By Emad Mekay
WASHINGTON, May 26 2004 (IPS)

Attempts by civil society groups to influence policies at the World Bank and the International Monetary Fund (IMF) under a controversial consultation programme have been mostly fruitless, a new study says.

Those groups might have to demand that their input be taken seriously if they still intend to influence the process, known as the Poverty Reduction Strategy Paper (PRSP) adds the report, ‘Rethinking Participation’, by ActionAid USA and ActionAid Uganda.

"The high-profile effort to use ‘participation’ rhetoric to get citizens’ groups to stop protesting in the streets and sit down at the table has now run aground because, after four years of attempted participation in the processes, no major policy changes have resulted in the key World Bank and IMF loan conditions," it says.

But a senior World Bank official told IPS the results were actually mixed, and that there had been cases when civil society groups and labour unions participating in the PRSP process influenced borrowing countries despite the advice of the Bank and IMF.

The process also gave groups unprecedented access to policy-making in developing countries, he added.

A PRSP is a roadmap of a country’s macro-economic, structural and social policies and programmes that is submitted to the World Bank and the IMF before a government can receive funding. Designing those plans is supposed to be a "participatory process" that includes civil society and development partners, as well as the two lenders.

According to the World Bank, as of Apr. 30, some 37 countries have submitted PRSPs, including Burkina Faso, Benin, Ghana, Mozambique, Vietnam, Armenia, Bolivia, Bangladesh, Yemen and Pakistan. Some 48 others have submitted their initial plans, a watered down version of the PRSP.

But the Papers, which are supposed to emerge from a government-led two-year process that includes "town hall meetings" with citizens’ groups and non-profit agencies, are now seen as designed to reduce global protests against the Bank and IMF, charges the new report.

Their critics accuse the two bodies of pressing policy changes on borrowing countries via the loan conditions that are included in the PRSPs, a charge the two lenders deny.

Those loan conditions are based on a set of free trade and free market-oriented reforms, including privatisation, deregulation and financial liberalisation, and removal of trade protection for domestic companies.

The World Bank and IMF contend that the PRSPs are homegrown and that governments ultimately decide whose advice to take when designing their economic programmes.

"It is entirely possible that we have in the context of our advisory relation to governments advised them to do things that civil society interlocutors might feel were not in the best interest of the country or the government but it’s really the government that’s left to decide," said John Page, director of the Poverty Reduction Group at the World Bank.

The ActionAid report also charges that the PRSP process has been structured so that borrowing governments will limit their plans to those they know will be approved by the executive boards of both the IMF and World Bank.

"There is a lot of evidence to suggest that borrowing governments are self-censoring themselves and what they permit to be discussed in these consultations," said Rick Rowden, a policy analyst with ActionAid USA and a co-author of the new paper.

"They don’t want citizens’ groups coming up with all kinds of alternative economic policies that they know the World Bank and IMF will never accept, and they don’t want any alternative policies to make their way into the national PRSP strategy paper or else the paper might get rejected by the World Bank and IMF and jeopardise their access to more loans."

But Page said the two institutions are far more flexible in their demands and do allow inputs from civil society.

"It’s true, obviously, that governments know the perspective and the point of view of the Bank and the Fund but it isn’t the case that they have to subscribe in detail to every view that’s expressed by the Bank in order to have their PRSPs considered favourably and endorsed by the board," Page said in an interview.

He cited trade liberalisation as an example where most PRSPs were influenced by civil society groups, which generally favour gradual – if any – liberalisation, rather than by the pro-liberalisation bent of the two lenders.

Most PRSPs are silent about the role that trade will play in poverty reduction and do not put forward ambitious programmes for changing a country’s trade policy, added Page.

"I’d say that those are cases in which governments have tended to listen to their own business community, to their labour movement, or to their civil society much more than they listened to the Bank and the Fund," he said.

But ActionAid argues that governments appear to be allowing civil society groups only minimal influence on the PRSP process.

When Angolan groups met in June 2001 to organise their input into that government’s plan, for example, they complained that officials seemed reticent to organise a consultation. The only PRSP workshop open to them was confined to social matters rather than "macroeconomic" and other structural adjustment policy issues, which are considered to be the ones that can most influence poverty.

Many groups in developing countries, such as Honduras, Vietnam and Uganda, report that they were barred from participating in discussions about macroeconomic and structural policies during the official PRSP consultations.

A May 2003 report by the Centre for Latin American Research and Documentation noted, "the participation of Bolivian civil society in the definition of macroeconomic programmes is virtually nil, above all with reference to the PRGF (an IMF offshoot of the PRSP)".

But Page said the reality on the ground is far more complex than ActionAid describes.

"The experience has been so varied that in many cases there has been an opening (into the PRSP process) and I think that most civil society groups would say that it never existed before in the area of policy-making."

Though imperfect now, that participation will have long-term implications, he added.

"This process of observing the participatory process, evaluating it, having the boards (of the Bank and the Fund) discuss it and then feeding that information back will result in a deeper and more durable participatory process," he said.

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