Dispatch from the big annual meetings of the World Bank and International Monetary Fund in Washingto
Colleen Freeman is a policy analyst at Friends of the Earth-U.S. and Peter Bossard is policy director at International Rivers Network. They took part in discussions between environmental and other nonprofit groups and officials of the World Bank and IMF in the lead-up to the institutions’ annual spring meetings held April 24-25.
Monday, 26 Apr 2004
Over the past weekend, the World Bank Group and the International Monetary Fund met to take stock of the institutions’ work and build consensus on how to tackle development issues. As in past years, the spring annual meetings were also an opportunity for civil society from around the world to voice their concerns about the institutions’ policies, practices, and priorities for poverty alleviation as well as pressing social and environmental issues.
In the days leading up to the official meetings, civil society ostensibly had its say in the process through a flurry of external “dialogues” arranged by both NGOs and Bank and Fund officials. However, the annual meetings of the Bank and Fund continue to face criticisms for being secretive in part because the proceedings are held behind closed doors and the minutes are not disclosed publicly. Indeed, most of what is known about the meetings is garnered from press releases and a final communique issued by the Development Committee.
This year, the World Bank heard a bleak Global Monitoring Report on failing efforts to achieve the Millennium Development Goals and the urgent need for significant action if they are to be met by their target year of 2015. Under the banner of fixing the global imbalance between rich and poor countries, the Development Committee called upon industrialized countries to make concrete efforts to dedicate 0.7 percent of gross national product to development aid and improved aid effectiveness. The sunset of the Heavily Indebted Poor Country Initiative at the end of this year and pressure to revitalize multilateral trade talks were some of the many topics discussed this past weekend.
The Bank also affirmed its intention to promote controversial “high-risk/high-reward” projects. Under the auspices of the Bank’s Infrastructure Action Plan, the high-risk strategy aims to substantially increase lending for infrastructure development, including large-scale dam projects over the next two years, despite the Bank’s poor track record of managing the social and environmental risks that accompany hydropower development.
The emergence of the Bank’s high-risk/high-reward development strategy comes at a time when the International Finance Corporation — the Bank’s private-sector lending arm — is embarking on three policy-revision processes. Last week, civil society met with IFC Executive Vice President Peter Woicke to make known their concerns and priorities for the revision of the social and environmental safeguards, information disclosure policies, and the Bank’s Pollution Prevention and Abatement Handbook.
Several civil-society representatives also met with the newly appointed executive vice president of the Multilateral Investment Guarantee Agency, Yukiko Omura. On May 1, Omura will take the helm of the most backward institution of the World Bank Group. MIGA has failed to adopt even the Bank’s minimum transparency, environmental, and social standards. Civil society representatives conveyed to the executive vice president-designate that she must make significant reforms of the Bank’s private insurance arm or NGOs will call for the abolition of the institution.
Another major concern for many in civil society is the future role of the World Bank in the oil, gas, and mining sectors. A global coalition of NGOs met with President James Wolfensohn to discuss a groundbreaking report that calls on the Bank to adopt a number of sweeping reforms for the extractive industries. The Extractive Industries Review was commissioned by Wolfensohn in 2001 in response to international criticism that Bank-financed investments in the extractive industries fail to alleviate poverty and are plagued by massive environmental and social problems. Some of the EIR’s recommendations include dramatically increasing investment in clean, renewable energy, phasing out support for fossil fuels, implementing a “no-go zones” policy that would bar Bank investments in ecologically sensitive areas, and granting indigenous and other affected communities the right to prior informed consent. A decision on whether the Bank will adopt the EIR’s recommendations is expected later this summer.
Finally, the sudden resignation of IMF Head Horst Kohler last month has thrust the democratic deficit and governance problems of the two institutions back into the spotlight this year. By tradition, the United States appoints the president of the World Bank while the Europeans self-select among themselves for the head of the Fund. This nontransparent and undemocratic process is reflective of the dominant voting power that the U.S. and the Europeans have within these institutions. Indeed, there is a storm looming over the selection of the next World Bank president, which will happen in 2005 when Wolfensohn’s term ends.