On May 29, Bill C-293 or the “better aid bill”, received royal assent, now legally requiring 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. Finance Canada, among others, is in the process of developing plans on how to implement the Bill in practice. These comments are intended to help Finance Canada in its interpretation of the Bill for the various international financial institutions (IFIs) for which it is the lead agency.
International Monetary Fund
16 MAY 2008
Canadian Government Reports on IFI Activity Get Good Grade
The Canadian government’s annual reporting on its activities at international financial institutions is getting better, according to the authors, and to a Canadian civil society group which recently gave the latest report its best grade ever.
The Halifax Initiative said the report on 2007 activities merited a B+, up from last year’s rating of B-, and way up from the D grades of 2001-2005.
Global food crisis, Bank and IMF respond
While discussions of the World Bank’s new role in the “business” of climate change (see New Publications), the IMF’s new deal on quota reform (see JUST THE FACTS) and financial market turmoil looked set to top the agenda at the Bank and IMF’s Spring Meetings, it was mounting concern over the global food crisis that dominated discussions.
The Canadian Government, the World Bank and the International Monetary Fund:
A REPORT CARD on FINANCE CANADA’S 2007 ANNUAL REPORT to PARLIAMENT
Every year at the end of March, the Minister of Finance tables the “Report on Operations under the Bretton Woods and Related Agreements Act”. The Bretton Woods Conference in 1944 established the World Bank and International Monetary Fund (IMF). The annual report details Canadian priorities, commitments and interests over the past fiscal year at these institutions. The annual report to Parliament is an important tool for assessing the government’s actions within these institutions relative to its foreign policy and development objectives, and for informing Parliament and the Canadian public about Canadian priorities at these important multilateral fora. Canada is among a number of countries that report to Parliament on their activities at these institutions.
Innovative financing for development gets boost
As the World Bank, IMF and World Trade Organization are set to discuss innovative financing at their bi-annual High-Level meeting at the UN next month, and UN representatives address the issue in their review of Chapter IV of the Monterrey Consensus days later (see IU January 2008), innovative finance has gotten a series of unexpected boosts from various sides.
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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