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Bretton Woods Update 27

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					                                                                                                                                               B R E T TON WOODS                                     ® update
                                                                                                                                               A DIGEST OF INFORMATION AND ACTION ON THE WORLD BANK AND IMF




                                                       Ghanaians contest Bank-backed                                                                                                        foreign exchange so this arrange-
                                                                                                                                                                                            ment will add to pressure on Ghana’s
                                                                                                                                                                                            balance of payments. The Ghanaian

                                                       water privatisation                                                                                                                  state also retains responsibility for
                                                                                                                                                                                            sewerage and for rural and small
                                                                                                                                                                                            town systems.
                                                                                                                                                                                               The nature of the deal can be
                                                       Ghanaian organisations have mobilised in recent months to prevent the privatisation of their
W W W. B R E T T O N W O O D S P R O J E C T. O R G




                                                                                                                                                                                            explained by the choice of consul-
                                                                                                                                                                                            tants which drew it up at a cost of $3
                                                       country’s urban water supply system. They have formed the Coalition Against the Privatisation                                        million. “The key studies were com-
                                                                                                                                                                                            missioned and paid for by the World
                                                       of Water in Ghana which argues that the privatisation package is a bad deal both technically and                                     Bank and bilateral donors such as
                                                       financially. It says the reforms are largely imposed by external interests led by the World Bank and                                 DFID.None of those studies were ten-
                                                                                                                                                                                            dered in Ghana.The consulting firms
                                                       the IMF, which have imposed tough conditions.                                                                                        all happened to be ideologically
                                                                                                                                                                                            favourable to privatisation and had a
                                                       The Coalition comprises a range of          through a mix of public distribution,       ISODEC briefing complains: “under            track record of working for large pri-
                                                       individuals and organisations:work-         community management and pri-               the terms of the contract the foreign        vate water companies”, argues
                                                       ers, managers, researchers, engi-           vate sector procurement. Higher tar-        companies have no responsibility to          ISODEC. The consultants included
                                                       neers, community leaders, user              iffs charged to wealthier households        raise funds for renewal and expan-           Louis Berger and the Adam Smith
                                                       associations and charities. It claims       can cross-subsidize systems in low          sion investments”.The Government             Institute. The government body
                                                       to “bring to this debate a collective       income neighbourhoods.                      of Ghana still has responsibility for        overseeing water privatisation—the
                                                       wealth of knowledge and experi-                 A comprehensive rebuttal of the         raising funds; it is expected to raise       Water Sector Restructuring Secre-
                                                       ences far in excess of what any single      privatisation proposal from the Inte-       $500m in the first two to three years        tariat—is also viewed with suspicion
                                                       institution can command”. It recog-         grated Social Development Centre            following privatisation. This will           as it is directly funded by the World
                                                       nises the need to reform public water       (ISODEC) complains that “much of the        come from official sources such as           Bank and bilateral donors.
                                                       supply institutions and resolve their       current reform process has been pro-        the World Bank and African Develop-             The World Bank has argued in a
27                                                     severe financial constraints. It sug-       pelled by the World Bank and some           ment Bank. The World Bank’s IDA              number of reports—including its
                                                       gests, however, that “any reform            bilateral donors using their lending        will fund a new Operating Invest-            recent Private Sector Development
                                                       must be aimed at achieving full pro-        and aid as punitive levers”.A 5 March       ment Fund which will provide capital         Strategy—that the poorest people are
MARCH/APRIL 2002




                                                       tection of the right of all to potable      IMF document spells out conditions          to companies for specific projects.          often forced by inadequate state ser-
                                                       water”. Currently around half of            for providing further loans to Ghana.          Likewise the Ghanaian govern-             vice to obtain their water from pri-
                                                       Ghana’s population has no regular,          These include implementation of             ment has responsibility for subsi-           vate vendors at high rates. Thus a
                                                       safe water supply.                          full cost recovery in public utilities      dising the water companies if they           well-organised and regulated pri-
                                                          The official plan is to divide           and the introduction of an automatic        raise prices to levels which poorer          vatisation can help obtain a better
                                                       Ghana’s urban water systems into            price raising formula for electricity       customers cannot afford. As compa-           deal for them. It argues that levying
                                                       two large concessions to be leased to       and water.                                  nies are anyway being awarded                charges on those who can afford to
                                                       two different companies. The Coali-             The decision to bring in foreign        monopolies within their business             pay for their water will raise revenue
                                                       tion argues that existing regional          companies is justified on the basis         areas, they face little incentive to cut     for future investment to expand
                                                       water systems which combine urban           that they will invest in new infra-         prices. It is estimated that water           water provision. It also points to its
                                                       and rural areas are more efficient.         structure and deliver services more         prices may rise up to 300 per cent.          loan of US$25 million to support the
                                                       These can reach poor households             cheaply and efficiently. But the            Sale of water does not generate                                    Continued on page 2



                                                      “Mistakes are made. That is economics. And that is why it is so much fun.” – page 5
                                                       Bank condemned for Dams Commission follow-up . . . . . . . . 2                          IMF “fun” with Argentina . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
                                                       Company seeks compensation for re-nationalisation . . . . . . . 2                       Nigeria sends IMF away . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
                                                       NGOs continue challenge to Bank on oil, gas and mining . . . 3                          IFC reviews social and environmental policies . . . . . . . . . . . . . 5
                                                       No investigation into Peru goldmine corruption . . . . . . . . . . . 3                  Bank Board schedule announced . . . . . . . . . . . . . . . . . . . . . . . . 5
                                                       World Bank + IMF = global deforestation . . . . . . . . . . . . . . . . . 3             Parliamentarians gear up to increase scrutiny of World Bank 6
                                                       Limitations of Asian PRSPs revealed . . . . . . . . . . . . . . . . . . . . . . 4       Bujagali dam affected by Enron-fallout . . . . . . . . . . . . . . . . . . . 6
                                                       WB study questions breadth and impact of PRSP participation 4                           Bank downplays Lesotho dam corruption . . . . . . . . . . . . . . . . . 6
                                                       Empowerment agenda “a special challenge” . . . . . . . . . . . . . . 4                  Citizens’ Guide to the World Commission on Dams . . . . . . . . 6
                                                       New report on Bolivian PRSP . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4   Wolfensohn appoints results champion under US pressure . . 7
                                                       Making Services Work for Poor People . . . . . . . . . . . . . . . . . . . . 4          Development finance summit a fiasco . . . . . . . . . . . . . . . . . . . . 7
                                                       Trade policy training challenged, but gets more funds . . . . . . 5                     Sustainability requires international institutional reforms . . . 8

                                                       News, briefings, online Update editions and more at: www.brettonwoodsproject.org
BRETTON WOODS UPDATE                                                                                                                NUMBER 27 – MARCH/APRIL 2002



Engineers, campaigners condemn Bank                                                                                                        Patrick McCully,Campaigns Direc-
                                                                                                                                        tor of the International Rivers Net-
                                                                                                                                        work,commented that “the Bank has

for Dams Commission follow-up                                                                                                           learned little if anything from its his-
                                                                                                                                        tory of supporting destructive,white
                                                                                                                                        elephant water megaprojects. The
                                                                                                                                        draft strategy seriously misrepre-
The World Bank was applauded by a wide range of organisations for its role in helping establish the World
                                                                                                                                        sents the recommendations of the
Commission on Dams (WCD). This was a precedent-setting body containing fierce critics of dams and                                        World Commission on Dams”. It
                                                                                                                                        makes no mention of the WCD’s criti-
representatives of companies which build them. Now all sides are condemning the Bank’s failure to implement
                                                                                                                                        cism of the Bank for failing to ensure
the Commission’s recommendations for new approaches to water and energy planning.                                                       compliance with its own policies and
                                                                                                                                        legal agreements; weak or non-exis-
Both the Engineering News Record, a          never been implemented in a major                directors rejected a preliminary Bank     tent post-construction project evalu-
trade journal, and World Rivers Review,      dam project”.                                    management action plan for imple-         ation and monitoring; and failure to
an NGO campaign magazine, have                   An article by Patrick McCully in             menting the WCD, saying that it was       consider a range of possible options.
recently criticised the Bank.In an edi-      World Rivers Review (December 2001)              too vague and lacked detail. Bank            A new draft of the strategy is due
torial on 21 January, ENR condemned          makes similar points.McCully reviews             Board members also harshly criti-         to be released on the Bank’s website
the Bank’s “deplorable hypocrisy” for        the actions of various donors and                cised the water strategy currently        for comments in late March. John
approving the Bujagali dam in                companies to take the WCD’s guide-               being produced by the World Bank.         Briscoe has said that a consultation
Uganda just months after the WCD             lines seriously. He says that despite            They argued that an initial draft of      with NGOs on the strategy will take
report came out. ENR points out that         the Bank President’s endorsement of              the strategy failed to take adequate      place in Washington in May.          ®
the WCD was a bold attempt to “find a        the report at its launch,there has been          account of the WCD’s findings and
way through the conflict that has            “a tug-of-war between some Bank staff            will not help the poor.
                                                                                                                                        WCD
halted dam construction in many              members who oppose incorporating                    A leaked memo from Bank execu-
                                                                                                                                        ∑ www.brettonwoodsproject.org/
developed countries”. If the study’s         WCD guidelines into Bank policy, and             tive directors complained that the
                                                                                                                                          update/20
own sponsors refuse to be guided by          other staff members, executive direc-            plans developed by World Bank man-
                                                                                                                                        ∑ www.enr.com/new/
them, “all we can anticipate is con-         tors and members of civil society who            agement “appear aimed at boosting
                                                                                                                                          editorials012102.asp
tinued sclerosis in dambuilding.”            believe the Bank has an obligation to            lending volumes rather than finding
                                                                                                                                        ∑ www.irn.org/pubs/wrr/issues
The commission’s report was greeted          implement the guidelines”.                       the best way to help meet crucial
                                                                                                                                          /WRR.V16.N6.pdf
by cautious optimism by companies,               The World Bank’s senior water advi-          development needs”. The directors
                                                                                                                                        ∑ www.unep-dams.org
governments and other organiza-              sor, John Briscoe, initially stated that         also commented, in line with many
tions. Yet in the first test of its guide-   the WCD guidelines would only be a               NGOs,that “much more could be done        Water Resources Strategy
lines, the World Bank has decided to         non-mandatory “reference point”.                 to better manage existing water infra-    Galina Arkuzinski, World Bank
back the Bujagali Dam even though it             The Bank’s resettlement policy               structure and demand-side issues”.        µ garkusinski@worldbank.org
has acknowledged that the project is         was recently revised without taking                 One executive director’s office also
                                                                                                                                        Water Resources Sector Strategy
“unacceptable from environmental             into account the WCD’s extensive                 criticised the draft for lacking a
                                                                                                                                        ∑ www.worldbank.org/water
and social perspectives.” The engi-          work on this issue. The new policy               roadmap for action and indicators for
neering magazine compares the                disadvantages indigenous peoples,                monitoring; omitting gender issues;       Still fixated with privatisation: A Critical
Bank’s actions to those of a teenager        women and ethnic minorities who                  exaggerating the success of water         Review of the World Bank’s Water Resources
arguing that it is acceptable because        lack formal legal rights to land and             users’ associations; having inade-        Sector Strategy, Public Services International
everybody does it,or as the Bank puts        had explicit protection under the                quate coverage of the link between        Research Unit, December 2001
it “to the best of its knowledge [the]       Bank’s previous policy.                          water and health; and exaggerating        ∑ www.psiru.org/reports/
process proposed by the WCD has                  However, World Bank executive                the benefits of privatisation.                 2001-12-W-WBstrat.doc

ß ß
Ghanaians contest Bank-backed                                                                 Company seeks compensation after
water privatisation (continued from page 1)                                                   Bolivians force re-nationalisation
Community Water Supply Agency                alternative options for improving                A case has been filed by US-based         rates. Families suddenly faced
which works in rural areas.                  Ghana’s water systems.         ®                 multinational Bechtel seeking US$25       monthly bills of more than US$20 to
   The Coalition Against Privatisa-                                                           million compensation from the Boli-       be paid from earnings of less than
tion concludes, however, that the                                                             vian government for breach of con-        $100 a month. A range of organisa-
                                             Related Update article
proposed water privatisation in                                                               tract. The case was accepted in Feb-      tions mobilised against the privatisa-
                                             ∑ www.brettonwoodsproject.org/
Ghana is absolutely not in the inter-                                                         ruary by the International Centre for     tion,forcing the Bolivian government
                                                topic/privatesector/
est of their country,let alone its poor-                                                      the Settlement of Investment Dis-         to declare martial law in April 2000.
                                                p23waterpriv.html
est citizens. It argues that it is “the                                                       putes (ICSID)—a little-known arm of       Then,following the death of a protes-
result of very deft political manoeu-        Why we oppose water privatisation (ISODEC)       the World Bank Group.                     tor, the government agreed to re-
vrings by a consortium of donor              ∑ www.brettonwoodsproject.org/                      In January 2000, in Cochabamba         nationalise the water system and
countries committed to promoting               topic/privatesector/                           there was a general strike provoked       reduce water rates. By the end of that
the interests of their own corporate           Ghanawater.doc                                 by opposition to the World Bank’s         year, the Government of Bolivia for-
citizens”. It does not oppose the                                                             push for privatisation of water. The      mally cancelled Aguas Del Tunari’s 40-
                                             Coalition Against Privatisation
involvement of the private sector in                                                          unrest targeted Aguas Del Tunari, a       year contract. Bolivian organisations
                                             ∑ www.isodec.org.gh/isodec/
the delivery of specific services, such                                                       subsidiary of Bechtel which had           are looking for international support
                                                campaigns.htm
as tariff collection or pipe-laying. It                                                       been awarded the contract to provide      as they prepare to campaign against
does, however oppose “the deliber-           Christian Aid report                             water in Cochabamba,Bolivia’s third       the role of ICSID,which is being asked
ate crafting of the process to privi-        ∑ www.christian-aid.org.uk/                      largest city.                             to rule that the government of one of
lege only foreign companies,passing             indepth/0111trme/master2.pdf                     In 1999, following years of pres-      the poorest countries in the world
monopoly control of all urban sys-                                                            sure,the Bolivian government agreed       must pay compensation to one of the
                                             GCI paper
tems to them in very long lease con-                                                          to privatise the Cochabamba water         richest multinational companies. ®
                                             ∑ www.challengeglobalisation.org/
tracts of up to twenty-five years”.It is                                                      system.A subsidiary of utilities giant
                                                html/otherpubs/Ghana_Water.pdf                                                          ∑ www.democracyctr.org/bechtel/
calling for the release of all docu-                                                          Bechtel was given a 40-year lease.
mentation relating to the proposed           Write to the IMF                                 Within weeks of taking over the water     ∑ www.worldbank.org/icsid/cases/
privatisation and for a debate about         ∑ www.waterobservatory.org                       supply, the company tripled water           pending.htm

                                                                                          2
BRETTON WOODS UPDATE                                                                                                              NUMBER 27 – MARCH/APRIL 2002


                                                                                          ß
NGOs continue                                                                             No investigation into
challenge to Bank on                                                                      Peru goldmine corruption
                                                                                          Nine months after a joint inquiry           Joe O’Keefe—IFC’s corporate relations

oil, gas and mining                                                                       was demanded by a coalition of Peru-
                                                                                          vian NGOs and US NGO Project Under-
                                                                                          ground, the World Bank Group’s pri-
                                                                                                                                      manager—saying that after they
                                                                                                                                      reviewed the videotape and other
                                                                                                                                      materials surrounding the affair,
                                                                                          vate sector lending arm, the IFC, has       they “concluded that there is insuffi-
Following the concerns raised about the Extractive Industries                             refused to investigate allegations of       cient evidence to continue investi-
                                                                                          corruption involving one of its part-       gating this allegation”.Commenting
Review (EIR) process, its terms of reference have been revised.                           ners—US based Newmont Mining                on the IFC letter,Erica Etelson,Project
NGOs consider that important procedural changes have been                                 Corporation. The dispute concerned          Underground Staff Attorney, said,
                                                                                          ownership of the controversial Min-         “the videotape of Montesinos was a
made but that problems remain. NGOs’ determination not                                    era Yanacocha gold mine in the              smoking gun. What more evidence
                                                                                          northern highlands of Peru,which is         do they need before they’re willing to
simply to rely on this review process to change the Bank’s                                the largest gold producer in Latin          investigate?”
                                                                                          America.The project was a joint ven-           Two further complaints about
approach to oil, gas and mining is shown by a new campaign                                ture between the IFC, Newmont and           Yanacocha have resulted in the World
                                                                                          a Peruvian company Buenaventura.            Bank’s Compliance Advisor/Ombud-
launched in France.                                                                          Newmont had been in a major              sman (CAO) establishing a dialogue
                                                                                          legal dispute with the Bureau de            process with the companies, NGOs,
Emil Salim,the eminent person lead-         disappointed by the failure to imple-         Recherches Géologiques et Minières          municipal bodies and leaders,
ing the Bank’s review,wrote to World        ment its conclusions (see, page 2).           (BRGM), a state-owned French com-           provincial leaders, government
Bank President James Wolfensohn             It is still unclear which NGOs will           pany, over ownership of the mine.           agencies and others in the Cajamarca
in January saying he had concluded          engage significantly in the EIRprocess.       Although the case was resolved in           area to resolve issues. These include
that “a number of fundamental               They will have to decide quickly, as          1998, it attracted media attention          a mercury spill in Choropampa in
changes are needed in the way we are        the first regional consultation is            again in January 2001, when a video-        June 2000 and more general concerns
approaching this”.Salim argued that         scheduled for April 16-19 in Brazil.          tape released to the public showed          about the environmental,social,and
he did not have sufficient time,inde-           NGOs throughout the world have            ex-Peruvian President Fujimori’s spy        economic impacts of Minera Yana-
pendence from the Bank or the full          been campaigning strongly against             chief Vladimiro Montesinos pressur-         cocha’s operations.                 ®
trust and cooperation of major stake-       World Bank support for extractive             ing a Peruvian Supreme Court judge
holders—all of which he felt were           industries. Following other initia-           that a vote in favour of Newmont
                                                                                                                                      IPS report
essential for the review’s success.         tives, such as a call by Friends of the       was needed due to US diplomatic
                                                                                                                                      ∑ www.oneworld.org/ips2/mar02/
    The Bank accepted changes to the        Earth International for a phase out of        pressure.Peru’s Supreme Court ruled
                                                                                                                                          02_33_005.html
review’s timeframe, and to the loca-        IFI funding for fossil fuel and mining        that BRGM should sell its shares to
tion of the EIR secretariat.The latter is   projects, French organisations have           Newmont.                                    Drillbits & Tailings articles
now based in Jakarta,although some          launched a new campaign denounc-                 On 30th January 2002, Project            ∑ www.moles.org/ProjectUnder-
staff will remain in Washington. The        ing the social and environmental              Underground received a letter from              ground/drillbits/7_02/3.html
EIR consultation report is now due          impacts of World Bank-funded oil,
in June 2003. However despite time          gas and mining projects. They com-             Latest news, in-depth analysis, back issues of the Update
frame modification the EIR’s budget         plain that extractive industries create
has not been increased. In his reply        little economic growth and fuel                   and much more at: www.brettonwoodsproject.org
                                                                                          ß
to Emil Salim, James Wolfensohn             human rights violations,armed con-
wrote that “the Board of the World          flicts, displacements, deforestation,
Bank was adamant that the budget            biodiversity destruction and climate
for the EIR should not be extended          change. “Ca carbure au Nord, ca
                                                                                          World Bank + IMF = global deforestation
beyond the amount already set               chauffe au Sud!” is run by Agir ici,
aside”. Salim has complained that           AITEC and CRID,together with Friends          The World Bank is considering lifting       Lands Alliance examines the impact
half the $3 million budget has been         of the Earth France, Greenpeace and           its ban on direct financing of logging      of IMF policies on forests around the
pre-allocated for World Bank staff to       the French Climate Action Network,            in primary moist tropical forests,          world. The report accuses the IMF of
attend meetings and for the EIR sec-        and is supported by 34 other groups.          encapsulated in its 1991 Forest Policy.     supporting deforestation in 15 coun-
retariat.Nonetheless Emil Salim now         It asks French decision-makers and            A draft strategy offering voluntary         tries, among them Brazil, Indonesia,
considers that the changes made,            the Bank’s President to ensure that           guidelines was put on the Bank’s            Russia, Cameroon and Chile. The
reflected in new terms of reference,        the World Bank does not back any              website in June 2001. It claimed that       Fund has prioritised economic liber-
allow the review to be carried out.         oil, gas and mining projects that             regional consultations carried out in       alisation over key social and envi-
    NGOs that have been following the       would endanger sensitive areas and            2000 revealed broad support for the         ronmental objectives. With the
process closely such as the Center for      go against local communities’                 Bank to “re-engage” in the forest sec-      pending release of the OP, the World
International Environmental Law,            wishes. In practice it would exclude          tor. NGOs have contested this claim         Rainforest Movement is calling on
Bank Information Center, Friends of         projects from indigenous peoples’             as they wait to see a draft of the Bank’s   NGOs to press for changes which will
the Earth-US, Institute for Policy          territories, biodiversity ‘hotspots’,         much-delayed new Operational Pol-           “secure the rights of forest dwellers;
Studies and Oxfam America,consider          pristine marine areas, and primary            icy (OP). The OP will provide manda-        ensure that non-forest sector lend-
it “flawed, but potentially worth-          forests. The campaign also asks the           tory instructions for Bank staff.           ing doesn’t damage forests and for-
while”.They argue that the process is       Bank to take full responsibility for              A recent joint statement from           est peoples; and proscribe financing
still “too rushed”,the budget “inade-       damages already inflicted on popu-            nine African NGO representatives            in old growth forest.”             ®
quate”, and that participation of           lations and their environment, to             praised the Bank for its 1991 Forest
Bank staff in consultations will place      make reparations, and to shift its            Policy and stated that local commu-         Korinna Horta, Environmental Defense
the Bank in too influential a posi-         financing towards renewable forms             nities often get no benefits from pri-      µ khorta@environmentaldefense.org
tion. In addition they are not clear        of energy favouring the needs of              vate logging operations. If the ban is
                                                                                                                                      American Lands Alliance report
what impact the EIR consultations           poorer people.                       ®        lifted they argue that large-scale log-
                                                                                                                                      ∑ www.americanlands.org/
and report will have on World Bank                                                        ging operations would flourish
                                                                                                                                        imf_report.htm
operations.NGOs taking part in a sim-       ∑ www.eireview.org/                           which benefit only elites and hasten
ilar consultation, the World Com-           ∑ www.globenet.org/ifi                         further destruction of natural forests.     World Rainforest Movement
mission on Dams, have been highly           µ ifi@agirici.org                                  A new report from the American          ∑ www.wrm.org.uy/actors/WB

                                                                                      3
BRETTON WOODS UPDATE                                                                                                                                  NUMBER 27 – MARCH/APRIL 2002


                                                                                                       impact of SAPs in their countries.               ß
Limitations of Asian                                                                                      In Bangladesh, at a national con-
                                                                                                       vention on PRS on March 9,organized
                                                                                                       by the People’s Empowerment Trust
                                                                                                                                                        Empowerment agenda
                                                                                                                                                        “a special challenge”
PRSPs revealed                                                                                         (PET) and Action Aid Bangladesh,
                                                                                                       participants condemned the lack of
                                                                                                       transparency in the PRS drafting
                                                                                                                                                        A new report from the World Bank
                                                                                                                                                        sets out how it is responding to its
                                                                                                       process. Chairperson of PET, econo-              Poverty World Development Report.
Asian NGOs have recently commented on the problems                                                     mist MM Akash, said that the time-               It claims that the WDR “is changing
they face with PRSP processes in their region.                                                         line set by the WB and IMF for peo-              the way the Bank and other develop-
                                                                                                       ple’s participation in the process               ment organisations do business”. It
Focus on the Global South has                      drafting process. While prominent                   threatened to lead to the “abandon-              recognises, however, that the most
issued a report assessing Poverty                  NGOs were consulted, a failure to                   ment of the very principles of poverty           innovative part of the WDR on
Reduction Strategy processes in Lao                translate the papers into either                    reduction”.                                      empowerment, “poses special chal-
PDR, Cambodia and Vietnam. Drawn                   Khmer or Lao marginalised the                          A declaration drawn up by partic-             lenges for the Bank”. Many outside
from interviews with NGOs and WB                   majority of civil society actors.Focus              ipants called on the WB and IMF to               the Bank, while welcoming its new
missions, the report concludes that                researchers believe that the Bank is                remove PRSP conditionality for                   recognition of the importance of
the interim PRSPs produced for these               repeating errors of the past,as policy              receipt of further funds, and develop            political power, question whether it
countries are not about poverty erad-              recommendations are similar to pre-                 a transparent ‘route map’ to guide               is legitimate for it to get involved in
ication.While Vietnam has been bet-                vious structural adjustment mea-                    the process.                       ®             ‘empowering’ people and whether it
ter able to direct the process, in both            sures.The report reveals that none of                                                                is really prepared to tackle in-country
Lao PDR and Cambodia interim PRSPs                 the three governments had been                                                                       vested interests.
conflict with existing medium-term                 informed of the results of the Struc-               ∑ www.focusweb.org/publications/                     The Bank’s new report says that it
development plans. The report criti-               tural Adjustment Participatory                        Research%20and%20Policy%20pa                   is interpreting empowerment partly
cises the level of participation in the            Review Initiative assessments of the                  pers/2002/PRSP.pdf                             as a continuation of its efforts to

ß
                                                                                                                                                        increase participation in Bank opera-
                                                                                                                                                        tions. It intends to expand support
                                                                                                                                                        for systems of public expenditure
WB study questions breadth and impact of PRSP participation                                                                                             management and monitoring and
                                                                                                                                                        “efforts to enhance citizens’ access to
A World Bank study of participation                assuming an increasingly important                  tional Development in a paper on the             information”. It also plans further
in PRSPs has set out a number of crit-             role,however non-conventional NGOs,                 PRSP process. DFID asserts that “the             work to support countries’ decentral-
icisms. The study, by the Participa-               such as community groups and                        quality of the outputs produced                  isation efforts and to explore ways to
tion Team of the Bank’s Social Devel-              women’s organisations, are given                    through consultation processes,and               expand support for poor peoples’
opmentDepartment,brings together                   little attention.Other weaknesses lie               their consequent impact on policy-               organisations.The latter is likely to be
external assessments with an in-                   in poor quality data and a lack of gen-             making,is a real concern.” As a result,          especially delicate, as many mass
house review of PRSPs in-progress                  der analysis.The authors of the review              the “Bank has not always made a                  organisations will not be keen to be
and completed.                                     admit,however,that their own analy-                 positive contribution to maximising              supported by an institution that they
    The report opens with a synthesis              sis of participation in PRSPs is “static,           the impact of consultation and par-              regard as hostile to their objectives.
of the views of a number of Northern               document-centric and generally not                  ticipation on PRS policy.”                           The Bank’s approach to empow-
NGOs, national and UN development                  informed by accounts from the site.”                    Pointing to ways forward, the                erment will be tested not only in its
agencies.Of the type of participation                  The range and composition of CSO                Bank study highlights the need for               ongoing approaches to PRSPs and
generated, the authors state that                  representation in completed PRSPs                   participation after the PRSP has been            projects but also in the development
“almost all countries are on the lower             has been deficient.It was not clear to              completed.It suggests joint learning             of other strategies. In the coming
half of the spectrum”; information-                the authors to what extent the views                and assessment across countries,                 months the Bank is drafting a Social
sharing and consultation is largely                gathered had influenced the content                 greater focus on the participation of            Sector Strategy and a methodology
confined to capital cities.The process             of the final Papers. They concluded                 local government; and the creation               for institutional assessment,among
is driven by finance and planning                  that:“macroeconomic issues and the                  of a new fund to deepen and improve              others. Bank-watchers will examine
ministries, with other ministries                  broad development model remain                      the quality of participation.       ®            their coherence with the WDR.        ®
such as health and education playing               unchallenged.” This assessment
minor roles.Under CSO participation,               coincides with the views offered by                 ∑ www.worldbank.org/participation/               ∑ www.worldbank.org/poverty/library/
the authors believe that NGOs are                  the UK’s Department For Interna-                      retro.htm                                        progr/2000-01/execsum.htm


New report on                                      Letter on PRSP process                              New Oxfam guide                                  Making Services Work
Bolivian PRSP                                      complaints                                          to PRSPs                                         for Poor People
Christian Aid, in collaboration with a number      A number of civil society organisations             Oxfam International has published a guide        The World Bank’s World Development
of Bolivian civil society groups, has produced a   involved in the official review of the Poverty       for groups wanting to do work around             Report for 2003/4 will cover the sensitive
new report examining the quality of participa-     Reduction Strategy process, wrote a joint           Poverty Reduction Strategy processes in          issues of service delivery. The World Bank
tion in the Bolivian Poverty Reduction             letter to the IMF and the Bank in late              their countries. It gives tips on general        has long been criticised for its approach to
Strategy process. It points out that Bolivia has   January. It urges the presentation of               advocacy approaches, how to understand           water, health, education and similar
long been viewed as a model structural             genuine choices for Macroeconomic and               PRSP processes, as well as a short section       services, although it claims to have made
adjustment performer, but that inequality has      Structural Policy Design, the need for              on the likely consequences of certain eco-       changes in recent years—for example
become increasingly severe. It finds that civil     impact analysis, and a process to record the        nomic policies. The material aims to help        outlawing user fees for education.
society’s participation in Bolivia’s PRSP was “a   extent and quality of participation by civil        organisations influence the content of                This Report will examine these services
mixed experience” which has been celebrated        society groups.                                     Poverty Reduction Strategies, not just be        in the context of the Millennium Develop-
somewhat simplistically by the international                                                           passive participants in various meetings. It     ment Goals. The report’s lead author is
community, with little attention being given       Joint letter                                        particularly emphasises the involvement of       Shanta Devarajan, a senior World Bank
to some of the harsher lessons and mistakes.       ∑ www.eurodad.org/2poverty/                         women and other marginalised groups.             researcher.
                                                       indexpoverty1.htm
Participating in Dialogue?: The Estrategia                                                             ∑ www.oxfam.org.uk/policy/                       µ sdevarajan@worldbank.org
                                                   Official and NGO submissions to the PRSP
Boliviana de Reducción de la Pobreza                                                                     papers/prsguide/prsguide.html                  ∑ www.worldbank.org/wdr
                                                   review
Melanie Gower
                                                   ∑ www.worldbank.org/poverty/
µ mgower@christian-aid.org
                                                       strategies/review/extrev.htm
                                                                                                   4
BRETTON WOODS UPDATE                                                                                                                              NUMBER 27 – MARCH/APRIL 2002


                                                                                                                                                    ß
Trade policy training challenged,                                                                                                                   IMF “fun” with
but donors commit more funds                                                                                                                        Argentina
                                                                                                                                                    IMF lending to Argentina could
                                                                                                                                                    resume in the coming months under
The heads of six major international institutions met in late February to discuss their                                                             specific conditions.After completing
                                                                                                                                                    a ten-day mission in Argentina,
roles in trade policy formulation. They agreed to do more to help poorer countries                                                                  recently appointed IMF Director for
                                                                                                                                                    Special Operations Anoop Singh said
prioritise trade reform, and improve their ability to negotiate in international fora.                                                              “approval of the 2002 budget by Con-
                                                                                                                                                    gress,as well as the recent agreement
Shortly after this, a number of non-government organisations released a statement                                                                   between the Government and
                                                                                                                                                    Provincial Governors, are important
raising concerns about official approaches to trade policy capacity building.                                                                        steps in this direction”. However the
                                                                                                                                                    Argentinian government will have to
                                                                                                                                                    revise its programme as the IMF
                                                                                                                                                    thinks its inflation and growth fore-
The top men from the World Bank,               are then expected to be integrated                  areas (including investment,compe-               casts were too optimistic. The 2002
WTO, IMF, UNCTAD, UNDP and ITC                 into Poverty Reduction Strategy                     tition and government procure-                   budget plans further cuts in civil ser-
attended the meeting at the World              Papers (PRSPs) and tabled at donor                  ment). It continues that “a large part           vants’ salaries and increases in
Bank headquarters on 26 February.              coordination meetings. The paper                    of the Plan involves the Integrated              export taxes to raise revenue from a
The meeting discussed the Inte-                also urges “better coordination                     Framework for Trade Related Tech-                predicted export surge owing to cur-
grated Framework (IF)—an initiative            between national IF Steering Com-                   nical Assistance (IF), a programme               rency devaluation. President
to enable these agencies to collabo-           mittees and the PRSP Committees”.                   which has already been tried and                 Duhalde met Horst Köhler in Mon-
rate to help governments in poorer                To encourage division of labour                  failed”. The statement condemned                 terrey during the Conference on
countries understand the increas-              among the agencies involved in trade                the allocation of responsibilities in            Financing for Development.
ingly complex trade policy areas.              policy capacity building, a database                the revamped IF as “unbalanced”,                    Singh’s control of Argentinian
Their joint communique urged fur-              of who is doing what and a new Inte-                saying that the major role being allo-           negotiations may indicate dissatis-
ther opening of developed country              grated Framework website are being                  cated to the World Bank was “a cause             faction with the IMF’s Western Hemi-
markets for products originating               developed.                                          for concern”. It urged mechanisms                sphere Department. But Thomas
from the poorest countries but also               Twenty civil society organisa-                   which give governments “the flexi-               Dawson, External Relations Director
for poorer countries to do more                tions—including major international                 bility to choose the agency and the              of the Fund, gave another explana-
themselves. “Domestic regulatory               organisations and networks such as                  form of assistance that they feel to be          tion of the Fund’s approach. When
reform and coherent macroeco-                  DAWN, International South Group                     most appropriate”.                               asked by a journalist in January
nomic and trade policies are neces-            Network and Public Services Inter-                     Despite these concerns, govern-               about the lessons learned from the
sary. It is essential that trade priority      national signed a statement which                   ments agreed to commit an extra $18              Argentinian crisis, he candidly
areas of action, including trade-              flagged concerns about official                     million at a meeting in Switzerland              explained that one of his ambitions
related technical assistance, are              approaches to capacity building. It                 on 12 March. A trade official at the             in his job is “to make new mistakes,
reflected within development plans             agreed that “the objective of building              meeting commented:“money is now                  not old mistakes”.He even predicted
and strategies for poverty reduction”.         capacity of all WTOmembers to define                not the issue. It’s finding the people           new IMF failures: “I think we have
   The joint statement went on to              and act on trade policies that are in               and spending it wisely that will be              learned some of the lessons of the
“reaffirm the lead role of the World           their best national interest is widely              the problem.”                        ®           past, but that is not to say that mis-
Bank in supporting the process to              shared”. However, “important ques-                                                                   takes are not made again in the
mainstream trade into development              tions remain about how capacity                                                                      future. And that is life. That is eco-
                                                                                                   ∑ www.brettonwoodsproject.org/
plans and strategies for poverty               building will be delivered and by                                                                    nomics.And that is why it is so much
                                                                                                     topic/knowledgebank/
reduction”. The Bank is leading a              whom”. The statement complained                                                                      fun”.Most Argentinians do not share
                                                                                                     k27tradestat.html
process of conducting “Diagnostic              that the technical assistance plan                                                                   his sense of humour.                ®
Trade Integration Studies” to assess           had largely been drawn up by the WTO                The Bretton Woods Project is preparing a
countries’ needs for technical assis-          Secretariat and prioritises the new                 briefing on the World Bank’s role in trade-       ∑ www.imf.org/external/np/tr/
tance. The results of these studies            and controversial trade negotiation                 related technical assistance.                      2002/tr020117.htm


Nigeria sends                                  IMF evaluator                                       IFC reviews social and                           Bank Board schedule
IMF away                                       clarifies position                                   environmental policies                           announced
The Nigerian government withdrew from          Following the article in Bretton Woods              The policies that govern the International       The World Bank has decided to post its
an IMF-monitored programme in early            Update 26 on the announcement by the                Finance Corporation’s approach to core           schedule of what will be discussed at Board
March. From July 2000 to October 2001          IMF Evaluation Office of its work pro-               social and environmental issues are              meetings. The Bank has previously
Nigeria had been involved in a Standby         gramme, its Director sent a letter clarifying       currently under review. Safeguard policies       maintained that this information must be
arrangement with the Fund. The country         his position. The article complained that           include Environment Assessment, Forestry         kept secret.
has recently faced “challenges” that caused    the draft evaluation programme submitted            and Indigenous Peoples. As the private               The Bank has not, however, gone the
the government to fall short of its targets.   to the public for comment was redundant             sector arm of the World Bank indirectly sets     next step to make public the votes and
It decided not to continue with arrange-       as another version was circulated to Board          standards for private companies it is            statements of Board members. A recent
ments “where only narrowly defined              members at the same time. The EVO                   important to ensure that their standards         briefing from Bank Information Center
macroeconomic targets come into play”          argues that “circulation of every interim           are high. Comments must be submitted by          comments that: “The Board has not yet
but to develop a home-grown programme          product is neither feasible nor necessary.          the end of May to inform a draft report          acknowledged that the public has a right to
to identify “prudent economic objectives       We did not take a final decision until all           which should be ready by early June. A final      know how they are being represented
that the people of Nigeria can support”. In    comments within the extended deadline               report is due by October.                        within the Bank”.
July 2000 the Nigerian House of Represen-      had been received”.
                                                                                                   Graham Saul, Bank Information Center             ∑ www.worldbank.org/about/
tatives opposed the Standby agreement.
                                                                                                   µ gsaul@bicusa.org                                 organization/voting/
                                               Full letter from the IMF’s IEO
                                                                                                   ∑ www.bicusa.org
∑ www.imf.org/external/np/ms/                  ∑www.brettonwoodsproject.org/                                                                        ∑ www.bicusa.org/mdbs/wbg/Info
  2002/030602.htm                                  topic/reform/r27ieoltr.html                                                                        %20Disclosure/infodiscupdate.htm

                                                                                               5
BRETTON WOODS UPDATE                                                                                                                                NUMBER 27 – MARCH/APRIL 2002



Parliamentarians gear up to                                                                                                                           policies and their impact;
                                                                                                                                                      • replacing conditionality with negotia-

increase scrutiny of World Bank                                                                                                                       tions with recipient countries;
                                                                                                                                                      • the possibility of filing complaints to an
                                                                                                                                                      arbitration court against violation of fun-
A number of efforts are under way to increase the ability of elected representatives to monitor the World Bank.                                       damental rights by international financial
                                                                                                                                                      institutions;
The World Bank’s Parliamentary Network is gearing up for its third annual conference while other parliamentary
                                                                                                                                                      • the need for ex-ante impact studies
coordination initiatives are moving forward, as proposed by a French report and the World Social Forum.
                                                                                                                                                      involving all stakeholders.
The third annual conference of the                                                                                                                       Yves Tavernier refers to the US
Parliamentary Network on the World
                                                     “We must do our controlling task on the basis of too little                                      Congress as an example of parlia-
Bank will take place in Berne,Switzer-             information. Subsequently, the task of parliamentarians in                                         mentary influence on a country’s
land from 9-11 May. The Network is                 relation to the International Financial Institutions is much                                       policy options within the IMF and the
attempting to enter a new phase,par-                too haphazard. Too haphazard, too reactive and too small.”                                        World Bank. Unlike the limited
ticularly in terms of independence                                                                                                                    efforts of most European parlia-
and visibility. Bert Koenders, Dutch                        Bert Koenders, Dutch MP, Chair of the Parliamentary Network on the World Bank             ments,Congress closely watches and
MP and Chair of the Network, sees                                                                                                                     influences US multilateral policies
the Network as a way for parliamen-             will encourage systematic and                        now gathers every year during the                using both legislation and approval
tarians to execute their task of scru-          timely information on World Bank                     World Social Forum. Last year it                 of financial contributions.
tinising the World Bank. Numerous               loans and projects reaching borrow-                  called for “profound reform of the                  While NGOs have filled a space left
MPs feel they should not be left out            ing countries’ parliaments.                          WTO and international financial insti-           open by elected representatives in
of the debate on global governance,                While ambitions for the network                   tutions” and initiated a global par-             the monitoring of international insti-
while street movements, NGOs and                are high, it remains to be seen                      liamentary network which now has                 tutions, this should not be seen as a
global institutions such as the World           whether it will be able to achieve true              more than 1000 members.                          competition for power or legitimacy.
Bank and the IMF put across their               independence from the World Bank.                       In a recent report to the French              On the contrary,there is a strong case
views. Koenders argues that the                 Though the Dutch government has                      Commission des Finances, MP Yves                 for cooperation between parliamen-
“democratic deficit in fact does exist.         provided most of the funds,the World                 Tavernier assesses the state of parlia-          tarians and NGOs, especially as MPs
The prime reason is that parliamen-             Bank currently hosts the secretariat                 mentary scrutiny of the World Bank               complain about the lack of time and
tarians lack the information to exe-            and administers the Network’s bud-                   in different countries and urges his             information. Indeed most of Tav-
cute their controlling task.The mate-           get. To achieve its mission, the Net-                French colleagues to create a perma-             ernier’s comments and propositions
rial is complex and parliamentarians            work now wants to develop its activ-                 nent parliamentary delegation to                 on the institutions match what
over the world have one thing in                ities to include more information                    scrutinise the Bank. He says this is             French NGOs such as Agir ici, AITEC
common: they have very little time”.            exchange as well as field visits.These               needed partly to counter the influ-              and CRID have been advocating for
   Information is certainly vital,espe-         visits, focussing particularly on                    ence of NGOs who “in every speech,in             years.US NGOs also play a decisive role
cially since the World Bank sees itself         PRSPs, will include trips to Uganda                  every press article, are granted a               in educating and alerting Congress
as a “knowledge bank” and as such               and Benin this April.They may allow                  superior form of legitimacy [to par-             members on complex World Bank
produces countless reports and dis-             the Network to recruit new members,                  liamentarians]”. The 2000 report of              issues. NGOs can be a good source of
cussion papers.What MPs need most               as it is currently European-domi-                    the Commission des Finances criti-               independent information and analy-
to control their government’s rela-             nated. The Network has also partici-                 cised the IMF and the World Bank and             sis for MPs wanting to influence the
tions with the international finan-             pated in the Financing for Develop-                  called for permanent parliamentary               international agenda and hold their
cial institutions is strategic informa-         ment conference in Monterrey, and                    monitoring. As National Assembly                 governments accountable.            ®
tion on decision-making processes.              will engage in preparations for the                  president Raymond Forni endorsed
                                                                                                                                                      ∑ www.worldbank.org/pnowb
They are often denied timely access to          World Summit on Sustainable Devel-                   this call, the 2001 report makes con-
such information, especially in bor-            opment in Johannesburg in August.                    crete propositions to establish a per-           ∑ www.forumparlamentarmundial.
rowing countries. Indeed the World                 While the World Bank Network                      manent delegation that would                       rs.gov.br/ingles/welcome.php
Bank Parliamentary Network wants to             says it is not establishing “another                 address questions such as:
                                                                                                                                                      ∑ www.assemblee-nationale.fr/
help push for donor countries’repre-            circle of decision-making”, it is
                                                                                                     • the need for transparency and control of         rap-info/i3478.asp
sentatives in the Bank to be inter-             unclear how it will coordinate with
                                                                                                     the institutions and member governments;
viewed by parliamentarians on World             existing networks.These include the                                                                   ∑ www.globenet.org/ifi/dossiers/
Bank policies.Similarly,the Network             World Parliamentary Forum that                       • public, independent evaluation of IFI            controle/france/avis-rap2001.htm


Bujagali dam affected                           World Bank                                           Bank downplays         Citizens’ Guide to World
by Enron-fallout                                to back Iran dam                                     Lesotho dam corruption Commission on Dams
U.S. power company AES Corp. has been           The World Bank plans to back a dam in                A World Bank investigation has concluded         International Rivers Network has published
forced to delay building the $550 million       Mazandaran province, Iran. The Bank will             that there is insufficient evidence to disbar     a new guide to help people use the World
Bujagali dam, Uganda, because of a              provide a loan of 80 million dollars for the         from future Bank contracts three interna-        Commission on Dams report to stop
financing shortfall. It has failed to raise      ‘Alborz’ dam which is estimated to cost a            tional dambuilding companies which have          destructive development projects and
extra cash from export credit agencies to       total of 130 million. The dam on the Babol           been charged with corruption by the              promote better alternatives. It provides
match that from the World Bank, possibly        river is intended to irrigate 50,000 hectares        Lesotho High Court. This despite finding          background on the WCD, a detailed
because of campaigning by NGOs opposed          of farmland when it becomes operational.             that the (unnamed) companies had                 summary of its findings and recommenda-
to the dam. AES’s shareprice has fallen 90                                                           channelled funds through a middleman             tions, and responses from NGOs,
per cent since this time last year because of   Source, Islamic Republic News Agency,                who has been found guilty of bribing             institutions and governments to the report.
uncertainties following the Enron crash.        March 4                                              Lesotho officials. Environmental Defense              The guide is available to order or
    The IFC has also backed AES-sponsored       ∑ www.irna.com/newshtm/eng/                          Fund argues that the Bank’s decision was         download through the IRN website.
projects in Pakistan, Mexico, Georgia,             13195709.htm                                      timed to influence the outcome of the             Spanish, Thai, Japanese and Mandarin
Panama and Bangladesh.                                                                               judgement from the High Court, throwing          translations available soon.
                                                                                                     into question the Bank’s commitment to
∑ www.irn.org/programs/bujagali/                                                                     fighting corruption.                              ∑ www.irn.org/wcd
                                                                                                                                                      µ swong@irn.org
                                                                                                     ∑ www.irn.org/programs/lesotho/


                                                                                                 6
BRETTON WOODS UPDATE                                                                                                           NUMBER 27 – MARCH/APRIL 2002



Wolfensohn appoints poverty results                                                                                                Van Wicklen. Having worked with
                                                                                                                                   the Department for seven years, Van
                                                                                                                                   Wicklen was forced to find other

champion under pressure from US                                                                                                    employment after filing a critical
                                                                                                                                   report on the Bank’s approach to par-
                                                                                                                                   ticipation.
                                                                                                                                       The Dutch Executive Director to
The World Bank has appointed a new Vice President for ‘results’. The Bank’s                                                        the World Bank, Pieter Stek, hit back
                                                                                                                                   at Lerrick, calling his article “ill-
President commented: “we have come a long way in developing measures of                                                            informed and ill-disposed”. Stek
operational inputs and their quality. That said we need to do more to better                                                       commented “the OED is staffed with
                                                                                                                                   top-notch development profession-
measure and explain how our work makes a difference. The key is to move from                                                       als of impeccable integrity who call it
                                                                                                                                   as they see it. Their reports are noto-
largely measuring inputs to better focusing on outputs and outcomes”.                                                              riously hard hitting. All important
                                                                                                                                   evaluation reports are disclosed to
This move owes much to the noisy           and the Secretary of Treasury to              Lerrick counters:“when the auditors       the public”.
calls from the US administration and       reach out to the world community to           are captive,when the timing of judg-          It is not yet known what approach
senior US politicians for improved         develop a set of clear, concrete and          ment is premature,when the criteria       will be taken by Joanne Salop,the new
reporting on the Bank’s impacts.The        objective criteria for measuring              are faulty and when the numbers are       Vice President for Results, but it is
administration has said that its con-      progress in the above areas”. It is           selectively chosen—how credible are       very unlikely to go as far as suggested
tributions to the Bank’s IDA arm will      highly likely that the World Bank will        the conclusions?” He complained           by Lerrick (an external audit by pri-
depend on annual reports on results        play a key role in defining these.            that the Bank’s Operations Evalua-        vate sector companies) or some cam-
achieved. Announcing $5 billion in         Bank researchers are already pri-             tion Department (OED) “is a depart-       paigners (a Truth Commission). The
new aid money on 14 March, Presi-          vately celebrating official US accep-         ment of the Bank like any other,save      one result of Wolfensohn’s presidency
dent Bush stated that this would be        tance of their ‘selectivity’ approach.        for the ceremony of reporting to a        that all sides can agree on, however,
allocated to countries that demon-            But Adam Lerrick, a professor of           passive executive board. A revolving      is a vast increase in the number of
strate a strong commitment toward          economics and one of the lead                 door that leads back to standard line     World Bank Vice-Presidents and self-
good governance, investing in the          authors of the Meltzer Report to Con-         jobs and advancement in the bank          congratulatory reports.              ®
health and education of their people,      gress recently wrote an opinion piece         does not foster disinterested and rig-
and creating sound economic poli-          in the Financial Times complaining            orous judgment”. In fact service at
                                                                                                                                   ∑ globalarchive.ft.com/globalarchive/
cies including open markets and sus-       about the Bank’s judgement. The               the OED may not always lead to
                                                                                                                                     article.html?id=020306001861
tainable budgets. The White House          Bank reports that 78 per cent of its          advancement in the Bank. The OED
briefing noted that “the President         projects which concluded during the           recently lost the only non-economic       ∑ www.whitehouse.gov/news/releases/
has instructed the Secretary of State      last year had satisfactory outcomes.          social scientist on its staff—Warren        2002/03/20020314-4.html


ß
Development finance summit a fiasco, say campaigners
The International Conference on            expressed concerns about the process          deplete IDA’s resources over time.        the official conference.Demands and
Financing for Development ended on         and its outcome, highlighting US              NGOs expressed doubts about the           proposals include: debt cancellation
March 22 in Monterrey with few new         reluctance to make any new bold               implications of and motives behind        for Southern countries and a fair and
initiatives to achieve the 2015 devel-     commitment. The Mexican govern-               the US proposal. Supporters of the        transparent arbitration process,
opments goals. Civil society groups        ment was also described as pressur-           proposal have argued that it could        implementation of a tax on currency
organised their own ‘Foro Global’          ing G-77 countries to keep a low pro-         prevent impoverished countries            transactions to mobilise new
ahead of the Conference,challenging        file, especially on the issue of debt         building up unsustainable debt.           resources, and fulfilment of the 0.7
the so-called ‘Monterrey Consensus’.       relief.                                       Though a final decision on the IDA        per cent of GDP target for foreign aid.
   By the time officials and civil soci-       Unilateral pledges made by the US         replenishment was supposed to be          NGOs also claim that the World Bank,
ety representatives from all parts of      and the European Union in advance             reached early in 2002 to leave time for   the IMF, the WTO as well as national
the world gathered in Monterrey            of the Conference have received               national legislatures to approve the      and transnational corporations
there was little doubt the Conference      mixed reactions. George W. Bush’s             funds later in the year, discussions      should be accountable to the UN
would be largely a failure. The out-       request to the Congress for a ten bil-        appear to be deadlocked and no com-       Commission of Human Rights. ®
come of the Conference, known as           lion dollar aid increase over three           promise was expected to be reached
the ‘Monterrey Consensus’ had been         years has provoked questions and              during the Monterrey Conference.          Official UN Financing for Development site
drafted in preparatory committees          criticism as well as some cautious                The agreement for all European        ∑ www.un.org/esa/ffd
and was not subject to further nego-       support. There is no guarantee that           Union countries to commit to spend
                                                                                                                                   FfD Civil society forum
tiation, which led many civil society      the money will not be allocated fol-          0.39 per cent of their national income
                                                                                                                                   ∑ www.ffdforoglobal.org
organisations to question the wis-         lowing highly political criteria in the       on foreign aid was regarded by Euro-
dom of their participation in official     US crusade against terrorism. More-           pean NGOs gathered at the Foro            Taken for granted? US Proposals to Reform the
events. About 700 hundred of them          over, the plan having been clearly            Global as a last minute recognition       World Bank’s IDA Examined, Bretton Woods
attended the ‘Foro Global’ that was        designed to boost private foreign             by the EU that “the lack of concrete      Project, March 2002
held ahead of the Conference. It           investment, some groups such as               commitments for achieving global          ∑ www.brettonwoodsproject.org/
denounced the official agreement,          Globalization Challenge Initiative            poverty eradication and develop-             topic/reform/r27granted.htm
saying it failed to offer new mecha-       are concerned that the money will             ment goals undermines the rele-
                                                                                                                                   News Economic Foundation Chasing Shad-
nisms to mobilise new financial            go back to US corporations.                   vance of the so-called Monterrey
                                                                                                                                   ows: Re-imagining Finance for Development
resources to achieve the Millennium            Bush also reiterated the contro-          Consensus”. They called this
                                                                                                                                   ∑ www.jubileeplus.org/analysis/
Development Goals.                         versial US proposal to convert into           announcement and the US initiative,
                                                                                                                                      reports/chasingshadows.pdf
   Indeed the ‘Monterrey Consensus’        grants half of IDA (International             mere “face-saving reactions”.
is considered a failure, if not a set-     Development Association) conces-                  In a statement read to the official   Jubilee Research new report The unbreakable
back, by many participants to the          sional loans. Many European gov-              Conference Plenary,Foro Global rep-       link - debt relief and the millennium develop-
Conference, including some South-          ernments and NGOs have opposed                resentatives presented a range of         ment goals
ern and European governments. In           the proposal. Their main concern is           proposals in stark contrast to the lack   ∑ www.jubileeplus.org/media/
early March European officials had         that a large grants scheme would              of vision and concrete outcomes from          unbreakable_link.pdf

                                                                                     7
BRETTON WOODS UPDATE


ß                                                                                           New staff at Bretton Woods Project
Sustainability requires                                                                     Fabien Lefrancois and Jeff Powell have recently joined the Bretton Woods Project.
international institutional reforms                                                         Fabien, our new Policy Analyst, has until recently been working on the World Bank
                                                                                            and IMF at French campaigning organisation Agir Ici. He has run campaigns on
NGOs preparing to engage in the              rejection of international agreements,         World Bank and IMF accountability and complaint mechanisms, basic service
preparatory process for the World            including MEAs, by some countries is           provision and extractive industries.
Summit on Sustainable Develop-               yet another move that jeopardises the             Jeff, our new Communications and Research Officer, worked for a number of
ment are scrutinising the World              multilateralism needed to meet the             years assisting the development of cooperatives in Thailand. He has recently
Bank’s reports relating to the summit        challenge of sustainable develop-              completed a Masters degree in development studies, focussing on the Politics of
topics. They are examining whether           ment. The Bretton Woods Institu-               Alternative Development Strategies and completing a thesis on the Argentine
the reports are frank and clear about        tions,especially the IMF,have also pro-        Barter Network.
what needs to be done to ensure that         moted and drawn many Southern                  µ flefrancois@brettonwoodsproject.org
the world becomes more equitable             countries into macro-economic poli-            µ jpowell@brettonwoodsproject.org
and sustainable.                             cies that are adverse to the environ-
   The Bank’s flagship publication,          ment,destabilise national economies            Bank/Fund Spring meetings schedule
to be released at Johannesburg, will         and create social disruptions”.
be the World Development Report on Sus-          The WTO’s dispute settlement sys-          The World Bank/IMF Spring meetings are taking place in Washington DC on 20-21
                                                                                            April. A wide range of NGO events are also being planned in the week before the official
tainable Development with a Dynamic          tem based on retaliation and sanctions         meetings. Meetings will examine:
Economy. The Bank is also launching,         gives it a strong enforcement capabil-
in collaboration with other interna-         ity while the World Bank and IMF have          • The negative impacts of the World Bank policy of market-based land reform,
tional development organisations,            impressive financial resources which             looking in particular at the Brazil experience;
two other major reports which aim to         enable them to impose conditions on            • Devising legal approaches to secure reparations payments for communities
influence the summit preparatory             recipient governments. The UN spe-               suffering the social, cultural and environmental consequences of large-scale
process.These papers,being prepared          cialised agencies charged with imple-            development projects; and
with UNDP, UNEP, the EU and DFID,            menting the pledges from the 1992              • From engagement to protest: forum on citizens’ challenges to the World Bank.
cover Poverty/Environment Linkages and       Earth Summit in Rio are, by contrast,            This will focus in particular on the Bank’s failure to honour its commitments under
Innovative Financingfor Sustainable Devel-   very weak and thus unable to police              processes such as the Structural Adjustment Participatory Review Initiative and the
opment. The Poverty/Environment              the implementation of Multilateral               World Commission on Dams.
paper was posted on the web in draft         Environmental Agreements.
form in February for an electronic               Many NGOs agree that the greatest          Details of NGO events
discussion that will last until June,        weakness of the Rio summit was its             ∑ www.bicusa.org/mdbs/wbg/calendar2002.htm
and the Bank planned to post the             failure to include frameworks to reg-
draft WDR at the end of March for a          ulate financial institutions, transna-         Details of official meetings
much shorter comment period.                 tional corporations and new tech-              ∑ www.imf.org/external/spring/2002/index.htm
   A number of public figures and            nologies. They feel that the World
NGOs have recently released reports          Summit in Johannesburg later this
and statements that can be com-              year will not achieve much without
                                                                                            New on brettonwoodsproject.org                                                            27
pared with what the Bank is writing.         tackling the contradictions between            Joint statement airs concerns on trade policy training
UN Secretary-General Kofi Annan,for          economic liberalisation and other              The World Bank is working with the WTO and other agencies to deliver “capacity-
example, recently reminded rich              international agreements. This will            building” on trade policy. A number of organisations are concerned about the way this
countries that achieving the 2015 Mil-       imply a renegotiation of intellectual          important issue for post-Doha trade negotiations is being approached.
lennium Summit targets to halve              property rights agreements and an              ∑ www.brettonwoodsproject.org/topic/knowledgebank/k27tradestat.html
extreme poverty was ambitious in             examination of how government sub-             Taken for granted? US Proposals to Reform the World Bank’s IDA Examined
itself. But if sustainability is over-       sidies and procurement practices can           Briefing on the disagreements between US and EU governments on the pros and cons
looked “it will all be in vain”. Speak-      be used to further sustainability goals.       of providing grants instead of loans through the World Bank’s IDA.
ing in London in February, Annan                 The Global Environment Facility,           ∑ www.brettonwoodsproject.org/topic/reform/r27granted.htm
commented “it is equally important           one of the major institutional inno-
                                                                                            World Bank and IMF roles debated at development finance summit
that we achieve another goal set by          vations in the field of international          Analysis of the “Monterrey Consensus” document produced for the International
world leaders at the Summit:‘to free         institutions for sustainability,               Financing for Development (FfD) conference process.
all of humanity, and above all our           requires review. Whilst its gover-             ∑ www.brettonwoodsproject.org/topic/reform/r27ffddebate.html
children and grandchildren,from the          nance structure is relatively progres-
threat of living on a planet irre-           sive compared to that of the Bretton
deemably spoilt by human activities,         Woods institutions, it is too closely




                                                                                            ¬
and whose resources would no                 linked to the World Bank and has suf-
longer be sufficient for their needs’”.      fered from an unclear definition of
   Other commentators have spelled           what it should achieve.              ®
out what institutional and other
reforms will be needed to achieve sus-       E-consultations on World Bank WSSD reports:
tainability. Many of them argue that         ∑ www.worldbank.org/devforum                   Published by Bretton Woods Project
international sustainable develop-                                                          Working with NGOs and researchers to monitor the World Bank and IMF
                                             International Environmental Governance: Some
ment institutions have been margin-
                                             Issues From A Developing Country Perspective   ISSN 1471-1168
alised by the institutions of globali-
                                             ∑ www.twnside.org.sg/title/ieg.htm
sation. Chee Yoke Ling and Martin                                                           No permission needed to reproduce articles. Please pass to colleagues interested in
Khor of Third World Network argue            WSSD briefings, International Institute for     the Bank and Fund, and let us know of other groups interested in getting the Update.
that “instead of fulfilling its commit-      Environment and Development                    The Update is available in print, on the web and by e-mail.
ments under the Rio Declaration,             ∑ www.iied.org/wssd/pubs.html                  Bretton Woods Project
Agenda 21, and Multilateral Environ-                                                        c/o Action Aid, Hamlyn House, Macdonald Road, London N19 5PG, UK
                                             Charging the Use of Global Commons, Ger-
mental Agreements (MEAs),the North                                                          † +44 (0)20 7561 7546/7
                                             man Advisory Council on Global Change
has turned to the World Trade Organ-                                                        ≈ +44 (0)20 7281 2076
                                             ∑ www.wbgu.de/
isation in particular, to promote and                                                       µ info@brettonwoodsproject.org
                                                wbgu_pp2002_engl.html
obtain international rules that are                                                         ∑ www.brettonwoodsproject.org
increasingly acknowledged to be              Links to other relevant publications                subscriptions: subs@brettonwoodsproject.org
counter to the Rio spirit, principles        ∑ www.brettonwoodsproject.org/                 Supported by NGOs in the Development and Environment Group
and commitments. The unilateral                 topic/environment                           and by the CS Mott and John D and Catherine T MacArthur Foundations

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