World Bank-IMF spring meetings 2010
News||26 April 2010|
The spring meetings of the World Bank and IMF took place over the weekend in Washington, DC. You can find links below to analysis of the communiqués as well as notes of some of the civil society and official meetings.
On the agenda for the Development Committee, the group of ministers that sets direction for the World Bank, will be the Bank's governance reform and capital increase. There will also be discussions around the Bank's internal restructuring and planned future strategy. However the capital increase and voting rights changes will almost certainly hog most of the headlines. The G20 group of the world's biggest economies promised a 3 per cent shift in voting share towards "developing and transition countries". The Bank will proclaim success in achieving this, despite the fact that it fudged the definition of what is a "developing country" so that the category included many countries that have achieved high-income status (see Update 70 for a full analysis). With further reform being delayed until 2015, rich countries seem to have stemmed the surge of demands from the large emerging markets for deeper reform.
The Bank also asked for its members to put up more money, as it had stretched itself to its limits to lend more during the financial and economic crisis in 2009. After a big debate over the size of the capital increase, the Bank seems to have secured a $60 billion nominal boost to its capital, which means it will receive about $5 billion in actual cash (the rest is 'callable capital' that members would provide if ever asked by the Bank). This is a relatively small boost that will only allow the Bank to return to lending the same amount it did before the crisis. It also means that rich countries again rebuffed the large emerging markets who wanted a much larger capital boost and offered to pay for it entirely out of their own coffers.
The Development Committee agenda item on the Bank's strategy will be less popular with the press but possibly much more important for the long-term direction of the institution. The Bank is considering numerous changes to its structure and methods of working and lending. These could be positive or disastrous depending on how the reforms are carried out. Most noticeable though is that all these reforms and discussions have been kept completely out of the public eye until now. There have been no consultations with stakeholders and little discussion with most of the Bank's members (see Update 70 for a full analysis of the leaked strategic review plans).
On the agenda for the IMFC, the IMF's direction setting body of finance ministers and central bank governors, is as expected, a discussion of the state of the global economy and financial markets. This traditional first item has been scheduled second this time around, coming after a discussion of the IMF's mandate review. At the behest of the G20 the IMF has undertaken a fairly comprehensive review of its role and functions. The first overview paper was launched in January and deeper discussions will be had throughout the year on many different topics. The ministers will review progress and have their first go at expressing their opinions. The review promises to be quite divisive, with the emerging markets pushing deep reforms and rich countries resisting many changes (see a deeper analysis in Update 70). On a similar time scale is a further change in IMF governance - due for January 2011. The IMFC members will likely stake out their first positions on that change as well. After the discussion on the economic prospects for the world, the IMFC will hold a closed door session on the Early Warning Exercise - an attempt by the IMF, in cooperation with other international agencies, to try to identify economic and financial risks for the future.
The official World Bank and IMF meetings will likely be overshadowed by the G20 finance ministers meeting which is being held on the Friday. The big item on the agenda was supposed to be a debate about ways that banks can be made to pay for the financial and economic crisis. The IMF was producing an assessment of various options, including the campaigners' favourite - a financial transaction tax (FTT). Backers of the FTT, dubbed a Robin Hood tax by NGOs, will be up against resistance from not only the IMF but also conservative governments such as Canada who want no part of a tax on banks. The G20 is supposed to make progress on a whole host of other issues from financial reform and regulation to the framework for fair and balanced growth. However, at the Friday meeting of finance ministers, most of the attention focussed on Greece, as it was announced that Greece and formally submitted requests for assistance to the IMF and the EU. Greece becomes the first eurozone country to need an IMF loan, making it the first time a rich country using a important reserve currency has gone to the IMF since Britain's approach to the Fund in 1976.
The papers for the spring 2010 Development Committee meeting, scheduled for Sunday 25 April, are now online on the the World Bank's website. They include the following:
The papers for the spring 2010 International Monetary and Finance Committee meeting, scheduled for Saturday 24 April, have now been put online. They are available on the the IMF's website. Direct links are also below:
The World Bank's schedule of civil society events is also available.
Click on the titles below for minutes of sessions by the Bretton Woods Project and other NGOs.
Return here for highlights of meetings hosted by civil society organisations.
Below we bring the highlights from the communiqués at the spring meetings, including the G24, G20, IMFC and Development Committee. You can find detailed coverage of all communiqués in our dedicated article.
G24 communiqué: The G24 is a sizable group of the more powerful developing countries at the World Bank and IMF. The G24 set out strong positions around the current debates at the IMF and World Bank - even rejecting some of the agreements that came out of the G20 leaders summit in Pittsburgh. They have said that IFI reform is crucial this year but called for further and more ambitious IMF governance reform to be completed before the IMF changes its mandate. They have asked for more conditionality free financing from the IMF, and for the IMF to focus more on overseeing the policies of systemically important advanced economies. On the Bank side they have asked for a larger capital increase for both the IBRD and IFC. They only "took note of" rather than "welcomed" the World Bank governance reforms and demanded that a next round be advanced on an ambitious time scale. See the full analysis.
G20 communiqué: Curiously the G20 communiqué is actually rather hard to find, being on neither the IMF nor the G20 web sites. The statement itself is not particularly remarkable, and the G-20 failed to provide the point-by-point update on implementation that was available after the last G20 finance ministers' meeting in Scotland in November 2009. The lack of accountability on reforms, which many saw as inadequate anyway, will not please civil society organisations who want deeper and more structural financial reform. Despite having received the draft of the IMF report on the way banks can help pay for the costs of the crisis ( a leaked copy was published by the BBC), the communiqué makes no statement either way about support for or against any of the proposals. The one paragraph on the IFI reform agenda sets out no specifics, except for a request that the IMF governance reform package be completed by November 2010 rather than the previously agreed January 2011 deadline. See the full analysis.
IMFC communiqué: The IMFC is the direction-setting body of finance ministers for the IMF. The communiqué of the IMFC usually sets out the consensus position about the direction of the Fund and reform. However this time the communiqué only managed to make a long list of the issues up for discussion without providing any real conclusions or direction. The clear indication is that the countries sitting around the table have serious and fundamental disagreements about the key issues - especially on the IMF governance and mandate reviews. The very short communiqué points to the lack of consensus and raises questions about whether any significant reforms will be achieved this year. See the full analysis.
The IMFC statements by finance ministers are available. They should the views of individual countries on the issues.
Development Committee communiqué: The Development Committee is the direction-setting body of ministers for the World Bank. The meeting confirmed the changes in voting share and the increase in capital for the Bank that were already widely expected (see above) with the final real share of voting power for developing countries (excluding high income economies) of just over 42%. Voting changes were also approved for the IFC, and the committee also endorsed the Bank's new strategic direction document and called for "effective implementation". See the full analysis.
Development Committee statements will be posted online on Sunday evening.
Read detailed Bretton Woods Project analysis of the content of the communiqués and the story behind the positions as they come out.
This text may be freely used providing the source is credited.
Published: 26 April 2010 , last edited: 29 April 2010
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