Press release - November 10, 2005

IMF, World Bank control damaging Guyana programmes
Guyana Chronicle

A NEW study from the Social Justice Committee in Montreal, Canada, shows World Bank and International Monetary Fund (IMF) control of economic and anti-poverty programmes in Guyana to be damaging to government and citizen efforts, the group said yesterday.

A statement said two new studies from the committee and Halifax Initiative Coalition, Canada show that tight control by the World Bank and IMF resulted in ineffective economic reform and poverty reduction programmes here.

Control of the policy process by these institutions tended to stir resentment in the societies the programmes were supposed to help, because of low level of country ownership and civil society participation in programme design and implementation, it said.

The studies of economic policy in Senegal and Guyana, two heavily indebted poor countries, identified that problems with economic reform and poverty reduction programmes in those countries were due mainly to:

  • excessive control by the World Bank and IMF of the direction, scope and timing of economic reform and poverty reduction programmes;
  • the low level of actual country 'ownership' of economic policies and poverty reduction strategies, and
  • lack of processes of empowerment and capacity-building of affected citizens.

The papers point to the need for greater country autonomy in charting development paths and for greater civil society involvement in the process.

In particular, the papers highlight the continuing lack of full disclosure of relevant information and the informed consent by people affected, the committee said.

It said the Guyana study, by Derek MacCuish, describes the relationship between the financial institutions and the government to be one of tension and mutual distrust, with policy decisions taken in a context of conditions attached by the financial institutions to debt relief and financial aid, rather than one of mutual respect, shared perspective, and agreement on objectives.

"The reform process has tended to be technocratic and directed by the financial institutions at the expense of national ownership and the strengthening of civil society capacity.  This contributes to a reluctance to involve and empower civil society organisations, which remain isolated from decision-making processes and without effective avenues of engagement", it said.

It claims that this isolation weakens key programmes like the Poverty Reduction Strategy, and depriving it of legitimacy in the eyes of civil society.

"Reforms in major economic sectors were launched without adequate social impact assessment or public accountability, while reductions in government spending sought by the financial institutions were pursued at the expense of policies of social stability and job creation", the statement says.

The study of Senegal's Poverty Reduction Strategy process, by Wendy Philips, indicates that it suffered from a lack of government capacity, and a highly protracted and limited participatory process that fell short of being country owned or country driven.

The Senegalese government responded primarily to the demands of the financial institutions, resulting in a process that conformed to the macro-economic prescriptions of the institutions at the expense of local social priorities and democratic participation.

The Senegal study concludes that progress toward poverty reduction and national control over development would be strengthened through increased support to local governments and civil society organisations to build capacity to carry out and engage in poverty reduction policy initiatives, the statement says.