IMF back in business, but still politically bankrupt
Even before US President George Bush announced plans for next month’s G-20 Summit on the financial crisis (see “Just the Facts”), International Monetary Fund (IMF) Managing Director Strauss Khan has been pushing for the IMF to be front and center in addressing the crisis. In a complete about-face from one year ago, Strauss Khan now sees the IMF not just fighting fires through new flexible emergency loan arrangements to address food, fuel and finance crises, but as a “global regulatory coordinator” or world central bank.
IFI policies and positions
IMF back in business, but still politically bankrupt
The World Bank
Washington, D.C. 20433
Edith Grace Ssempala
Acting Senior Vice President External Affairs
October 26, 2008
Thank you for your letter regarding voice and participation of developing and transition countries in the governance of the World Bank Group. Mr. Zoellick asked me to respond, and I am therefore requesting that the Bretton Woods Project transmit this to all those who signed the letter.
The World Bank and Climate Change
The World Bank is one of the most powerful financial institutions in the world. Created in 1944, the Bank has now become the world’s largest public “development” agency, influencing the policies of the majority of the world’s developing and emerging economies. In recent years, noting the significant impact that climate change is already having on developing countries and the gap in financing mechanisms available for addressing these impacts, the World Bank has increasingly staked a claim for itself as a key player on the issue – with widespread criticism from developing country governments and civil society around the world.
On May 29, Bill C-293 or the “better aid bill”, received royal assent. This now legally requires Canadian official development assistance (ODA) to contribute to poverty reduction, take into account the perspectives of the poor, and be consistent with international human rights standards. The Canadian International Development Agency (CIDA) and Foreign Affairs Canada (FAC), among others, are in the process of developing plans on how to implement the Bill in practice. These comments are intended to help CIDA and FAC in their interpretation of the Bill for the various international financial institutions for which they are the lead agencies.
NGOs applaud adoption of “better aid bill”
Two and a half years after it was first introduced, and after a tense year sitting in the Senate for its final reading, Bill C-293 or the “better aid bill” was finally unanimously approved in Parliament on May 9 to loud NGO approval. It received royal assent yesterday, May 29, which now makes it law.
The changing face of global development finance
In 2007 Brazil’s Development Bank issued loans worth more than double the entire World Bank portfolio. More than half of the increase in aid since 2002 comes from debt relief, rather than new funding commitments. What’s more, from 1995-2005, Africa saw no net increase in its development aid despite a 35% increase in commitments to global aid over that period. In 2007, China financed more infrastructure projects in Africa than all multilateral and bilateral donors combined. The Gates Foundation provides more funding for neglected developing country diseases than all of the Group of Seven. These were some of the facts that emerged at an HI conference on “The Changing Face of Global Development Finance - Impacts and implications for aid, development, the South and the Bretton Woods Institutions.”
February 29, 2008
The Honorable Ban Ki-Moon
New York, NY
Dear Secretary General:
At the end of this year, governments of the world will meet in Doha, Qatar to evaluate progress in implementing the Monterrey Consensus. One of the critical elements of this consensus is the issue of external debt and its role in financing for development.
Corruption back on the Bank’s agenda?
Evidence of serious fraud and corruption has emerged in five Bank-funded health projects in Orissa, India. The $570 million for malaria, tuberculosis and HIV-AIDS control was implemented from 1997 to 2003. The charges emerged from a Detailed Implementation Review (DIR) of projects in India begun in 2006, a process itself triggered by evidence of corrupt practices by two pharmaceutical companies involved in another Bank health scheme. The Indian government has pledged to take “exemplary punishment” of the parties involved.
Increased donor funding boosts Bank, ignores bad policies
A record US$25.1 billion was pledged by donors to the World Bank’s low-interest loan and grant facility, the International Development Association (IDA), as discussions on IDA’s 15th replenishment drew to a close in Berlin. With $16.5 billion pledged by the Bank itself, the full replenishment stands at $41.6 billion, up 30 per cent from the $31 billion in the previous round. The latest replenishment covers July 1, 2008 to June 30, 2011.
The face of Global Development Finance is changing. The international financial system has entered into a remarkable period of transition, relative to a few years ago. Numerous countries have repaid their debts to the IMF ahead of schedule, leaving the Fund with a US$103 million shortfall in fiscal year 2007. Many of these same countries have indicated that they will not return to the IMF because of the burdensome conditions that it imposes on debtors.
In its place, new institutions and new sources of finance are emerging. Increasingly, Southern governments are seeking real alternatives to the Bank and Fund: a Bank of the South is emerging in Latin America, an $80 billion Monetary Fund has been created in Asia, and both China and India are providing Africa with condition-free financing that far surpasses current Bank allocations. But these new alternatives are not without their own challenges.
What: The Changing Face of Global Development Finance – Impacts and implications for aid, development, the South and the Bretton Woods Institutions
Who: Organized by the Halifax Initiative Coalition; co-hosted by the Canadian Council for International Co-operation, The North-South Institute and the Reality of Aid Network.
When: February 1 - 2, 2008.
Where: Rideau Room, Sheraton Ottawa Hotel, 150 Albert Street (between Metcalfe and O'Connor), Ottawa, Ontario, Canada.
Why: The conference will look at some of the emerging alternatives, as well as the opportunities and challenges they present, with respect to the current international financial system and its institutions.
Conference fees: $40 per day for non-Halifax Initiative members; $35 per day for HI members
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