Highlights of UK NGO meeting with executive director to the WB and IMF, Tom Scholar April 2006

On IMF strategic review:

• Managing Director's proposals (in the paper due out next week) need more work - this is not the end of the process - CSO participation is anticipated in next stage before the annual meetings
• UK agrees that Fund should have invited broader participation sooner
• Joint WB-IMF committee on evaluating the division of responsibilities is expected to seek civil society input
• Fund role in low-income countries will be most difficult area of the review - UK pressing for explicit recognition of progress towards MDGs as part of Fund's responsibility

On debt:

• NGO campaign was effective in securing / improving the WB part of the Multilateral Debt Relief Initiative (G8 debt deal)
• Joint WB-IMF paper will look at 'free rider' problem (post-debt relief, new sovereign and private lenders encouraging countries to get back into debt troubles). This issue will be addressed at mid-term review of IDA XIV (in Sept-Oct)
• UK still has objective of debt relief for all low-income countries, but "no appetite" this year amongst other shareholders
• There is a strong case for looking at odious debt, but current circumstances are not promising
• Trying to look at debt relief from a human development lens - what is clear is that by any such measure, needs outstrip countries' current capacity to borrow, and this means more resources should be available on grant terms
• Re Fair, Transparent Arbitration Procedure - UK was supportive of Fund's Sovereign Debt Restructuring Mechanism - but is doubtful of what an 'independent' arbitration mechanism could accomplish without the parallel financial commitment to pay.

On conditionality and fiscal space:

• Background paper on fiscal space for spring meetings concedes that the Fund has paid insufficient attention to the macroeconomic specifics of low-income countries
• Need further academic research in this area - DFID has sponsored Fund research
• UK agrees that HIPC conditionality has been too much - however, economic policy conditionality is not "by and large" the cause for delay. It used to be, but now it is governance failures that are holding things up.
• One-year conditionality review is expected for annual meetings, but won't have much experience to go on. Therefore, we look to NGO examples of where "lighter touch conditionality" was effective
.
• UK will use information from DFID in-country offices to decide if it will or will not follow IMF off-track signal.

On social transfers:

• [Scholar interested to see Helpage report on Zambian intergovernmental conference where 13 African governments called for more use of social transfer programmes.]
• Hope that African governments would deliver the idea to the board (possibly via one of several groupings which African EDs are involved in) to consider how Bank should respond-Africa Action Plan may be a hook

On universal primary health care, elimination of health user fees, education:

• This will get attention on the spring meetings agenda under the discussion of the Global Monitoring Report
• Will have to come back to participants on universal primary health care as Caroline Sargeant (UK alternate ED) is leading on this
• UK will team up with NL, Canada and other active education donors to look at how the new money Brown announced will be spent - don't want to add to compliance burden of countries by adding additional planning requirements.

On predictability:

• Aid effectiveness will be on the annual meetings agenda "one way or another"
• Didn't realise that World Bank didn’t report to OECD-DAC on disbursements

On corruption:

[Scholar was interested in NGO response to Bank manoeuvres on this issue.] Bretton Woods Project indicated that NGOs in this network were working their way through what was a complex issue, and made some concrete recommendations:

• Develop a consistent, transparent framework for deciding when to suspend financing
• release the Pozen report (on Bank systems of transparency, accountability and integrity) which is assumed to be guiding Wolfowitz's accountability drive
• take up the recommendations of the Vaughn report on whistleblowers
• Reform the integrity department. Streamline sanctions procedure, and need face up to larger corporations involvement in malpractice
• Revisit the Extractive Industries Review recommendation to adopt minimum standards in governance, transparency and human rights in institutionally weak countries

On climate change:

Due to time constraints, and the absence of key groups on this issue, it was suggested that this be raised in writing and at the meeting with Hilary Benn.

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Published: 20 April 2006 , last edited: 19 April 2007

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