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Africa: World Bank Protests/Policy
AfricaFocus Bulletin
Apr 13, 2004 (040413)
(Reposted from sources cited below)
Editor's Note
Controversies about the World Bank, which marks 60 years with its
spring meetings this month, are attracting less attention than the
high-profile debates about Iraq and terrorism. The Bank's policies
and programs, nevertheless, have profound effects on countries
around the world, and particularly in Africa. Both protesters and
other critics remain skeptical of this powerful institution's
claims to be fighting poverty and contributing to development.
This issue of AfricaFocus Bulletin contains (1) the call to
demonstrations in Washington later this month, endorsed by more
than 130 organizations in the U.S. and around the world, (2) brief
commentaries from the Bretton Woods Project on current policy
issues at the World Bank, including reports from Malawi and Zambia,
and (3) links to other sources on current World Bank policy issues.
Another AfricaFocus Bulletin sent out today has selected background
information on the Bank's own Extractive Industries Review. This
review has resulted in unexpectedly strong proposals for change
that World Bank leaders are currently resisting.
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AfricaFocus website announcement: Focus on African Countries
In order to supplement the information and analysis provided in the
AfricaFocus Bulletin, which most often highlights issues affecting
countries around the continent, the AfricaFocus website now offers
"country focus" pages on each African country. These pages include
convenient customized searches and quick links to a variety of
country-specific data. They are particularly intended to serve as
a quick-start for students and others seeking relevant and reliable
information amid the profusion of sources available on the web.
Features that may particularly interest AfricaFocus readers include
a customized Google search limited to sites that are registered
using the country's own two-letter internet domain. A few
countries, such as Western Sahara and Guinea-Bissau, currently show
no results for such a search. Despite Africa's relative
disadvantages in connectivity, however, (see
http://www.africafocus.org/docs03/it0312b.php), the number of sites
appearing for most countries is significant and increasing.
Please check out the country pages at
http://www.africafocus.org/country/countries.php
Let me know if you find mistakes or outdated links, or if you have
suggestions for other features that might be included without
making the pages too unwieldy or difficult to maintain.
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50 Years is Enough: U.S. Network for Global Economic Justice
http://www.50years.org
Call to Action for Mobilization
April 21 - 25 in Washington, DC
For six decades, the World Bank and IMF have imposed policies,
programs, and projects that:
- Decimate women's rights and devastate their lives, their
families, and their communities;
- Subjugate democratic governance and accountability to corporate
profits and investment portfolios;
- Trap countries in a cycle of indebtedness and economic
domination;
- Force governments to privatize essential services;
- Put profits before peoples' rights and needs;
- Abet the devastation of the environment in the name of
development and profit;
- Institutionalize the domination of the wealthy over the
impoverished - the new form of colonialism; and
- Facilitate corporate agendas through the economic re-structuring
of countries enduring conflict and occupation, such as East Timor,
Afghanistan, and Iraq.
In the 60th anniversary year of the IMF and World Bank, we demand
the following measures from the institutions and the governments
which control them. Add your voice, endorse the demands:
- Open all World Bank and IMF meetings to the media and the public;
- Cancel all impoverished country debt to the World Bank and IMF,
using the institutions' own resources;
- End all World Bank and IMF policies that hinder people's access
to food, clean water, shelter, health care, education, and right to
organize. (Such "structural adjustment" policies include user fees,
privatization, and economic austerity programs.);
- Stop all World Bank support for socially and environmentally
destructive projects such as oil, gas, and mining activities, and
all support for projects such as dams that include forced
relocation of people.
We furthermore recognize the urgency of the world's most
catastrophic health crisis, the HIV/AIDS pandemic. We assert the
culpability of the international financial institutions in
decimating health care systems of Global South countries, and
reject the approach of fighting the pandemic with more loans and
conditions from these institutions. We call on the world's
governments to best deploy their resources by fully funding the
Global Fund to Fight AIDS, Tuberculosis, and Malaria. We demand the
elimination of trade rules that undermine access to affordable
life-saving medications.
Help end global economic injustice driven by the policies and
programs of the international financial institutions!
Educate, Organize, Mobilize!
Be the change you want to see in our world!
Organize public events in 2004, help expose the continued use of
power, veiled by rhetoric, to enrich corporations, banks, and
investors at the expense of people and the planet.
Mass mobilization April 21 - 25, 2004:
Come to Washington! Take a public stand in Washington DC during the
IMF/World Bank semi-annual meetings.
email [email protected] or call 202/463-2265 for details & updates
Challenges to World Bank report on
Millenium Development Goals Progress
Bretton Woods Project
http://www.brettonwoodsproject.org
5th April 2004
The World Bank has produced its first report on countries' progress
towards the Millennium Development Goals (MDGs). While few disagree
with the aims of the goals, a number of groups are concerned that the Bank is not
the appropriate agency to be undertaking such a review. This is
because the goals are primarily a UN creation and because the World
Bank suffers a major conflict of interests in producing reports
about the policies of countries where it is itself deeply involved
in policy-making. This problem is at its clearest in the third
section of the Bank's report which focuses on the policy
performance of the international financial institutions themselves.
In theory there is an agreed division of labour. The UN is the
scorekeeper on MDG outcome statistics, ie the numbers of children
in primary schools. The World Bank is concentrating on the policy
and institutional framework to achieve the MDGs. But the World Bank
and key donor governments are aware that the most important ground
to occupy is the commanding heights of interpretation and blame
allocation. That the blame game is starting ahead of the 2005
deadline for preliminary assessment of MDG progress is clear from
comments by many NGOs and officials. Senior UN official Richard
Jolly said last year: "pursuit of the MDGs could well be undermined
in the future, as it has been in the past, if there is no change in
structural adjustment policies." Many NGOs and academic researchers
argue precisely that very little has changed in key macroeconomic
adjustment policies.
The Bank's new report is divided into three sections. The first
looks at developing countries, the second at developed countries
and the third at the performance of international financial
institutions. The section on the South is based almost entirely on
the controversial Country Policy and Institutional Assessment
(CPIA) exercise; a scorecard that the Bank produces annually for
all low-income countries where it lends. The CPIA is controversial
because it is non-transparent and because the judgements made to
compare countries are subjective and not informed by wide debate.
Last April the Development Committee recognised the problems with
the CPIA, urging "the Bank, working in a participatory manner, to
continue to improve the CPIA methodology and the transparency of
its application".
Trevor Manuel, the South African finance minister who chairs the
Development Committee, noted last April that "Ministers urged that
the assessments included in the global monitoring reports be based
on transparent criteria that would facilitate objective and
impartial judgments, with several calling for the active
participation of developing countries in the further work to be
done on refining the CPIA methodology and application". There have
been some meetings on this, but no major breakthroughs in changing
the approach.
The section on developed countries focuses in particular on trade
and aid. It presents assessments of the impact on poorer countries
of richer countries' trade regimes. It also produces a new measure
of the quality of aid, based largely on whether it is targeted at
the poorest countries.
The section on international financial institutions summarises some
of the figures produced by the IFIs themselves on development
impact and effectiveness. It is understood that some other IFIs
also queried the Bank's role in pulling together these statistics
and deciding on the analytical framework to be adopted.
The Development Committee last year called on the Bank and Fund to
work closely with other international agencies "using institutional
mandates to guide the division of responsibilities for monitoring
work". It is understood that some key donor governments are using
the self-reinforcing argument that the UN lacks the capacity to
produce annual reports on policies towards the MDGs, so it has to
be the Bank which does them. Ministers on the Development Committee
will, however, have an opportunity to revisit appropriate division
of labour for the future when it discusses this first MDG report at
the spring meetings.
Mike Rowson, director of MEDACT, a health NGO said: "it's
ridiculous that the Bank should play such a far-reaching role in
assessment of the MDGs. One of the aims of the Global Health Watch
and other civil society initiatives is to open some policy
discussion around alternatives. Putting the Bank in charge of
assessing progress towards the MDGs simply strengthens their
position - what we need is more perspectives and more debate about
whether the Bank's policies are right".
World Bank pushes Malawi agriculture privatisation
Bretton Woods Project
http://www.brettonwoodsproject.org
5th April 2004
The World Bank is demanding the privatisation of the Malawian
agricultural marketing board as a condition of its latest
structural adjustment loan. The way the Bank has manoeuvred to
persuade Malawi's parliament to accept this shows the limits of
'country ownership'. It also demonstrates key weaknesses in one of
the World Bank and IMF's new tools, Poverty and Social Impact
Analysis (PSIA) studies which are supposed to outline likely
consequences of key reforms so as to enable a better debate on
policy design. A Malawian civil society campaign coalition which
has mobilised against these planned reforms expressed its concern
with how the World Bank and other donors have pushed their agenda
on this issue "at the expense of the food security of the poor".
The privatisation of the state marketing board in Malawi (ADMARC)
has been an objective of the World Bank for 10 years. It represents
a central element in an approach to agriculture that holds that
full liberalisation of the sector will be best for poor women and
men. This approach has been increasingly questioned in Malawi and
other countries in the region, particularly in the context of the
recent food crisis. Many commentators believe the full
liberalisation of other elements of the agriculture sector under
Bank and Fund advice was a major cause of the food crisis and the
subsequent deaths in 2002.
Because of the controversy over the proposed reforms, including
studies by civil society groups, the Bank agreed to commission a
Poverty and Social Impact Analysis. This research showed that
ADMARC's important role in supporting the lives of poor women and
men would be destroyed by privatisation. But, presumably
embarrassed by the results, the Bank delayed publication of the
study for two years, withholding it until just after the Malawian
parliament had agreed to the reforms.
In late December 2003 legislation was rushed through a special
parliamentary session turning ADMARC into a limited company, the
first stage in the privatisation process. This session was
boycotted by many MPs, partly because they had already expressed
opposition to the privatisation of ADMARC in two previous hearings.
Civil society campaigners expressed concern that ADMARC
privatisation was being "used as a carrot for grants and loans".
This was borne out by the Bank's response to the parliamentary
vote, a February announcement of a new $50 million structural
adjustment credit with the privatisation of ADMARC as one of its
conditions.
The civil society and official impact analysis studies agreed that
ADMARC is clearly in need of reform, but demonstrate that it plays
a vital social role in ensuring market access for the rural poor by
running subsidised markets country-wide. These markets would close
under privatisation and the small and weak private sector would be
unlikely to fill this gap, leaving a dangerous vacuum in service
provision that directly threatens people's livelihoods.
Civil society groups have mobilised to publicise these issues, with
a major campaign during 2002 against the privatisation of ADMARC.
An active media campaign resulted in a series of high-profile
national debates. Parliament was closely involved, and in
particular the Agriculture committee which carried out its own
analysis showing the harm that privatisation would cause to the
poorest.
The decision-making process and its outcome are being declared
unacceptable by Malawian civil society groups. They are "demanding
that any conditionality regarding ADMARC is immediately removed
from the new loan" and encouraging civil society groups in other
countries to take action in their support. Groups pushing the Bank
to conduct Poverty and Social Impact Analyses will also need to
ensure far greater control over the process of commissioning,
reviewing and disseminating such studies, to ensure that they
enrich debate rather than sit on shelves until the World Bank or
IMF browbeat parliamentarians to accept their agendas.
[For additional background on international financial institutions
and food security in Malawi, see:
http://www.africaaction.org/docs02/food0206.htm]
Life under the IMF's magnifying glass:
A Zambian civil servant chafes at the collar
Bretton Woods Project
http://www.brettonwoodsproject.org
5th April 2004
Zambia entered the enhanced Heavily Indebted Poor Country (HIPC)
initiative in November 2000. According to the agreement with the
IMF and the World Bank, the country was supposed to have reached
the 'completion point' - the point at which debt relief would
actually be delivered - in December 2003. This would have meant
Zambia being relieved of about half of its huge external debt of
$6.8 billion.
Despite its good track record for the first two years (according to
the Fund and the Bank), Zambia was removed from the Fund's credit
line in April 2003 after it was discovered that the country was not
meeting limitations on public sector salaries set by the Fund.
Consequently Zambia has been put on a Staff Monitored Programme
(SMP) until June 2004, instead of the conventional Poverty
Reduction and Growth Facility (PRGF). During this period, should
Zambia fail to satisfy the conditions of the IMF/World Bank, the
country will not reach the completion point. This means it would
have to pay close to $300 million in debt servicing from domestic
resources in 2004, with that figure rising in subsequent years.
Breaking the agreement
The Zambian Government is the country's biggest employer. However,
remuneration in the civil service cannot be compared to what
persons with similar qualifications in the private sector earn, or
even what is earned by civil servants in neighbouring countries.
Many professionals have been leaving the civil service to go and
work where conditions of service are better. In the hope of
retaining its professional staff, the Government introduced a
housing allowance system. As a result, the ratio of public sector
wages to GDP reached 9%, exceeding the 8% agreed with the Fund in
the budget: Zambia was removed from the PRGF and put on a Staff
Monitored Programme.
To meet the 8% agreement, in this year's budget there is no salary
increment for any civil servant despite rising price levels linked
to increased value-added taxes and import duties. Housing
allowances have been reduced to unacceptable levels. No new civil
servants are to be employed for the next one and half years despite
a shortage of doctors and teachers in government-run institutions.
These new measures are supposed to be operational by 1 April.
Life under the Staff Monitored Programme
The Zambian SMP started in July 2003 and runs to June 2004. The
Fund has assigned six economists to monitor the Zambian economy.
Each one is an 'expert' in the real, fiscal, monetary or external
sectors. Some of these 'experts' are recent college graduates with
little or no knowledge of the Zambian economy.
Under a PRGF arrangement, the Fund only makes at most two visits in
a year. Under the SMP this increases to at least four visits.
Progress in implementing the SMP is monitored monthly. Targets are
defined in a technical memorandum of understanding. Under the
arrangement the Government has to justify all its expenditures.
A committee chaired by the minister of finance meets once every two
weeks. The IMF resident representative attends these meetings as an
observer. Also, once a country is on a SMP, it is the IMF staff
assigned to monitor that country who represent it on the board.
To graduate out of the SMP Zambia has to meet certain conditions.
The main ones are reducing the budget deficit to the agreed upon
target of not more than 3 percent of GDP and maintaining a public
sector wage to GDP ratio of not more than 8 percent. Additionally
Zambia is expected to privatise the remaining public utilities in
the energy and telecommunications sectors. To make matters worse
the monies realised from the sale of the parastatals must be used
for debt servicing and not for investment or consumption purposes.
The Zambian government is at a crossroads. If it pleases the
IMF/World Bank by going along with the proposed measures in the
letter of intent, it is likely to cause industrial unrest. If it
goes with the will of the people, the country will have to pay
hundreds of millions of dollars more in debt servicing.
[For additional background on Zambia's debt, see
http://www.africafocus.org/docs04/debt0402.php]
Additional Sources on World Bank Policies
Operations Evaluation Department, World Bank
http://www.worldbank.org/oed
World Bank Bonds Boycott
http://www.worldbankboycott.org
IFIwatchnet
http://www.ifiwatchnet.org
Bank Information Center
http://www.bicusa.org
Structural Adjustment Participatory Review International Network
(SAPRIN)
http://www.saprin.org
Statement by Global Unions, March 19, 2004
http://www.icftu.org/www/pdf/enstatementimfwbspring2004.pdf
AfricaFocus Bulletin is an independent electronic publication
providing reposted commentary and analysis on African issues,
with a particular focus on U.S. and international policies.
AfricaFocus Bulletin is edited by William Minter.
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