were widely supported. However, civil society posed questions about the Bank’s ability to work effectively in more complex fragile environments and raised concerns about the suitability of the IFC’s approach, noting persistent evidence of the detrimental impact of IFC’s investments in financial intermediaries (FIs). While civil society was generally pleased with IDA’s increased focus on capacity development of governments to improve domestic resource mobilisation, questions were raised about who would be left to shoulder the burden, as current international tax arrangements and the use of tax havens by multi-national corporations (MNCs) leave little room for developing states to mobilise the billions of dollars foregone yearly in developmental resources. As civil society noted, the use of value-added taxes, a favourite palliative solution, is highly regressive and contrary to aims to protect the vulnerable, including women and girls.
In light of additional problematic cases of IFC investments in FIs uncovered by civil society and the damning March audit report of the IFC’s Compliance Advisor Ombudsman (CAO), civil society was disappointed that its request to meet with IFC CEO Philippe Le Houérou to discuss his blog outlining IFC’s new strategic direction was refused. Civil society had hoped the meeting would have allowed CSOs to better understand how the IFC intends to take forward the proposed changes outlined in the blog and to get some clarity on what means it will use to monitor progress against its new vision.
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