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DEVELOPMENT: No Progress at IMF, World Bank Meetings

Emad Mekay

WASHINGTON, Apr 26 2004 (IPS) - The International Monetary Fund (IMF) and World Bank concluded their meetings here Sunday after spotlighting global economic recovery but sweeping human development issues under the carpet.

The three-day gathering of finance ministers and central bank governors from around the world was full of reports from the two Bretton Woods institutions on economic growth, fiscal policies and interest rates, but education, HIV/AIDS, the environment and human development all took a backseat, getting little more than routine lip service.

“We felt the meetings were strong on rhetoric and weak on action,” said Max Lawson policy advisor of the global development group Oxfam International. “We still do not see a lot of progress really. These poor countries are still being crippled by debt and not near enough aid, mainly to education.”

The development committee, a joint body of the World Bank and IMF, again urged developing nations to deepen controversial structural changes, and asked developed countries to match that work by providing more financial aid, loans and market access for developing country exports.

“I thought that the meetings were very well-balanced in saying that the developing countries need to deal with capacity, legal and judicial reform, financial sector reform and fighting corruption, but on the other side, there’s a need for the rich countries to assist on building capacity, to open their markets for trade, and to provide additional aid, included in which is consideration of debt,” said World Bank President James Wolfensohn.

He also called on rich nations to spend less on their militaries, which the bank estimates at 900 billion dollars annually, and more on aid, which it puts at only 50 billion dollars a year, only one-half of which goes out in cash with the rest in debt relief and technical assistance.

But despite such calls, many which have been made before, no money was pledged at the meetings of the two organisations, each of which has 184 member nations. Nor were new concrete proposals adopted.

Independent advocacy groups say that progress towards meeting the Millennium Development Goals (MDGs) – the official focus of the gathering – which include halving world poverty, providing universal primary school education and cutting deaths of children under five by two-thirds by 2015 remains “pitiful”.

Bank and IMF officials said during the meetings that with less than 11 years to go, based on current trends most MDGs will not be met by most countries, particularly in sub-Saharan Africa, Latin America and the Middle East.

Developing nations and civil society groups were also disappointed the meetings failed to resolve a number of specific issues.

No decision was made on a request from African nations to create a position of deputy managing director, whose portfolio would focus on Africa.

And the World Bank said it would pass judgement on the controversial Extractive Industries Review (EIR) only in June.

A study of the bank’s heavily criticised support for mining and energy projects, the EIR urges the body to stop its funding of mining, gas and oil projects and to redirect its investments into renewable energy projects, among other things.

Bank sources told IPS that the institution’s management is still hesitant about accepting the report’s recommendations on human rights, transparency and protected areas, as well as energy investments.

Advocacy groups are furious that the decision is taking so long.

“When will the World Bank accept rhetoric must be replaced by genuine commitments?” said Hannah Ellis, international financial institutions campaigner at Friends of the Earth.

“The bank claims it is not powerful enough to implement the changes required to ensure its mission of alleviating poverty. After 60 years, the World Bank is still unable to define what poverty means, let alone propose a solution,” she added.

But progress was made on one item – the choice of a new IMF leader. Rodrigo Rato, a minister in the conservative government of former Spanish Prime Minister Jose Maria Aznar, won a nod of approval from some African finance ministers along with the support of Latin America, the European Union and the United States.

Rato is due to be confirmed later this week – but developing countries and civil society groups are still questioning the process of selecting the executive director.

Traditionally, a European has led the IMF while the World Bank presidency is given to an American.

Veteran activist Nancy Alexander, director of the Washington-based Citizens Network on Essential Services, said the lack of transparency and democracy in that process also infused the weekend meetings, and helps to explain their lacklustre results.

“The process is not a very creative process, and certainly if the institutions were more democratic, then there would be some reason to expect that meetings like this would be more diverse, more creative and more (productive),” she said.