+ + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + BRETTON WOODS UPDATE A bi-monthly digest of information and action on the World Bank & IMF Number 75, March/April 2011 Published by BRETTON WOODS PROJECT Working with NGOs and researchers to monitor the World Bank and IMF + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + 1. Energy for the poor: Bank urged to make a clean break 2. World Bank increases extractives lending despite human rights abuses 3. World Bank ignoring forest communities? 4. Comment: Cambodians denounce World Bank-funded land grab 5. Guest Analysis: Cambodia and the limits of World Bank accountability 6 Bank seeks expanded role in climate finance despite civil society protests 7. Inside the institutions: The World Bank’s approach to gender mainstreaming 8. Bank’s privatisation approach to social services fails to deliver 9. Call for debt audit as IMF austerity fails 10. The long road to nowhere? Disputes on the global financial architecture 11. Gold sales: funding debt relief or IMF bureaucracy? 12. Bank safeguards and independent scrutiny at risk? 13. Industrial policy: World Bank turning the corner? 14. World Bank research impact questioned 15. UK review backs World Bank but notes flaws 16. World Bank launches new Africa strategy 17. New report on Bank’s role in Rogun dam 18. Bank seeks business in Middle East unrest 19. IMF fails to include social impact in review 20. Uganda: aid witheld after IMF PSI decision 21. Singaporean becomes first Asian to lead IMFC 22. Nigerian economists bash IMF advice =================================================================== 1. Energy for the poor: Bank urged to make a clean break --------------------------------------------------------------------- Policymakers, analysts and campaigners have said the Bank must revise its proposed energy strategy to set a clear course for reducing energy poverty and supporting low-carbon development. The credibility of the strategy is also at risk from new coal investments under consideration at the Bank. A draft of the strategy was due to go to a Bank board sub-committee in mid April, with another round of online and technical consultations before full board consideration in July. The strategy will guide the Bank’s energy lending over the next decade and is expected to influence the policy of other lending institutions (see Update 74, 67). A leaked copy of the current draft contains some measures that have been welcomed, such as a household energy programme and an end to coal lending in middle-income countries, meeting demands from southern civil society groups and their northern counterparts (see Update 71). However, the draft has been criticised for failing to focus the Bank’s limited resources on its stated goals of increasing access to energy, especially for the poor, and enabling clean development. Rather than prioritising actions that would promote both, the draft rules little out and incentivises large projects for the sake of organisational efficiency, admitting that this is "somewhat at odds with the goal of scaling up activities in areas where many potential projects - such as solar, wind, micro-hydropower ... and energy efficiency - tend to be small". This runs counter to International Energy Agency findings in 2010 that decentralised, renewable energy offers the most effective route to universal energy access. There are concerns about major loopholes for future coal finance, with only loose guidelines directing funding in low-income countries. No new restrictions will be placed on oil and gas lending. No real limit or downward trajectory will be set for the Bank’s fossil fuel finance. Instead, the Bank is to commit 75 per cent of spending to "clean energy" projects by 2015. Observers have repeatedly raised concerns about the Bank’s definition of "clean" (see Update 71), such as the inclusion of large hydropower and, potentially, coal plant rehabilitation. Bank finance for hydro is set to increase, without applying international standards on environmental and social impacts (see Update 72). The Bank is also resisting calls to disclose its overall carbon footprint. The current draft is equally vague on how the Bank will improve access to clean, affordable and reliable energy for the poor in line with its poverty reduction mandate. Targets for reducing energy poverty are not set - only for increasing access to electricity in general. Alison Doig of UK NGO Christian Aid commented that the Bank risks no "departure from business as usual, but instead a slight tweaking of what has come before. Despite a lot of nice language on low-carbon initiatives and energy access, the strategy for delivering on both remains very unclear." Srinivas Krishnaswamy of Indian NGO the Vasudha Foundation argues that, "The draft strategy should have a clearer focus on energy access with the intent of alleviating energy poverty by providing clean, affordable and reliable energy services to the poor. Energy access should go beyond mere supply of electricity to rural households, and should meet various needs, such as communication and water supply, as well as ensuring livelihood enhancements." The draft will not satisfy a European Parliament February resolution that called for the Bank to "prioritise small-scale, local-level energy access" and ensure communities "have access to and benefit from energy-sector developments including low-carbon technologies and renewable energy sources". New coal funding? ----------------- Contradictions between the Bank’s clean energy rhetoric and its practice deepened, with civil society groups raising concerns about potential Bank finance for new coal power, including in Kosovo. In 2006-7 the Bank granted $10.5 million for technical assistance to develop plans for a $20-60 million project that will include two new power plants, and the rehabilitation and expansion of a third. Agron Demi of Kosovan NGO Instituti GAP said, "Bank officials and the Kosovo government are saying that Kosovo’s only resource is lignite [low-grade coal]. But no assessment of alternative sources, such as wind, or energy efficiency has been conducted. We oppose plans for a big lignite power plant to produce energy for export, because people living nearby will suffer from pollution and health issues." Meanwhile, a March report by US NGO Center for International Environmental Law argues that the Bank’s $3 billion loan to the Medupi coal plant in South Africa last year (see Update 70) failed to take into account the economic costs of its environmental and health impacts, contravening Bank policies. Leaked World Bank energy strategy draft × tinyurl.com/leakeddraft =================================================================== 2. World Bank increases extractives lending despite human rights abuses --------------------------------------------------------------------- Civil society groups have accused the Bank of failing to foresee or respond to human rights abuses in the Bank-sponsored Baku-Tbilisi- Ceyhan (BTC) oil pipeline in the Caucasus and Turkey, just as the Bank announces a boost in investments in extractive industries. The International Finance Corporation (IFC), the Bank’s private- sector arm, loaned $250 million for the BTC pipeline in 2003. In March, the UK National Contact Point - a government office that promotes compliance with OECD guidelines for multinational enterprises - ruled that the BTC consortium, led by oil multinational BP, had failed to investigate and respond to complaints of intimidation by state security forces guarding the pipeline in Turkey. This violates OECD guidelines, and thus, according to civil society groups, the consortium’s contract with financiers including the IFC. The complaint, submitted by a group of local and European NGOs including the Corner House and Kurdish Human Rights Project, argued that the intimidation deterred local people, particularly Kurdish minorities, from participating in consultations about the pipeline and compensation negotiations for loss of land and livelihoods. A March letter from eight NGOs, including Urgewald and CEE Bankwatch, said the UK ruling demonstrated the need for a public review of the IFC’s due diligence and monitoring of the project. They also urged the IFC to "introduce procedures that require a contextual assessment of human rights and compliance with host country and international human rights standards for all projects it supports", and to establish a robust grievance mechanism. Rachel Bernu of NGO Kurdish Human Rights Project said: "We hope that this decision will encourage the IFC to develop a regime that realistically integrates human rights protections in regions where respect for human rights is not the norm. In so doing, the poor people of the world, like those in Turkey, may actually begin to benefit from large scale investment rather than be subject to intimidation, loss of land and livelihood and in some cases ill- treatment and torture." Extractives expansion trumpeted ------------------------------- The BTC ruling came as the Bank abandoned its reports on the implementation of its response to its 2004 Extractive Industries Review (EIR, see Update 49) in favour of an annual overview of its activities in the sector. The January report showed an increase of lending to over $1 billion in financial year 2010, with the IFC accounting for three-quarters of the total finance. It claimed that "all IFC projects" in Latin America have shown positive results, despite the suspension of operations on human rights grounds last year at the Marlin mine in Guatemala, whose Canadian operator Goldcorp received a $45 million loan from the IFC in 2004 (see Update 72). At a March conference in South Africa, the IFC announced plans to invest $300 million in African mining companies, including "large projects with the potential to transform regional economies". Dr. Aaron Tesfaye, of William Paterson University in the US, responded that "In the division of labour in the international economy, Africa has been relegated to a plantation economy ... I think the World Bank’s investment is a precursor of larger investments on projects, as big and emerging powers engage in the new scramble for Africa." Voicing concern over rights violations and environmental sustainability in future IFC investment in mining on the continent, Jamie Kneen, of NGO MiningWatch Canada, said: "This is bad news for Africans, at least those who aren’t members of the business and political elite." Andy Whitmore, managing editor of the Mining and Communities website, noted that: "It is over a decade since the Bank announced the independent review of its investments in extractive industries, yet it has still failed to deliver on the letter and the spirit of the conclusions of that report" (see Update 72, 46). A Bank technical assistance programme to Papua New Guinea, approved in 2008, demonstrates this point. The project has contracted an external consultant to develop a set of conditions under which the government can allow the marine dumping of mine waste, despite the fact that the EIR warned that this practice posed significant risk to marine biodiversity, sustainable livelihoods and human health. In a recent article for website sciencealert.com, a group of academics concluded that "however lofty the stated goals of the World Bank, their effect will be to simply facilitate a practice that - like many early forms of industrial pollution - should be consigned to the dustbin of history." BP violating human rights × tinyurl.com/bphumanrights =================================================================== 3. World Bank ignoring forest communities? --------------------------------------------------------------------- The World Bank has come under fire for its Inspection Panel’s decision not to investigate its forestry sector programme in Liberia, while new reports from civil society groups add to the backlog of criticism over the Bank’s Forest Carbon Partnership Facility (FCPF). In February, the Bank board approved an Inspection Panel recommendation not to investigate evidence that the Bank’s technical assistance programme for the Liberian forestry sector is causing harm to forest-dependent communities. The Inspection Panel instead supported the Bank management’s action plan to deal with the issues raised in the request. The request was submitted by Liberian NGO Sustainable Development Institute (SDI) and international NGO Global Witness on behalf of forest communities. It showed how projected benefits from logging operations for those communities had not materialised, and that the Bank’s forestry management system favours destructive logging over community forests and conservation. "Rather than playing a positive role in the future of Liberia’s forests, the World Bank is now central to their destruction," said Jonathan Gant at Global Witness. Jonathan Yiah of SDI added that "At the moment, the Liberian people can’t be sure the Bank will take the steps necessary to fix the problems it has helped create." New criticism of the Bank’s FCPF, which funds developing countries’ national plans for Reducing Emissions from Deforestation and Degradation (REDD), has emerged (see Update 72, 68, 65, 60). A recent report by European NGOs FERN and the Forest Peoples Programme (FPP) states that "what we see emerging is a game of ‘smoke and mirrors’, with the World Bank and recipient governments seemingly colluding with each other to mask the defects in FCPF operations." The report concludes that "with key causes of forest loss not being addressed, failing consultation processes, a focus on measuring carbon at the cost of improving governance and a ‘race to the bottom’ in terms of safeguards it is difficult to see how the national plans emerging from the FCPF ... will contribute to reducing forest loss and respect for human rights." Two other reports critically assessing FCPF REDD planning initiatives in Cameroon were released in February. The first, published by FPP, argues that the FCPF planning activities "lack effective actions to ensure the participation of indigenous peoples and local communities, miss solid data on the drivers of deforestation and gloss over critical land tenure, carbon rights and benefit sharing issues". The second report, published by international research organisation the Centre for International Forestry Research, focuses on inadequacies in national governance and institutional capacity, and argues that the process has been driven by elites and external actors with little focus on affected communities, wider stakeholders in the forestry sector, land rights and meaningful participation. In March, the Peruvian indigenous peoples’ organisation Inter-Ethnic Association for the Development of the Peruvian Amazon (AIDESEP), released a critique of the government’s REDD readiness proposal (RPP) submitted to the FCPF. The report analyses in depth how the RPP fails to meaningfully address land rights, indigenous territory, and land titling needs. It calls for a right for indigenous peoples to develop "Indigenous REDD" initiatives, "redefined in relation to our cosmo- vision and collective rights, as part of a right to decide and control the strategies of so-called ‘development’ in our territories and environments." Smoke and Mirrors, FFP × tinyurl.com/fppfcpf The context of REDD+ in Cameroon × tinyurl.com/ciforredd AIDESEP critique of Peru’s RPP × tinyurl.com/aidesep Liberia Inspection Panel case × tinyurl.com/gwliberia =================================================================== 4. Comment: Cambodians denounce World Bank-funded land grab --------------------------------------------------------------------- Excerpt of a February letter to the World Bank President from the League of Boeung Kak Women Struggling for Housing Rights We are the residents of Boeung Kak in Sras Choc commune, Phnom Penh, Cambodia who submitted a complaint to the World Bank Inspection Panel in September 2009. Our land rights, including our right to register our land, were unfairly denied by the World Bank-financed land- titling project. Instead our land has been leased to a private company and we are being forcibly evicted from our homes. We know that we have the right to be protected from forced eviction under the World Bank policy on involuntary resettlement. However, this policy is not being respected. ... In Cambodia today, land-grabbing by powerful people is increasing all the time. ... We are losing our land, our homes and our livelihoods. Our children are forced to drop out of school. We have no food security and our mental health is deteriorating. We cannot find justice at the courts, which only work for the rich and the powerful. When we try to protest, we are threatened, arrested, beaten and abused. Every year, [Cambodia] receives more than one billion dollars in aid and loans from international banks and donors. But much of this aid is not reaching the poor. ... We believe that the donors are a part of our problem when they fail to monitor their aid to ensure that it does not cause harm. In Boeung Kak, ... [f]or the past four years we have been living under the threat of forced eviction. In the last two years more than 2,000 families in our neighborhood have already been evicted. We have been intimidated by company security forces and local authorities, and we are concerned about our personal security. They threaten that our homes will be burned if we do not move. Our homes have been flooded by the company with sewage water and some have even been buried in sand. Even though we are the rightful owners of our homes and land, we have only been offered a small fraction of the market price. This is not enough for us to buy another house in the city. ... We have proposed a solution to this dispute. We are willing to share our land with the developer if the government will build us new housing onsite. We have asked the municipality of Phnom Penh to reserve 12 per cent of the leased area for this purpose. We have also asked the World Bank to support the government to make this plan possible ... We call for accountability, not just for our Boeung Kak community, but for all the people suffering from land-grabbing and forced evictions throughout Cambodia. Justice for Boeung Kak is justice for all Cambodians! ===================================================================== 5. Guest Analysis: Cambodia and the limits of World Bank accountability --------------------------------------------------------------------- By David Pred and Natalie Bugalski The World Bank Inspection Panel released an investigation report in March, which found that the Bank breached its operational policies by failing to properly design and supervise the Cambodia Land Management and Administration Project (LMAP), contributing to "grave harm" to affected families. The World Bank’s Inspection Panel found that the Bank’s failures contributed to the forced eviction of some 20,000 people living around Phnom Penh’s Boeung Kak Lake. Residents were wrongly denied the right to register their land ownership under the $28.8 million Bank-financed land titling project shortly before the government leased the area to a private developer and began a campaign of intimidation to force more than 4,000 affected families to sell their property for a fraction of its market value. The project was established with the stated aim of developing the land market and improving security of tenure for the poor by systematically registering land and issuing titles across the country. However, the Panel found that many poor and vulnerable households have been arbitrarily excluded from the titling process, denying them an opportunity to claim and formalise their land rights. The Panel attributed this failing to non-compliance with the Bank’s operational policies and procedures on project appraisal and supervision. Despite strong evidence to prove their legal rights to the land, Boeung Kak residents were excluded from the titling system when land registration was carried out in their neighbourhood in 2006. Shortly after, the Cambodian government granted an unlawful 99-year lease over the area to Shukaku Inc., a company chaired by a senator from the ruling Cambodian People’s Party and a close associate of the prime minister. Residents of the area covered by the lease - many of whom have lived lawfully in the area since soon after the fall of the Khmer Rouge regime in 1979 - were suddenly accused by the government of being illegal squatters on state-owned land. The Inspection Panel also found that the Bank breached its operational policies by failing to supervise the government’s implementation of a resettlement policy framework, which was included in the LMAP loan agreement. The framework established a process of adequate resettlement and compensation, in accordance with the Bank’s policy on involuntary resettlement, for people found to be residing on state land. The framework was not applied by the government in the case of Boeung Kak or in other areas where households have been excluded from titling and subsequently forcibly evicted. Following advocacy by civil society groups, the Bank acknowledged that the involuntary resettlement safeguards had been breached in Boeung Kak, and approached the Cambodian government to discuss measures to bring the project into compliance. The government disagreed that the safeguards had been violated and responded to the Bank’s entreaties by abruptly ending its agreement on LMAP, citing the Bank’s "complicated conditions". Since that time, the Cambodian government has rebuffed all attempts by the Bank to remedy the situation and forced evictions of Boeung Kak families have continued unabated. The predicament in which the Bank finds itself highlights the limits of its ability to be accountable to those harmed by its projects - even if it wants to be. The institutional architecture of the Bank requires it to rely on the cooperation of borrowing governments in any effort to remedy harms resulting from safeguard policy violations. This structure becomes highly problematic when the government in question is notoriously unaccountable to its own people and is the perpetrator of the violations at hand. More than 15 years since the establishment of the Inspection Panel, there continues to be no guarantee that claimants whose rights are vindicated by the Panel will receive any remedy whatsoever. If the Bank continues to lend to governments that consistently violate safeguard policy obligations and refuse to remedy harm, then it must be prepared to provide reparations unilaterally. In the absence of such a redress mechanism, the Bank will continue to suffer from an accountability deficit and demands for stripping the Bank’s legal immunity will grow ever louder. Inspection Panel investigation on Cambodia, LMAP × tinyurl.com/ipcambodia ===================================================================== 6. Bank seeks expanded role in climate finance despite civil society protests --------------------------------------------------------------------- As civil society organisations line up to demand a minimal role for the World Bank in the new Green Climate Fund (GCF), the Bank is pushing its Climate Investment Funds (CIFs) as a model for the GCF, despite criticism and protest at CIF projects flaring up in recipient countries. There is intensive speculation that the Bank, which already holds the interim trusteeship of the GCF, is also angling to serve as the fund’s secretariat (see Update 74). Some of the first confirmed members of the transitional committee responsible for designing the GCF are World Bank climate staff. As Liane Schalatek of the Heinrich Boell Foundation notes on the Climate Equity blog, this World Bank team "was previously involved in setting up and managing the Bank’s own Climate Investment Funds and are certainly ready to suggest that the CIFs would be a good ‘best practice’ model for funding windows under the GCF." In April, a group of over 50 NGOs and global civil society networks, including Institute for Policy Studies and Jubilee South, wrote a letter to the United Nations Framework Convention on Climate Change (UNFCCC) secretariat and members of the transitional committee warning against an expanded and influential role for the Bank in the GCF. The letter states that although the Cancún agreements allow for multilateral development banks to second staff to the transitional committee, "the World Bank was not given a mandate to lead any process in the design of technical aspects of the Fund." If this is the case then "the work of the transitional committee may be prejudged and the legitimacy of the committee may be undermined." The letter also argues that "The Green Climate Fund was created because existing climate funds, such as the World Bank’s [CIFs], have been unable to meet the needs of communities in developing countries to address the climate crisis." It cites the long track record of the Bank in increasing indebtedness in low-income countries, funding fossil fuels and supporting projects with devastating social and environmental impacts". Because of this the Bank "is not suited to advise in the design of a Fund that must ensure fair and effective long-term financing based on the principles of environmental integrity, equity, sustainable development, and democracy." A briefing paper due to be published in early April and endorsed by at least 30 civil society organisations, including ActionAid and Bolivian Climate Change Platform, contains a set of recommendations to the transitional committee of the GCF, including limiting the role of the Bank as trustee and ensuring financial transparency. With one eye on the Bank’s recent controversial energy lending (see Update 74, 73, 70), the paper also recommends that the GCF "should adopt responsible investment practices to ensure that its assets are not invested in environmentally harmful or risky sectors, companies and activities - particularly those that exacerbate climate change, such as fossil fuel investments." On the CIFs, the paper recommends that in order to "streamline the multitude of funding mechanisms that currently exist and ensure that the GCF receives the majority of climate finance," it is vital that the CIFs activate their sunset clause once the GCF is operational. The clause requires the CIFs to close operations once a new financial architecture for climate change is effective under the UNFCCC. CIF programmes cause uproar --------------------------- The Pilot Programme for Climate Resilience (PPCR), one of the CIFs, has programmes in Bangladesh, Tajikistan and Nepal (see Update 73) that are approaching implementation this year, and are already provoking protests in recipient countries. In Bangladesh, 11 civil society organisations formed a human chain in Dhaka protesting against the fact that financing for the PPCR programme is heavily loan-based. The project consists of $50 million in grants and $60 million in loans from the PPCR, which are tied up with loans of $300 million from the International Development Association (IDA), the Bank arm for low-income countries, and $215 million in loans from the Asian Development Bank. Prodip Kumar Roy of NGO Campaign for Rural Sustainable Livelihoods said that the loans are "imprudent and premature as the multilateral climate financing process of UNFCCC is going to take shape by 2012". He added: "It is the conspiracy of developed countries to avoid the multilateral process of UNFCCC and also to continue exploitation by debt and domination through the World Bank". In Nepal, 11 civil society organisations released a statement demanding that the government only accept the grant component of its PPCR package. Echoing sentiments from Bangladesh, the statement says that "We oppose the World Bank on pledging of loans for adaptation and resilience to the nations that needs immediate financial support to adapt to the adverse effects of climate change... This is intended to devalue and defame the ongoing climate funding process under the UNFCCC mechanism." A January report by international NGO Oxfam details serious flaws in the PPCR process in Tajikistan. It collates the perspectives of local stakeholders, and documents a range of criticism over how the PPCR strategy has been developed. These include concerns amongst local NGOs that consultation was limited to government agencies and a shortlist of civil society organisations, "meaning that the voices and perspectives of affected communities were not considered at the critical design stage". There was limited access to Bank and other MDB staff, to project information and to documents in local languages. The report also states that "It was felt by a range of commentators ... that the PPCR analysis lacked sufficient gender analysis and that the chosen projects have not, so far, been designed to take account of the different needs of women and men in relation to climate change". Oxfam PPCR Tajikistan report × tinyurl.com/oxfamtaj Nepal PPCR Statement × tinyurl.com/ppcrne pal Bangladesh PPCR press release × tinyurl.com/ppcrbangla =================================================================== 7. Inside the institutions: The World Bank’s approach to gender mainstreaming --------------------------------------------------------------------- The World Bank’s current approach to gender mainstreaming promotes women’s empowerment as "smart economics" that serves a dual equality- development purpose. This approach, which largely ignores non- economic sources of gender inequality, has been criticised for its narrow, market-driven focus. Since the 1990s, the Bank has advocated a country-owned, Bank- supported approach to addressing gender inequality. The Bank’s Operational Policy (OP) 4.20, introduced in 1994, and its 2001 Gender Mainstreaming Strategy were implemented with the stated intent of promoting gender as a cross-cutting issue in all sectors (see Update 33). Country Gender Assessments (CGAs) were introduced as a tool for determining priority sectors for gender integration in client countries by OP 4.20, and became the "principal means" for country gender analysis under the 2001 strategy. They were designed to coordinate with the Bank’s existing Country Assistance Strategies (CASs, see Update 70). Between fiscal years 2002 and 2008, gender assessments were undertaken for 46 out of 140 total country strategies. The Bank’s four-year, $63 million Gender Action Plan (GAP), Gender equality as smart economics, was produced in 2007 to "improve women’s economic opportunity [through] access to jobs, land rights, financial services, agricultural inputs and infrastructure" (see Update 54). Bank commitments to gender integration in economic and sector work (ESW) were prioritised under the action plan. ESW is primarily in- country information and statistics gathering about existing infrastructure needs, governance practices and economic and social policy. About half of GAP’s budget went to ESW; this sum amounts to less than 7 per cent of total Bank-wide spending on ESW between 2003 to 2006, the most recent four year period for which statistics are available for comparison. The GAP relied upon quantitative performance indicators to measure progress in gender mainstreaming. In 2010, a 2011 to 2013 post-GAP transition plan was given a $68 million budget. Included in this is $2 million for the 2012 World Development Report, which the Bank has devoted to gender equality (see Update 72). The report is expected to maintain the Bank’s controversial market-oriented approach to gender mainstreaming. The post-GAP plan maintains the GAP’s focus on promoting gender equality through women’s economic empowerment, but was expanded to include investment in education and reproductive health as objectives. Like the GAP, the post-GAP plan’s performance indicators are measurements of the quantity of gender-related analysis in country strategies and statistics. Universal metrics do not exist within the Bank to measure gender integration in policy and project lending. The post-GAP plan, like the GAP, has been criticised by NGOs for its lack of a human rights framework. Weak implementation of gender policies has been identified by both the Independent Evaluation Group (IEG, the Bank’s arms-length watchdog) and NGO observers as a significant impediment to gender mainstreaming (see Update 69). A 2009 IEG report stated that the accountability system outlined in the 2001 gender mainstreaming strategy had not been institutionalised, and that "there [were] few or no control systems at any level to ensure implementation of the gender policy". The 2011 to 2013 transition plan calls for clearer accountability for implementation, particularly at the highest levels (country directors and above). However, specific policies that incentivise and insist upon senior management commitment to gender mainstreaming have not been introduced. In 2008, the Bank classified 0.5 per cent of its staff as ‘gender experts’. At the corporate level, the number of staff members formally dedicated to gender was 16 in 2009, compared to 267 staff members devoted to the environment in that year. Critique of the World Bank’s Applying Gender Action Plan Lessons: A Three-Year Road Map for Gender Mainstreaming (2011-2013) , Gender Action × www.genderaction.org/publications/2010/critique_road_map.pdf An evaluation of World Bank support, 2002-08, gender and development, IEG × siteresources.worldbank.org/GENDEREXT/Resources/Gender_eval.pdf =================================================================== 8. Bank’s privatisation approach to social services fails to deliver --------------------------------------------------------------------- While the Bank is developing a new social protection and labour strategy, its approach to health (see Update 71, 65) and continuing push for privatisation of public services have come under fire again (see Update 66). Ghana’s national health insurance scheme, presented by the Bank as a model for developing countries is "unfair, inefficient and un- transparent", according to a report published in March by Ghanaian NGOs ISODEC, Alliances for Reproductive Health, and Essential Services Platform, with support from Oxfam International. It revealed that Ghana’s National Health Insurance Scheme (NHIS) - which has received technical assistance from the Bank - could be benefitting only 18 per cent of the country’s population, despite the fact that every Ghanaian citizen pays for it through value-added tax (VAT). This figure is less than a third of the 62 per cent coverage rate estimated by the government and the Bank. According to Ghanaian activist Patrick Apoya, one of the report’s authors, the official number was inflated by expired subscriptions. Apoya stressed that the report’s main message is that achieving universal healthcare in Ghana is not possible through the NHIS: "the only way out is to strike away annual subscription fees and allow people to enjoy the service for their entire lives once they join. [I]n technical terms, this ceases to be insurance. It actually becomes a publicly funded health system for all." The report argues that "cost-savings, progressive taxation and good quality aid" would allow the government to increase health spending by 200 per cent by 2015. In a blog published by UK newspaper the Guardian, the Bank’s country director for Ghana, Ishac Diwan, is quoted denying that the Bank was touting Ghana as an example for other developing countries, but stressed the importance of including private sector solutions in health systems. Push for private education -------------------------- Despite fierce criticism of its push for privatisation of public services in developing countries (see Update 71, 66, 62), the Bank has also insisted on promoting a greater private sector role in education in its new 10 year strategy for the sector. As the draft strategy was submitted to the board for final approval in March, the Bank’s arms-length watchdog - the Independent Evaluation Group (IEG) - published a review of the institution’s education lending portfolio from 2001 through 2010. It found that the performance of existing education sector projects in the satisfactory range had dropped from 82 to 69 per cent over the past decade, while only about a third of recently closed projects with "learning outcome objectives" substantially achieved them. The IEG review notes that the Bank’s new education strategy focus on ‘learning for all’ "does not ensure that the poor will be targeted or will be the first to benefit". The Bank’s management response to the IEG review argued that portfolio performance has recently improved and that "the new education strategy’s strategic priorities have been designed to help improve learning outcomes." New social and labour strategy ------------------------------ External consultations are underway on the Bank’s concept note for a new 10 year social protection and labour strategy (see Update 74), which focuses on low-income and fragile states, building social protection systems, promoting opportunities and livelihoods, and strengthening knowledge. At a London meeting in March, civil society groups raised a number of issues, including insufficient attention to gender, the absence of the argument for social protection as a human right and the failure to acknowledge other work already done on the topic, especially by the International Labour Organisation. In a response to the concept note, the International Trade Union Confederation said that the new strategy "should not give preference to private sector participation in ... social protection programmes" and should have as a priority the "extension of coverage, by formalising informal-economy workers and other measures". Achieving a shared goal: Free universal health care in Ghana × tinyurl.com/ghanahealth World Bank support to education since 2001, Independent Evaluation Group × tinyurl.com/IEGeducation ITUC/Global Union’s response to Bank’s social protection and labour strategy concept note × ituc-csi.org/ituc-global-unions-response-to.html World Bank wrong to praise Ghana’s healthcare scheme, says Oxfam × www.guardian.co.uk/society/sarah-boseley-global- health/2011/mar/10/ghana-worldbank =================================================================== 9. Call for debt audit as IMF austerity fails --------------------------------------------------------------------- As IMF austerity policies fail to solve Greece’s debt crisis, activists call for an audit commission. Despite ongoing public protests and increasing challenges from academia, old economic principles continue to guide Fund practices. In mid March, the IMF completed the third review of Greece’s Stand-by Arrangement. New conditions include another tranche of government guarantees worth €30 billion ($42 billion) to bail-out troubled banks. The bank guarantee will add another 10 per cent to the total government debt stock. Andy Storey of University College Dublin said, "This is the type of ‘blank cheque’ state guarantee of private debt that has bankrupted Ireland." Disputes had previously erupted between the Greek government and EU and IMF reviewers over the country’s privatisation reforms, heavily pushed for by EU and IMF creditors (see Update 74). Greece has now committed to raise €15 billion through privatisation by the end of the EU-IMF programme in 2013 - more than doubling last year’s pledges. Journalist Nick Malkoutzis, on his blog Inside Greece, commented in late February that "privatisation may be a way of Greece taking ownership of its own debt problem. ... However, this should not disguise the fact that privatisation comes with many deep pitfalls." Is debt sustainable? -------------------- Concerns regarding Greece’s ability to repay its loan have led the IMF to move Greece from the short-term Stand-by Arrangement to the medium-term Extended-Fund Facility. In mid March, eurozone governments agreed to extend Greece’s loan repayment period from three to seven and a half years and - conditioned on the privatisation scale up - offered an interest rate cut from 5.8 to 4.8 per cent. A February briefing by Brussels-based think tank Bruegel criticises EU/IMF loan policies for having "failed to recognise the possibility of insolvency" and recommends that "further lending without a large enough debt restructuring is not viable." Bruegel economists estimate that in order to return to a debt-to-GDP ratio of 60 per cent by 2034, Greece would need a 30 per cent cut in public debt. Warning of the social costs of excessive austerity due to high debt burdens, activist scholars in Greece including Costas Lapavitsas, Giorgos Mitralias and Leonidas Vatikiotis, supported by an international civil society coalition, called for an audit commission to examine Greece’s public debt in February. Their petition states that "current EU and IMF policy to deal with public debt has entailed major social costs for Greece. Consequently, the Greek people have a democratic right to demand full information on public and publicly- guaranteed debt." Based on the commission’s findings, recommendations can be made on how to deal with debt, "including debt that is shown to be illegal, illegitimate or odious." The audit commission for Greece could be a model for other eurozone countries. IMF faces public anger ---------------------- In late March, a bailout for Portugal was increasingly being called inevitable, as its parliament failed to agree a new EU-demanded austerity plan, prompting the government to fall, with national elections to take place in June. As a result, the interest Portugal would be expected to pay on any new bonds has skyrocketed. Nick Dearden of UK NGO Jubilee Debt Campaign (JDC) said, "An EU and IMF bailout would be for private banks, not the Portuguese people." JDC finds that of the €216 billion gross public and private external debt, just €43 billion is owed by the Portuguese government. In late March, New York Times journalist Landon Thomas called the combination of bailouts and increased austerity in countries such as Portugal both "unworkable and unfair. ... A cheaper way to attack the problem would be to go to the root of the issue and restructure the country’s debt." In Ukraine, in late February the Federation of Trade Unions urged the government to stop cooperation with the IMF (see Update 72, 71, 68). Worrying about IMF conditionality impacting wages, pensions and consumer prices, chairman Vasyl Khara said, "We have expressed a resolute protest ... because the demands ... on holding a preliminary dialogue with social partners ahead of determining terms of credit have been neglected again." In late March, more than 6,000 teachers took to the streets in Kiev to demostrate against drastic cuts in education funding that the Ukraine government is planning to meet IMF austerity targets. Also in March, over 7,000 people marched to the offices of Swaziland’s prime minister demanding the entire cabinet resign, because of the fiscal adjustment roadmap presented to the IMF and World Bank to qualify for budget support. Protests were mainly directed against wage cuts for public workers. Ears kept shut -------------- In early March, the IMF hosted a conference on macro and growth policies after the crisis to tackle "some profound questions about the pre-crisis consensus on macroeconomic policies". The Washington event was organised by the director of the Fund’s research department Olivier Blanchard, along with David Romer of University of California, Michael Spence of Stanford University, and Joseph Stiglitz of Columbia University - all economists associated with criticisms of mainstream economics. One debate challenged former Fund consensus by arguing for the stabilising effects of counter-cyclical fiscal policy. Dani Rodrik of Harvard University and Andrew Sheng of the China Banking Regulatory Commission advocated the greater use of industrial policies in developing countries (see article 13). Sheng criticised "politically blind" analysis that ignores distributional consequences of growth policies. Dean Baker of US-based Center for Economic and Policy Research called the conference a "glasnost" for IMF thinking, but was sceptical whether Fund "policies have undergone a similar adjustment." Baker finds that the IMF continues to promote "internal devaluation" - "forc[ing] workers to take pay cuts under the pressure of high rates of unemployment" - to confront economic crises, policies that have "led to an enormous economic and human disaster". Call for debt audit in Greece × www.elegr.gr Guess which policy your central bank will pursue, Dean Baker × tinyurl.com/imfbaker =================================================================== 10. The long road to nowhere? Disputes on the global financial architecture --------------------------------------------------------------------- While official ambitions are to refashion the global financial architecture, the IMF has yet to publish new thinking on capital flows, the G20 discussion on global imbalances is mired in dispute, and the debate on a new monetary system may go in the wrong direction. The past year has re-opened thinking about the role of capital flows in economic development (see Update 74, 73, 72). In order to address the potential side effects of surges in financial flows, the IMF and the Bank of Indonesia co-organised a low-key conference in Bali in early March. It "provided an opportunity for discussion of recent developments in capital flows and practices for effectively managing such inflows." No one from the IMF management attended the conference, with head of the IMF’s Asia Department Anoop Singh sitting on only one afternoon panel. The IMF staff’s analytical work on capital account management (see Update 74) including "draft guidelines" for using capital controls was discussed by the IMF board held in March. The board paper, written by the IMF policy department, re-asserted the IMF’s recent position that capital controls should only be used in limited circumstances. It specifies that only countries with sufficient reserves, exchange rates that are not undervalued and an economy that is overheating should try to use capital controls. A mid March research paper on Capital flows to developing countries in a historical perspective, published by intergovernmental think tank the South Centre, asks whether "the current boom will end in a bust?" The paper argues that the IMF approach to capital controls may not protect against the risks from volatility in flows to developing countries: "Controls over both inflows and outflows should be part of the arsenal of public policy, used as and when necessary and in areas and doses needed, rather than introduced as ad hoc, temporary measures." The paper concludes, "experience shows that when policies falter in managing capital flows, there is no limit to the damage that international finance can inflict on an economy." That perspective seemed to be shared by Brazil. According to the Wall Street Journal, in an end March meeting in China, Brazil "voiced wariness of rigid rules for using capital controls, wanting to maintain a freer hand." A working paper published by Boston University’s Kevin Gallagher contains a "preliminary analysis" of interest rates and exchange rates which "suggests that Brazil and Taiwan have been relatively successful in deploying controls, though South Korea’s success has been more modest." Gallagher recommends global coordination on "policing capital controls", "coordinated imposition of capital controls", and "strip[ping] away the patchwork of legal barriers to capital controls that are found in trade and investment treaties". Many civil society organisations remain sceptical of the IMF board endorsing such a view. In an early March statement to the UN, Malaysia-based NGO Third World Network warned about the approach advocated by France in the G20 process (see Update 74): "The possibility of the IMF having jurisdiction over capital account regulations can be dangerous. Efforts to harmonise the complex array of policies included in capital controls is not appropriate in a world where countries are in very diverse stages of development and need national policy space." Filomeno St Ana III of Philippine NGO Action for Economic Reform agreed that "even as international rules are necessary to address supra-national development, ... international rules have to be thin." Global imbalances remain ------------------------ The capital flows debate is intricately linked with the problem of global imbalances - large and persistent trade and financial surpluses and deficits of some countries. The IMF has been trying, unsuccessfully, to resolve them for years (see Update 54, 53, 51). Just before the mid February meeting of G20 finance ministers, the Banque de France published a Financial Stability Review with essays on global imbalances by all G20 central bank governors. Zhou Xiaochuan of the People’s Bank of China argued global imbalances are driven by different national desires for savings and by the lessons learned from the Asian financial crisis when international organisations "failed to perform their regulatory responsibilities over abnormal capital flows. ... Instead, excessive and stringent conditionalities were imposed." Axel Weber of the German Bundesbank countered with "current account surpluses were also caused by the fact that some countries pursued exchange rate policies to artificially support their export sectors." While the G20 countries agree that global imbalances must be dealt with, so far they have only managed to select the indicators to judge whether there is an imbalance. In future meetings they will formulate guidelines for assessing the indicators. Whatever the G20 agrees will likely come back to the IMF for surveillance. That makes this year’s IMF triennial surveillance review, planned to be completed by September, a potentially important process especially as the IMF is still not trusted by many developing countries. It comes down to money ---------------------- With much of the imbalances debate directed at the Chinese exchange rate, efforts towards international monetary reform (see Update 74, 72, 70) have yet to generate consensus at the IMF or outside. In late March, at the behest of G20 chair France, China hosted a one- day ‘seminar’ on international monetary reform in Nanjing. While the Chinese foreign ministry called the meeting an unofficial academic discussion, French president Nicolas Sarkozy opened the event. Participants included IMF head Dominique Strauss-Kahn, former IMF heads Michel Camdessus and Rodrigo de Rato, as well as academics and almost all G20 finance ministers. The French government launched a new global-currencies.org website for the G20, with the numerous background papers for the seminar as well as existing IMF and G20 papers. The G20 has commissioned the IMF to author a report for the next G20 finance ministers’ meeting in mid April, just in advance of the IMF spring meetings. It is unlikely the report will contain much new analysis beyond the IMF board papers discussed in December (see Update 74). World Bank president Robert Zoellick argued in the Financial Times in mid February that "over time the world economy will need to manage a system of multiple major currencies" based on "flexible exchange rates, without intervention". This market-oriented arrangement runs counter to the calls by UN agencies for a more stable and coordinated exchange rate system (see Update 70). Even Zhou, in his essay, called for "advanc[ing] the international monetary system towards diversification over the long run" rather than explicitly advocating a single reserve currency system. "Without substantial reform of the monetary system there are no chances that non-recessionary mechanisms to reduce global imbalances and the growing currency volatility can be achieved," argued Aldo Caliari of US-based Center of Concern. "Unfortunately, without strong signs that countries are willing to engage in the constructive collective agreements that this calls for, a chaotic slippage into the emergence of a multi-currency system seems the more likely, default scenario." Capital flows to developing countries in a historical perspective, South Centre × tinyurl.com/southcentrerp37 Regaining control?, Kevin Gallagher × tinyurl.com/gallagherassessment Statement to the ECOSOC-BWI meetings, Third World Network × tinyurl.com/capflowstwn =================================================================== 11. Gold sales: funding debt relief or IMF bureaucracy? --------------------------------------------------------------------- Preliminary IMF board discussions on the use of excess money generated through sales of part of the IMF’s gold reserves are awaited before the Fund’s spring meetings in mid April. Gold sales were completed in late December 2010, at a time of historically high gold prices, providing the Fund windfall profits of at least $2.8 billion more than projected in 2008, when the decision for gold sales was taken (see Update 60). Fund staff indicated that discussion on the use of excess profits will be likely to centre on directing them to the Fund’s new income model (see Update 61) or keeping them as reserves, ignoring demands by civil society groups. In early April, more than 50 international and national civil society organisations called on the IMF board to direct "all excess windfall profits from gold sales to fund debt cancellation and/or non-debt creating assistance for poor countries." The statement urges the board "to expand the criteria for the Fund’s new Post-Catastrophe Debt Relief Trust Fund to provide debt relief without harmful conditions to countries in crisis, and use the gold sales proceeds to fund it." NGO position statement × tinyurl.com/goldsalesimf =================================================================== 12. Bank safeguards and independent scrutiny at risk? --------------------------------------------------------------------- Civil society groups have challenged Bank plans to rush through a new lending instrument, Program-for-Results, that could mean safeguards or equivalent standards no longer apply to much of Bank lending. Meanwhile, a secretive review could strip the Bank’s accountability bodies of their independence. A concept note for the proposed Program-for-Results (P4R) instrument was released for online comment in February, but key elements are yet to be elaborated and consultation schedules were only announced in late March, despite plans for board approval by July. P4R is intended to support government programmes, with funds disbursed based on results, such as the percentage of women receiving antenatal care or the implementation of an improved procurement system. Funds would flow directly into national budgets, with the Bank’s financial and technical support focussing on countries’ institutional development. While the Bank claims that P4R will not supplant its existing lending instruments, there are signs that the highly flexible P4R may replace a large share of project-based investment lending. Reportedly, the Bank’s vice president for East Asia and the Pacific, Jim Adams, said he hoped that half of his portfolio for the financial year starting in July would be P4R loans. The Bank would not apply its own safeguards to P4R loans or require country laws, regulations and systems to meet common standards. Instead, for each operation it would identify criteria to assess the adequacy of countries’ systems for financial management, procurement, and for addressing relevant environmental and social risks. The government and the Bank would "agree on specific principles and standards to be adhered to by the client", subject to regular reviews. However, the Bank’s Independent Evaluation Group (IEG) has frequently found Bank monitoring capacity to be weak (see Update 71). The Bank policy and procedures which would govern P4R have not yet been developed. Category A activities posing the most serious social or environmental risks would be excluded from P4R, but category B activities - having "substantial impact" - would be eligible; these constitute about half of the Bank’s investment lending portfolio. Moreover, civil society groups have repeatedly raised concerns about miscategorisation of projects (see Update 65). P4R is said to be a response to developing country demand to use country systems, focus on results and offer stable funding to scale up successful programmes. P4R would enable the Bank to overcome procedural difficulties that have prevented it from ‘pooling’ external funds with other donors. However, procurement remains a hot issue, with developing countries pushing the Bank to allow preference for domestic providers rather than insisting on international competition. The Bank notes donor imposition of results or review mechanisms could create "new forms of conditionality" and a "risk of [P4R] being perceived as a lowering of Bank standards". Nancy Alexander of German think tank the Heinrich Boell Foundation said that "P4R would mean safeguards that have worked to limited corruption and damage to communities and the environment would no longer apply to a substantial proportion of the Bank’s portfolio. Either the Bank must retain the use of safeguards for category B operations or it must embrace international standards." Accountability to be neutered? ------------------------------ The Bank is conducting a secretive review of its accountability mechanisms, which could strip them of their independence (see article 15). It covers the Inspection Panel (IP), IEG, Compliance Advisor Ombudsman (CAO), integrity and internal audit departments (see Update 34). Lori Udall of US-based Montpellier Consulting said that "the whole review has been conducted in complete secrecy, and no relevant documents have been released. Moreover, the IP and CAO, which respond directly to the complaints of affected people, are getting lumped in with internal bank oversight mechanisms that are not independent." In November, the Bank began a two-year process of reviewing and streamlining its safeguards and policy on using country systems (see Update 42), which will be combined to form a single policy. A draft approach paper is expected in April and a draft policy for consultation from July. The final draft is scheduled for board approval in September 2012. The review will result in a less stringent approach to safeguards for projects deemed "low risk" (see Update 70). Program-for-Results web page × www.worldbank.org/p4r World Bank safeguards review × go.worldbank.org/00E973V3B0 =================================================================== 13. Industrial policy: World Bank turning the corner? --------------------------------------------------------------------- Over the past year, World Bank chief economist Justin Lin has tried to reopen debate at the Bank over whether developing country governments should adopt active industrial policies, previously taboo at the institution. His thesis is that though the market remains the motor for economic development, "the government should play an active role in facilitating industrial upgrading and infrastructure improvements." London School of Economics academic Robert Wade, in a January reply to Lin, argues that this "door opening" argument could signal a move away from the "Washington consensus" that "economic growth is a function of the size and competitiveness of markets" and "government ‘intervention’ tends to be more costly than ‘market failure’." Lin also introduces some subtlety into the Bank’s previously unreserved championing of foreign direct investment (FDI), arguing that while much overseas investment can be good for developing economies, certain types can cause severe problems (see article 10). He highlights that portfolio investment in stocks and shares "tends to target speculative activities (mostly in equity markets or the housing sector), which create bubbles and fluctuations. They are volatile by nature and often contribute to Dutch disease and currency crises." This more nuanced approach appears to be at odds with the received wisdom at the Bank as reflected in the strong push for FDI liberalisation in its Investing Across Borders report (see Update 72) and the rankings of the Doing Business report (see Update 67, 66, 62). Collins Magalasi of NGO the African Forum and Network on Debt and Development (Afrodad), commented that "the truth is that the Bank has for several decades consistently and recklessly undermined countries’ ability to set their own economic policies, and promoted the kind of ‘one size fits all’ liberalisation and deregulation that make it impossible for them to use sensible industrial policy." See full article online at × www.brettonwoodsproject.org/industrialpolicy75 Robert Wade reply to Lin’s 6 steps × onlinelibrary.wiley.com/doi/10.1111/j.1758-5899.2010.00049.x/pdf Justin Lin - six steps for strategic government intervention × onlinelibrary.wiley.com/doi/10.1111/j.1758-5899.2010.00046.x/pdf =================================================================== 14. World Bank research impact questioned --------------------------------------------------------------------- World Bank evaluations of the influence of its research and reports paint a mixed picture. A July 2010 Bank paper on The World Bank’s publication record, found "evidence that many [Bank] publications have influenced development thinking ... [but] a non-negligible share of the Bank’s publications have received no citations, suggesting that they have had little scholarly influence". A January blog by Bank staffer Adam Wagstaff examined whether the Bank’s flagship World Development Reports (WDRs) are as influential as they claim to be. He found that while internet searches on flagship reports of the Bank, IMF and UN had declined significantly in the past decade, "on average the search frequency for the WDR was 60 [per cent] that of the HDR [Human Development Report, the UN’s flagship report]." After 2000 the WDR was "left behind" by the HDR and the IMF’s World Economic Outlook in news item coverage. This confirms previous criticism that evidence of the WDR’s influence was "noticeably thin" (see Update 66). See full article online at × www.brettonwoodsproject.org/wdr75 The World Bank’s publication record, World Bank × elibrary.worldbank.org/content/workingpaper/10.1596/1813-9450-5374 =================================================================== 15. UK review backs World Bank but notes flaws --------------------------------------------------------------------- In March, the UK government’s review of multilateral aid (see Update 72) endorsed the Bank, despite identifying major institutional weaknesses. It’s low-income country arm, International Development Association (IDA), was judged "very good value for money" for UK aid (see Update 74), but criticised for the "lack of client country voice", limited use of country systems, and high transaction costs for projects. Weak performance in fragile states and on integrating gender was also highlighted. The Bank’s private sector arm, the International Finance Corporation (IFC), was criticised for the dominance of middle-income countries in its investments. A UK parliamentary inquiry also called for a more independent evaluation body and merit-based presidential selection. =================================================================== 16. World Bank launches new Africa strategy --------------------------------------------------------------------- In March the World Bank launched its new Africa strategy, outlining three main areas in which it will focus its operations: competitiveness and employment, the vulnerability and resilience of citizens, and governance and public sector capacity. However, a major focus is on "leveraging partnerships", including how to "leverage the Bank’s financing to crowd-in other sources of private investment." Dr. Kwame Osei, writing for the website Modern Ghana, observes that "This new approach from the World Bank will never enable Africa to develop at a point where inordinate poverty [and] disease ... will be eradicated. (see Update 62). =================================================================== 17. New report on Bank’s role in Rogun dam --------------------------------------------------------------------- In a March briefing, US NGO Bank Information Center (BIC) detailed risks surrounding the construction of the Rogun dam in Tajikistan, for which the Bank is funding environmental and social impact assessments (see Update 74). It warns that the project could harm water supplies in the region and lead to the involuntary resettlement of at least 30,000 people. BIC called on the Bank to ensure the project would directly address poverty and energy access, give full consideration to alternatives and engage with local stakeholders. Tamina Juraeva, of Tajik NGO Bureau of Human Rights and Rule of Law, said: "We see the Bank’s role in our project in providing information support and involving members of civil society in all processes related to resettlement." =================================================================== 18. Bank seeks business in Middle East unrest --------------------------------------------------------------------- Staff at the Bank’s political insurance arm, Multilateral Investment Guarantee Agency (MIGA), greeted unrest in the Middle East and North Africa as a business opportunity, amid criticisms that IFI policies had fuelled the crises (see Update 74). In a March blog, Hoda Atia Moustafa of MIGA said the events represented a "unique opportunity for MIGA" to promote its products in a region where it has no clients. Amy Ekdawi of US NGO the Bank Information Center said, "insurance for investors in the region is much needed. But the fact that the Bank looks at this crisis - that it might have helped create according to some analysts - as yet another opportunity to exploit, highlights its reneging culture and incentive structures." =================================================================== 19. IMF fails to include social impact in review --------------------------------------------------------------------- In mid March, the IMF released a concept note outlining the scope of its internal conditionality review (see Update 74), to be published before the Fund’s annual meetings in September. The note states that the IMF will look at "how programmes have taken account of the social impact of planned policy measures", but does not mention an analysis of the actual impacts that Fund-required policy reforms have on borrowing countries. Nuria Molina of Brussel-based NGO Eurodad criticised the note for revealing the review’s "limited scope", and said "it confirms civil society groups’ fears that the IMF would not actually take measuring the impacts of conditionality seriously". =================================================================== 20. Uganda: aid witheld after IMF PSI decision --------------------------------------------------------------------- As the IMF refused to sign off on Uganda’s first review of the Policy Support Instrument (PSI, see Update 71) in mid February, fears mounted over declining donor support. An IMF spokesman said Uganda’s macroeconomic policies were "inconsistent" with objectives under the PSI, agreed in May last year. The Dutch government is currently withholding about €3.2 million ($4.5 million) in budget support to Uganda in reaction to the IMF’s decision. Soren Ambrose of NGO Action Aid International said, "With controversies persisting around IMF programmes, donors should be careful to not give the Fund more power by linking their aid disbursements to its programmes." =================================================================== 21. Singaporean becomes first Asian to lead IMFC --------------------------------------------------------------------- In late March, Singaporean finance minister Tharman Shanmugaratnam was selected as chairman of the International Monetary and Financial Committee. The decision - made behind closed doors - means for the first time an Asian will lead the IMF’s primary policy setting body. Former executive board member Domenico Lombardi said, "This is part of a broader strategy aimed at engaging Asia in the new round of reforms which will be centred on the international monetary system instead of on the IMF itself." Singapore has a small IMF quota, is classified as an advanced economy by the IMF and pursues a very open trade and investment policy. =================================================================== 22. Nigerian economists bash IMF advice --------------------------------------------------------------------- February’s IMF article IV, consultations - the Fund’s annual economic progress report - on Nigeria resulted in strong criticism from the Nigerian government, central bank, and economic analysts. The IMF had advised Nigeria to raise interest rates and devalue its currency, the naira. After implementing similar advice in the 1980s, the country experienced a severe economic crisis. Nigerian newspaper The Punch reports that the chairman of the national Labour Party, Dan Iwuayanwu, said "both the IMF and the World Bank had never been helpful in their advice on how to move the economy of any third world nation forward." IMF can’t dictate to Nigeria, Olusola Fabiyi × tinyurl.com/imfnigeria + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + Published by Bretton Woods Project Critical voices on the World Bank and IMF No permission needed to reproduce articles. 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