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CIVIL SOCIETY NEWSLETTER
NOVEMBER 2004
This newsletter is prepared by the Policy Communication Division of the IMF’s External Relations Department. It is based on submissions from staff members involved in outreach to civil society.
The newsletter is published in English, French, Spanish, and Russian and(except the Russian version)is posted on the IMF websiteat . If you would like to subscribe, you may sign up through the website notification system.
We welcome your feedback. If you have comments or questions, please send an email to or contact us by phone at (202) 623-9400 or by fax at (202) 623-8769.
All documents and papers referenced in the newsletter can be printed from the IMF website at .
If you have problems accessing the links or downloading the PDF-formatted documents, contact us at the numbers listed above and we will be happy to send you copies.
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in this issue
Recent Developments in IMF-CSO Relations
Feature Article:
High-level meeting of the World Council of Churches, World Bank, and International Monetary Fund
The 2004 Annual Meetings:
Civil society dialogues at the Annual Meetings:
Townhall meeting with CSOs
An update on the IMF’s role in low-income countries
Other CSO policy dialogues
Civil Society-IMF Dialogue:
IMF and World Bank meet with union leaders
Letters from the Field:
Kenneth Meyers, Rwanda
Bulletin Board:
Other recent meetings between the IMF and CSOs
Inside the IMF
Selected speeches
Selected publications
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Recent Developments in IMF-CSO Relations
The 2004 IMF-World Bank Annual Meetings were the first for the IMF’s new Managing Director Rodrigo de Rato, who assumed his post in June. The meetings also marked the 60th anniversary of the BrettonWoods agreement on the founding of the IMF and World Bank. The meetings came after a period of extensive travel by de Rato, including two visits to Africa and one each to Latin America and Asia, that allowed him the opportunity to hear wide ranging views on the global economy, issues facing developing countries, and the role of the Fund.
In his speech to the meetings, de Ratodescribed his developing perspectives. On the question of how to address the needs of the low-income countries, de Ratofocused on the Fund’s core expertise—the provision of policy advice to achieve macroeconomic stability—and on the need for increased trade liberalization, particularly through the Doha round, and increased aid from the advanced economies:
We have seen encouraging results where such stability has been complemented by structural reforms and by targeting public spending to areas of greatest benefits to people. Mozambique, Tanzania, and Uganda have seen sustained improvements in economic performance. Growth rates have also picked up in other African countries that have made progress in curbing inflation and establishing better control of the public finances. Where such improvements in policymaking are evident, developed nations should fulfill their end of the bargain by liberalizing trade and delivering aid. They should improve access to their markets for developing countries' exports and dismantle trade-distorting subsidies. There must also be increased aid, not just for the countries under the HIPC Initiative but for others as well. In some countries, we are indeed seeing larger inflows of foreign assistance, including to combat HIV / AIDS. Other ideas for increasing aid for low-income members, including deeper debt relief and increased grant financing, are needed and welcome. The Fund is ready to help design polices that would help countries make the most effective use of these increased resources. Better aid coordination among donors, and multi-year commitments, are also needed to make development assistance more effective. But, first and foremost, we need to increase aid levels
The Annual Meetings also offered the opportunity for representatives of civil society organizations (CSOs) to sit down with staff members from the Bank and the Fund to discuss a range of issues of mutual concern. About 150 people from organizations in 30 countries attended the civil society dialogues, including the second annual townhall meeting with leaders of the two institutions. But recent contacts have not been confined to the Annual Meetings. Immediately after that gathering, top officials of the Fund and Bank met with representatives of the international labor movement.Later in the month leaders of the Bretton Woods organizationsmet with leaders of the World Council of Churches in Geneva.
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Feature Article:
High-level meeting of the World Council of Churches, World Bank, and International Monetary Fund
The first ever meetingof the leaders of the World Council of Churches (WCC), IMF and World Bank took placeon October 22at WCC headquarters in Geneva. The main speakers representing the three organizations were World Bank President JamesWolfensohn,IMFDeputy ManagingDirectorAgustínCarstens, and WCCGeneral Secretary Rev. Dr. SamuelKobia. The meeting was moderated by CornelioSomarruga of the Caux Initiatives for Change and former President of the International Committee of the Red Cross, and also addressed byDr.AgnesAbuom, President for Africa of the WCC. IMF Managing Director Rodrigo de Rato was unable to participate in the meeting because of an official commitment, but participated in a private meeting earlier in the day with Kobia, Abuom, Wolfensohn, and Carstens. The afternoon meeting, in which a number of other representatives of the three organizations participated, followed several preparatory meetings held since May 2002 (see Civil Society Newsletter April 2003 and February 2004). The meetings were initiated after the management of the two Bretton Woods Institutions (BWIs) expressed a wish to engage in dialogue with the WCC to improve mutual understanding of the organizations' work in development.
The meeting focused on establishing common ground for efforts to address global poverty, and onexploring continuing areas of difference in approach and views on development issues.The session concluded that the areas of common ground are large and significant, and that the three institutions should find more effective ways to work together in the future. There was agreement that the dialogue process would continue, and that it would focus in the period immediately ahead on case studies that could be expected to clarify issues and specific topics that lend themselves to common action.
The meeting was characterized by a frank and generally positive exchange of views. In his formal statement, Kobia stressed the issue of voice—in his view the WCC has always representedthe voiceless—and the need for a world economy that places people at the center of development. Growth is not enough, he said; we must deal also with the issues of inequality. Kobia concludedby focusing on the issues of environmental protection and the democratization in the BWIs.
Abuom said that poverty is caused by a failure of brotherly love in the world.The WCC is concerned with the need to change the market system, and has not succeeded in persuading the BWIs of this need. Increased trade alone does not reduce poverty or improve equity, she said; there is a need for redistributive measures, and the world needs just, participatory, and sustainable communities. She criticized the BWIs as undemocratic: with Africa having only two Executive Directors, the institutions are essentially a platform for the industrial countries. Highlighting the issues of human rights, she called on the BWIs to look more to their work through a rights-based framework.In sum, she said, the dialogue must continue.
Wolfensohnreiterated his deep conviction about the critical role of religions in the issues of development.He said he has spent eight years trying to build bridges with faith-based institutions.He highlighted his concerns regarding the role of youth, gaps between rich and poor, and too much focus on the short-term concerns of security versus the long-term problems of poverty.We are, he stressed, facing a serious crisis of inaction after so many promises and commitments. Wolfensohn said he wasdeeply troubled by the WCC’s 2002publication "Lead us not into Temptation", which he said presented an inaccurate picture of the World Bank and its mission, work and staff.He focused also on how the Bank approaches issues of human rights—largely through its actions.He noted that the issues of governance—representation and voice—in the BWIs were issues for the shareholders, not for management. In concluding, he called for a two-year amnesty between the WCC and the BWIs and a determination to work together on the issues of poverty.
Carstensreviewed the mandate and role of the IMF, describingits work in surveillance—the regular monitoring and consultation of each member country’s economy—and in managing crises. The IMF is charged partly withhelping governments to make difficult decisions in difficult times. He notedmisconceptions about its role and work.He discussed thePoverty Reduction Strategy process and its origins. He emphasized the progress made through thedialogue process as a result of the hard work of the staffs of the threeinstitutions. He saw much to be hoped for in the common ground identified.
The ensuing discussion included some frank exchanges on governance of the IFIs; the "disciplinary role" of the IMF; the role of the Bank and Fund in dealing with indigenous peoples; and on innovative sources of development financing.The conclusions focused on the importance of using the MDG framework as a vehicle for mobilization and action. There was also discussion of equity issues. Kobia and Abuom focused in their concluding comments on the path traveled together and on the common cause that linked the three institutions.
After the meeting, the leaders of the three organizations issuedajoint statement, calling the discussions significant and useful. The statement links to a more detailed paper on Common Ground and Differences of View between the Bretton Woods Institutions (IMF and World Bank) and the World Council of Churches, prepared by the staff involved in the discussions. This innovative paper aims to set out clearly areas of agreement and disagreement between the BWIs and the WCC.
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The 2004 Annual Meetings:
Civil society dialogues at the Annual Meetings
The civil society dialogues at the 2004IMF/World Bank Annual Meetings focused on the role of the Bretton Woods Institutions (BWIs) in low-income countries—in particular in facilitating debt relief and promoting debt sustainability—and the status of the Poverty Reduction Strategy Papers (PRSP) process. Many of the meetings were organized by the IMF and World Bank, but several eventswere sponsored by CSOs. The highlight was a CSO townhall meeting that brought together the heads of the IMF and World Bank as well as the Chairmen of the Development Committee and the IMFC. Participating were nearly 150 representatives of NGOs, labor unions, faith-based groups, and foundations from over 30 countries, all of whom were accredited to the 2004 Annual Meetings.The full list of dialogues as well as minutes of most sessions will be available at
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Townhall meeting with CSOs
Most of the accredited CSO representatives participated in the September 30townhall meeting with GordonBrown, U.K. Chancellor of the Exchequer and Chairman of the IMFC; TrevorManuel, South Africa's Minister of Finance and Chairman of the Development Committee; IMF Managing Director Rodrigo de Rato; and World Bank President JamesWolfensohn. This was de Rato’s first meeting with global CSOs, after meeting local CSOs on recent trips to Africa and Asia. At last year’s Annual Meetings in Dubai former Managing Director Horst Köhler participated in a similar session. This year’s meeting was chaired by ArunaRao, Director of Gender at Work, and Chair of the Board of Directors of CIVICUS.
Speaking first, Chancellor Brown said that if the Millennium Development Goals (MDGs) are to be met, the international community will have to dramatically increase the amount of development aid that is available in the next few years. He said that on present trends, countries in sub-Saharan Africa will achieve the MDGs only by the year 2130—115 years late. “We must find better methods of financing development aid so that the great combination of economic development, trade, and development aid make it possible to have a world economy working for all of the people all of the time,” Brown said.
If multilateral debt relief is to match bilateral debt relief, additional money will have to be generated, he said, noting that the UK has suggested that a revaluation of IMF gold reserves could take place again. He said there is undoubtedly scope for action without affecting the integrity of the IMF’s reserves or the gold market. There can be a move forward under the leadership of the World Bank and the IMF, if the member countries have the will to do so, Brown concluded.
De Rato told CSOs that the IMF’s gold reserves have been used as recently as five years ago to generate funds, and that repeating that exercise depends on the will of the IMF Executive Board and not of IMF management. If the political will exists to use the gold, he said, the Fund would find the technical means to achieve the objective. He told CSOs the IMF has a close relationship with civil society and that the Fund needs a regular exchange of views with CSOs to perform its responsibilities. Discussing the IMF’s involvement in poverty-reduction efforts and debt relief, de Rato said one of the major challenges from the 2004 IMF-World Bank Annual Meetings was for countries to step forward to increase aid—through some of the new mechanisms that are being discussed, but also through traditional channels.
Manuel told the meeting that South Africa’s gold mining industry employs tens of thousands of workers from South Africa and neighboring countries, and it has experienced significant job losses. He insisted that South Africa needs to be heard in any discussions on the sale or revaluation of gold reserves. He said his concerns center less on prices than on volatility that could cause job losses affecting poor countries. Answering a question from Jubilee Iraq on the cancellation of odious debt, Manuel said the issue is a very tough call. He asked who would make the determination of whether debt is odious: if Iraq’s debt is deemed odious, why would that decision not apply also to the Democratic Republic of Congo? Manuel said there should be rules on the issue that apply equally to all aspects of the work of the Bank and the Fund and that do not create moral hazard.
JamesWolfensohn said any fair assessment of the Bank’s reaction to the Extractive Industries Review of World Bank investments in oil, gas, and mining will conclude that the Bank has come a very long way. He said a campaign launched against the Bank has claimed that “if you don’t do 100 percent, you’re doing nothing” and this is not right. The Bank believes it would be wrong for the institution to withdraw from coal, oil, and gas investments and has made a significant contribution to cleaning up such projects. The Bank has an important influence on the projects’ environmental standards.
In response to a statement from the floor on voice and representation in the BWIs, Manuel said the issue is “an ongoing battle” that addresses a “deficit of democracy” in the institutions. Poor countries are inadequately represented, and it has to be asked whether the Bank and the Fund are part of the multilateral system or merely arrangements between debtors and creditors.
Other topics raised in the Q&A session included women's participation and visibility in the MDGs; World Bank conditionality; CSO accreditation to the Annual Meetings; corruption; and Argentine debt.
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An update on the IMF’s role in low-income countries
At a September 30 meeting on the IMF’s role in low-income countries (LICs), Policy Development and Review Department (PDR) Assistant Director MarkPlant told CSOs that the right place to have a conversation between CSOs and the government is in the participatory Poverty Reduction Strategy Paper (PRSP) process. Plant said that a PRSP process ideally would lead to a policy program supported by the Poverty Reduction and Growth Facility (PRGF)—the IMF’s low-interest lending facility for LICs— but that in reality this sequence does not always occur. The goal remains, however, of better aligning the two processes.
Participants in PRGF program negotiations (the IMF and the government), he said, need a system under which discussions on the PRSP can inform the preparation of the PRGF, which in turn can come back and inform subsequent discussions on the PRSP. The Fund and Bank hope to make a move in that direction, Plant said, by transforming the Joint Staff Assessment (JSA) into the new Joint Staff Advisory Note (JSAN). The JSAN is intended to provide advice and feedback from the Boards of the Bank and Fund to the authorities on a country’s poverty reduction strategy, rather than making a snap judgment on whether or not PRSP was a sound basis for offering concessional support.Plant stressed that the Fund would now make its assessment of a country’s macroeconomic framework public, instead of making implicit criticism. Acountry’s proposed macro frameworkmight be aspirational, but the Fund could observe that, in its view, the framework was unattainable in, say the next two or three years, and explain why. This would stimulate a debate that should be more fruitful for all participants in the process. People on each side of the debate would know exactly what the other side was thinking. The Fund’s intention is to put the participatory process where it belongs—in the PRSP—and at the same time ensure the PRGF is sensitive to the agreements reached in the participatory process.