Moldova & IMF IMF Activities Publications Press Releases

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Civil Society Newsletter
February 2005

In this issue:

Recent Developments in IMF-CSO Relations

Feature Article:
Responding to the tsunami

Millennium Development Goals:
The IMF's work in low-income countries

IMF continues dialogue on HIV/AIDS and macroeconomic policy
New IMF publication: The Macroeconomics of HIV/AIDS

New IMF publication: Postconflict Economics in Sub-Saharan Africa-Lessons from the Democratic Republic of the Congo

Civil Society-IMF Dialogue:
The IMF at the Fourth Bridge Initiative International Annual Meeting

IMF invites public comment on Draft Guide on Resource Revenue Transparency

Letters from the Field:
Simonetta Nardin, Brazil

Bulletin Board:
Other recent meetings between the IMF and CSOs
Selected speeches
Selected publications


Recent Developments in IMF-CSO Relations

On December 26, an earthquake and tsunami of unimaginable magnitude devastated coastal areas of South Asia, costing the lives of some 250,000 people. In an extraordinary show of generosity, governments and international organizations have already pledged some $4 billion in the form of grants and soft loans, and several donors have indicated that their contributions could rise. IMF Managing Director Rodrigo de Rato issued a statement on the day of the tragedy. He followed that with a statement at the ASEAN Leaders' Special Meeting in Jakarta on January 6, just before traveling to Indonesia's hard-hit Aceh province. He expressed his sympathy and condolences and said that the IMF is prepared to offer all assistance at its disposal. This includes sizable funds under an emergency assistance facility, and advice and technical assistance in assessing the macroeconomic impact and budgetary and balance of payments needs stemming from the disaster. The feature article explains these efforts in detail.

With the international community preparing for the UN Millennium Summit in September, 2005 will be an important test of the international community's commitment to poverty reduction. The overall picture is not encouraging. With just 10 years to go, the evidence suggests that, on current trends, most of the Millennium Development Goals (MDGs) will be missed globally, and by a long way in Africa. Civil Society Organizations (CSOs) have started targeting G-7 countries with their campaigns urging 100% debt relief and increased development assistance for poor countries. The G7 discussions of these important matters likely will come to a head in the next six months. The IMF is preparing several papers and reviews that will contribute to the joint international effort to reduce poverty. An article gives an overview of this upcoming work on low-income countries.

Of great interest to CSOs, especially to those working on the local level-as well as to global CSOs working on transparency issues-is the recent Draft Guide on Resource Revenue Transparency that addresses the challenges associated with the management of revenues from extractive industries such as oil, natural gas, and mining. The guide, summarized in an article, has been posted on the IMF's website in a number of languages and comments are welcome until February 18.

Recent dialogue between the IMF and CSOs involved the diverse social movements and CSOs at the fourth Bridge Initiative Annual Meeting in Paris. The Initiative aims to facilitate dialogue between key players in the globalization debate. In January, IMF staff, for the first time, attended the World Social Forum in Porto Alegre, Brazil. Simonetta Nardin, IMF Senior External Relations Officer, describes her experience in a letter from the field.

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Feature Article:

Responding to the tsunami

The December 26, 2004, South Asian tsunami disaster brought forth an unprecedented global outpouring of humanitarian assistance. At least 250,000 lives were lost, and millions of others were severely affected by the destruction. Governments and international organizations already have pledged some $4 billion in the form of grants and soft loans, and several donors have indicated that their contributions could rise. United Nations Secretary General Kofi Annan announced that $970 million would be available to meet the immediate needs of the relief effort.

In addition, a number of participants have supported debt relief to the affected countries, in the first instance through a moratorium on payments due this year. The G-7 countries agreed to pursue this option through the Paris Club.

IMF Managing Director Rodrigo de Rato attended the international donors conference in Jakarta, Indonesia, on January 6 and also, along with World Bank President James Wolfensohn, visited devastated areas of Aceh province in Sumatra. After the meeting, he said: "The affected countries have widely varying needs and capacities, so it is essential to have a clear understanding of the financing strategies that can be pursued in light of the different offers on the table. It is extremely important that the governments take advantage of the offers of grant aid. While concessional loans and debt relief may be attractive in the short term, grant aid will not have to be repaid, and such offers may not be available after the immediate crisis fades."

The International Monetary Fund is prepared to offer all assistance at its disposal, including sizable funds under an emergency assistance facility. This financing, which could be on the order of $1 billion for the most affected countries, could be made available without an IMF program. Sri Lanka already has received a deferral of its repayments for the remainder of 2005, totaling about $113 million. Taken together with a request for new funding, the Fund could provide Sri Lanka with the equivalent of $250 million of assistance.

The IMF also can provide advice and technical assistance in assessing the macroeconomic impact and budgetary and balance of payments needs stemming from the disaster. The Maldives has already requested such assistance.

Later in January, IMF First Deputy Managing Director Anne Krueger visited Sri Lanka and the Maldives. At the conclusion of her visit to the Maldives, she said in a statement: "The government made clear to me its concern to carry out the recovery effort without undermining the laudable progress it has made in macroeconomic policy in recent years. It will be important to move as quickly as possible to help the homeless and undertake reconstruction. At the same time it will be important to avoid generating bottlenecks that could in fact slow down delivery of rehabilitation and risk macroeconomic instability."

In the weeks following the tsunami IMF staff, their spouses, and Fund retirees donated almost $154,000 for the victims. IMF management matched those contributions dollar-for-dollar, for a total of almost $308,000. The money will be go to the International Federation of Red Cross and Red Crescent. Those organizations' $400 million relief effort will provide emergency and supplemental food aid, water and sanitation, vaccinations and other health aid, tents, blankets, hygiene kits, and kitchen sets, psychosocial assistance, and direct support costs to the affected nations.

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Millennium Development Goals

The IMF's work in low-income countries

The IMF this year will continue to review its policies and its role in low-income countries-from poverty reduction strategies to the design of its facility for poor countries. This work could not be more timely and appropriate. Throughout 2005, the international community will consider progress toward the implementation of the Millennium Development Goals (MDGs) by 2015, an effort that will culminate with the UN Millennium Summit in September. The IMF's work will help review and define the role the Fund is playing in helping poor countries increase growth and reduce poverty-essential aspects in their path to achieving the MDGs.

The following is an overview of upcoming papers and reviews, as well as an update on the Fund's recently established unit carrying out work related to poverty and social impact analysis (PSIA) at the Fund.

Fund Signaling and Donor Coordination in Low-Income Countries

The paper addresses the Fund's role in supporting donor financial assistance to low-income countries, and how it can better coordinate its own support with that of other partners. The paper will draw on the results of a survey of donors/creditors/Multilateral Development Banks and Poverty Reduction and Growth Facility (PRGF)-eligible members to better understand their demands and needs. It will consider two sets of interrelated issues: first, the current situation regarding the impact of Fund signals on donors and recipients, and whether their needs are being met; and second, practical aspects of Fund/donor coordination. The paper will aim to identify mechanisms to strengthen the Fund's instruments and processes in both areas. The paper will be prepared for Board discussion in advance of the Spring Meetings.

Poverty Reduction Strategies Review

This year marks the fifth anniversary of the Poverty Reduction Strategies (PRS) initiative, and World Bank and Fund staff plan to use the 2005 progress report (prepared every year for the Annual Meetings of the institutions) to review progress, challenges, and good practice related to several key issues. In particular, the review will address how to increase the effectiveness of the Poverty Reduction Strategy Papers (PRSPs) as a vehicle for attaining the MDGs. The 2005 review will include the views of staff members and other stakeholders, including country officials, donors, civil society organizations, and other partners. It will focus on five themes identified through discussion with stakeholders and review of literature that is central to the effectiveness of the PRS approach. The themes are:

1. Strengthening the medium-term orientation of the PRS approach;

2. Utilizing the PRS as a mutual accountability framework between countries and donors;

3. Broadening and deepening meaningful participation;

4. Enhancing linkages between the PRS, Medium Term Expenditure Framework, and budgets; and

5. Tailoring the approach to conflict-affected and fragile states.

A concept note will be posted shortly on the World Bank and IMF websites. A number of consultations are planned, including an online discussion forum. More information will be distributed shortly. The review will be included in the progress report, which will be discussed by the Boards of the Fund and the Bank shortly before the Annual Meetings.

Review of PRGF Program Design

This review will focus on three areas that are key to the Fund's efforts to enhance growth and poverty alleviation among its low-income members: (i) lessons for low-income countries and the Fund from the post-war experience of determinants of growth; (ii) monetary and fiscal policy design in countries that have succeeded in their stabilization efforts; and (iii) the macroeconomics of high aid inflows. It is expected that these papers will be considered by the Board shortly after the 2005 Spring Meetings.

Debt Sustainability

The Executive Boards of the IMF and the World Bank have endorsed the key elements of a proposed debt sustainability framework for low-income countries. The objective of the framework is to support low-income countries in their efforts to achieve the MDGs without creating future debt problems, and to keep countries that have received debt relief under the Heavily Indebted Poor Country (HIPC) Initiative on a sustainable track. In guiding future financing decisions, the framework rests on three pillars: (i) an assessment of debt sustainability guided by indicative country-specific debt-burden thresholds related to the quality of policies and institutions; (ii) a standardized forward-looking analysis of the debt and debt-service dynamics under a baseline scenario and in the face of plausible shocks; and (iii) an appropriate borrowing (and lending) strategy that contains the risk of debt distress.

Building on initial Board discussions of the proposed framework in February/March 2004, and further considerations in September 2004, the staffs of the two institutions are preparing a follow-up paper that attempts to resolve outstanding issues on the indicative debt-burden thresholds; the interaction of the framework with the HIPC Initiative; and the modalities for Bank-Fund collaboration in developing a common assessment of sustainability.

Conditionality Guidelines

The Fund will shortly conduct the first review of its new conditionality guidelines, adopted in 2002. While these guidelines apply to all IMF lending, they are highly relevant to the Fund's work in low-income countries. The guidelines emphasized the importance of, among other things, national ownership of policy programs and of parsimony and clarity in the formulation of conditions. Although the ultimate objective of the new guidelines was to contribute to improved economic outcomes, it is still too early to evaluate whether they have made a difference in this respect. The review will, however, examine whether the Fund's structural conditionality has been streamlined, both in terms of breadth of coverage and numbers of conditions, and if appropriate efforts have been made to promote ownership. The review will also provide some preliminary evidence as to whether these efforts are leading to more consistent implementation of Fund-supported programs, which was expected to be an intermediate step toward better ultimate outcomes.

Poverty and Social Impact Analysis

In July, the Fund formally set up a Poverty and Social Impact Analysis (PSIA) group of five experts within an existing division in the Fiscal Affairs Department. Area departments have now identified ten countries (Bolivia, Djibouti, Ethiopia, Kenya, Mali, Moldova, Senegal, Sri Lanka, Tajikistan, and Uganda) where PSIA support would be most valuable. Work plans have been developed by the group and relevant country teams. The PSIA group has participated in four missions, addressing issues ranging from the liberalization of energy prices to the response to macroeconomic shocks. Several more missions are planned for early 2005. If resources permit, the group will also undertake PSIAs in the IMF's core areas where no such studies are available. However, the small size of the PSIA group limits what can be done in the short run. Robert Gillingham, who leads the team, will be meeting with CSOs in London on February 18 to brief them on the group's work program.

Review of Fund Work on Trade

A report that will be discussed by the Board at the end of February assesses the Fund's priorities in the trade area, takes stock of its work, and reviews the Fund's collaboration and division of labor with other institutions. The report notes that the Fund has been a consistent advocate of open trade regimes. In recent years, it has encouraged developed countries to examine the impact of their trade policies on poorer countries, has pressed for an ambitious Doha Round, and has worked with members to address potential balance of payments or fiscal impacts of liberalization. There has been a decline in the number of trade-related program conditions under Fund-supported programs, but an increase in aspects of trade-related surveillance, management communication, and research. Among other recommendations, the report suggests that the Fund should strengthen its focus on trade in services and on the spillover effects of trade policies in large developing countries. It also notes that there remains considerable scope for the Fund to draw more on the expertise especially of the World Bank in the trade area. Finally, the report also requests the Board's guidance on whether to conduct follow-up work based on case studies that would look more deeply at the design and impact of trade reforms recommended by the Fund.

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IMF continues dialogue on HIV/AIDS and macroeconomic policy

To address allegations that the IMF is an obstacle to funding for the prevention and treatment of HIV/AIDS in countries with Fund-supported programs, the IMF's Fiscal Affairs Department hosted a half-day workshop on January 19 bringing together many key actors involved in the issue. The meeting was the second held at the IMF in the past six months to discuss how the Fund, donors, and governments can address the challenges of delivering and absorbing HIV/AIDS-related foreign aid.

The workshop brought together official donors, international agencies, policy institutes, and nongovernmental organizations (NGOs), and sought to go beyond the general discussions of the June meeting (see IMF Survey July 12, 2004). Instead, it focused on specific issues related to the scaling-up of donor aid in four countries: Honduras, Kenya, Uganda and Zambia. The countries were chosen on the basis of feedback from the Global Fund to Fight AIDS, Tuberculosis and Malaria. Fund mission chiefs for the four countries engaged in an informed dialogue with the Global Fund's representative and the other participants. The meeting was opened by Deputy Managing Director Agustín Carstens and moderated by Peter Heller, Deputy Director of the IMF's Fiscal Affairs Department.

Although donors are increasingly committing financial resources to the fight against HIV/AIDS, scaling up health spending will require that several specific problems be addressed before conditions on the ground can improve markedly. Most participants expressed concern that the medium-term spending plans of countries are too rigid and prevent a more rapid increase of health spending. However, Fund mission chiefs described in great detail how Fund-supported programs contain no health-related spending ceilings. Rather, they are designed with only broad fiscal deficit ceilings aimed at ensuring macroeconomic stability. The mission chiefs defended the work of the Fund in the four countries against the accusation that the IMF impedes increased spending. (For a discussion of the Fund policies related to spending on HIV/AIDS, see this recent document.)

Nonetheless, all participants acknowledged the magnitude of the problems faced by the effort to fight the epidemic and mitigate its impact. Countries have difficulties absorbing large aid inflows because of severe shortages of health care professionals, poor compensation for health workers, inadequate medical facilities, and an unreliable supply of medicines. Another challenge mentioned was how to weigh the urgency of spending on HIV/AIDS with other crucial health and poverty-related priorities. Participants also said that greater predictability and sustainability of aid flows is essential.

The IMF's policy dialogue with governments typically involves finance ministries and central banks, while many workshop participants pursue their policy dialogue with health ministries. Participants suggested that the dialogue on budget priorities in the health sector should be widened to other stakeholders. They said this would improve transparency about the spending priorities of finance ministries under an IMF program.

Although many participants said they were reassured that the IMF does not become directly involved in a country's health spending decisions, the consensus was that it needs to do more to clarify its role. Although IMF country reports do not discuss health sector issues explicitly, the meeting clearly revealed, and participants were impressed by, the extent to which most mission chiefs take into account the HIV/AIDS issue and their efforts to ensure appropriate fiscal space for increased health spending. Participants suggested that the IMF should work with development partners to clarify how fiscal ceilings are developed, and to reassure the authorities that program ceilings will be flexible in accommodating additional spending when financing is available, particularly on grant terms.

Many of the participants had also attended the June meeting, and they encouraged the Fund to continue this dialogue. They argued that future meetings could be extended to a broader outside audience, in order to provide a better understanding of the extent of the IMF's work on these issues, and the complexity of the issues as they are being addressed at the country level.

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New IMF publication: The Macroeconomics of HIV/AIDS

To mark World AIDS Day, December 1, 2004, the IMF published The Macroeconomics of HIV/AIDS, a book edited by Markus Haacker, an economist in the IMF's African Department. The volume brings together contributions by experts from many different international organizations and other institutions involved in formulating and implementing policy responses to the epidemic or dealing with its social and economic consequences.

The book was published with two goals. First, it is intended to fill the gap between studies focusing on specific sectors-especially public health and education-and assessments of the broader social and economic consequences of the disease. In contrast with most other macroeconomic studies on the subject, the book emphasizes how HIV/AIDS affects society and the economy overall through its microeconomic impact, and describes the implications for the welfare of individuals and households. Second, by spelling out the fiscal dimension of HIV/AIDS, and linking the response to HIV/AIDS to a macroeconomic framework, the book aims to provide a resource for public policymakers seeking to develop an effective response to the epidemic and to formulate economic policy in countries severely affected by the HIV/AIDS.

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New IMF publication: Postconflict Economics in Sub-Saharan Africa-Lessons from the Democratic Republic of the Congo

The Democratic Republic of the Congo (DRC), the third-largest country in Africa, is making significant progress at both the political and economic fronts to extricate itself from one of the bloodiest wars in African history and decades of economic mismanagement. The DRC has made progress toward breaking the vicious circle of hyperinflation, a declining currency, and collapsing output. This turnaround offers lessons for other countries coping with internal conflict and for the international community in its efforts to provide adequate and timely support to postconflict countries.

The IMF has just published Postconflict Economics in Sub-Saharan Africa-Lessons from the Democratic Republic of the Congo, a book edited by Jean A.P. Clément, Assistant Director in the African Department. The book looks at the lessons and challenges from conflict to reconstruction, providing an analysis of African conflicts, and especially their key economic characteristics. These issues have been at the center of the IMF staff's work on the DRC in recent years. The book also includes an article from World Bank staff on the demilitarization and reintegration of ex-combatants in the DRC.

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Civil Society-IMF Dialogue:

The IMF at the Fourth Bridge Initiative International Annual Meeting

A December 5-7 meeting of the Bridge Initiative in Paris brought together a diverse group of actors, including high-level representatives from multilateral institutions and global civil society, notably the World Social Forum (WSF). This year the IMF was represented by Klaus Enders, Assistant Director of the IMF Offices in Europe, and Simonetta Nardin, IMF Senior External Relations Officer, who said that the number of participants, larger and more diverse than in previous years, offered a special opportunity to engage, listen, and discuss issues of mutual interest.

It was the fourth of the Bridge Initiative's Annual Meetings, an effort initiated in 2000 by independent media producers in Europe and North America to encourage dialogue among stakeholders with conflicting perspectives on globalization issues. The group has hosted a series of seminars and televised debates between well-known CSOs, business, and IFI representatives. IMF staff have participated in several Bridge Initiative events in Europe and the U.S. (see Civil Society Newsletter February 2004).

While the Paris agenda envisaged five different working groups, participants decided on the first day to concentrate on two issues: the January 2005 WSF in Porto Alegre and the 2005 activities related to the Millennium Development Goals (MDGs). A UNESCO representative addressed what he called the misgivings within the social movements about contact with the Bretton Woods Institutions (BWIs). He told participants that if they want to change the world they have to be both "outside" (i.e. protesting in the streets) as well as "inside" (cooperating wherever possible) these institutions. Whoever wants to influence global governance has to gain influence over these institutions, the speaker said, and this has to be achieved largely by working with national governments to influence the positions they take in the boardroom discussions of the BWIs. At the WSF in Mumbai, India, in 2003, the "Tables of Controversy" offered a space for UN agencies to participate in debates that were usually reserved for CSOs. There were four tables in 2003, and the organizing committee was considering 30 different proposals this year.

The working groups also discussed the MDG-related events in 2005 that will lead up to the UN Millennium Summit in September in New York. In one group the discussion quickly turned to the MDGs themselves. Members of the WSF worried that the MDGs were dividing the movement: While many NGOs (especially in the North) are embracing the MDGs and will spend the year campaigning to achieve them, many in the South consider them an "imposition" of a charity/aid-focused approach that they reject, preferring a human rights-based approach to development.

The meeting ended with the organizers' pledge to organize Tables of Controversy at the 2005 WSF, and they stated their intention to ensure that the World Bank and the Fund would be invited to participate (see letter from the field).

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IMF invites public comment on Draft Guide on Resource Revenue Transparency

As part of the effort to promote transparency among member countries, the IMF has invited the public to comment on a Draft Guide on Resource Revenue Transparency. The guide addresses the challenges associated with the management of revenues from extractive industries such as oil, natural gas, and mining. It is available on the IMF website in Arabic, Chinese, English, French, Portuguese, Russian, and Spanish. Comments are welcome until February 18, 2005, ( and will be reviewed and considered in the preparation of the final version of the Draft Guide.

Stronger government institutions and improved transparency can provide significant benefits to a country. Fiscal transparency can promote more informed public debate. It also helps achieve sounder budget policies. The guide applies the Fiscal Transparency Code and supplements the Manual on Fiscal Transparency, which was published in 2001 as part of the IMF's work on Standards and Codes. Fiscal transparency reports, or fiscal Reports on the Observance of Standards and Codes, have been published for about 70 member countries on the IMF's website. These reports assess country practices against the standards defined in the Fiscal Transparency Code. The draft guide can be used for fiscal transparency assessments by the IMF in natural resource-rich countries and will also be useful in the IMF's policy dialogue in these countries.

Fiscal transparency has become an important issue for CSOs in the past few years. The IMF has engaged in an extensive dialogue with groups that are involved in Publish What You Pay and other campaigns related to extractive industry revenue transparency (see Civil Society Newsletter May 2004). The IMF also supports the Extractive Industries Transparency Initiative (EITI), which was launched by UK Prime Minister Tony Blair at the Johannesburg World Summit of Sustainable Development in September 2002.

Summary of the Draft Guide

The Draft Guide promotes fiscal transparency in four areas:

1) Clarity in the roles and responsibilities of government. For example, governments should establish a clear legal and regulatory framework for the natural resources sector, covering all production stages and including licensing procedures, production sharing contracts, and the fiscal regime (e.g., royalties and other taxes). The relations between governments and state-owned enterprises, the mechanisms to coordinate oil savings funds with the government budget, and resource revenue sharing arrangements between central and local governments should also be clear.

2) Disclosure of resource revenue data and other relevant information. In this area, many resource-rich countries can make quick and highly visible progress. All government resource revenues should be published in the budget and other reports. Governments should also disclose data on debt and other liabilities (e.g., government guarantees) related to resource sector operations; financial assets (e.g., those held in oil savings funds); and information on noncommercial (quasi-fiscal) activities of state-owned enterprises, such as the sale of energy products below cost.

3) Open processes for budget preparation and execution. Governments need to make clear policy statements on the use of revenues from natural resources. Non-resource fiscal balances (i.e., the fiscal balance excluding resource revenues) should be used to monitor fiscal policy performance, in addition to the overall fiscal balance and other indicators. Price and other relevant risks, as well as measures to address them (e.g., hedging policies), should be explained in budget documents. Systems and policies on accounting and internal control and audit should be transparent and applied as elsewhere in the public sector. Domestic and international resource companies should be subject to the same tax administration framework as other companies, and this framework should be clear and cover all aspects related to taxpayers' rights and obligations, revenue administration powers, and dispute resolution processes; and

4) External or independent assurances of integrity. This includes the necessity of companies complying fully with internationally accepted standards for accounting, auditing, and publication of accounts. A national audit office or any other independent national organization should verify and report regularly to Parliament on revenue flows between companies and the government.

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Letters from the Field:

Simonetta Nardin, IMF Senior External Relations Officer, Porto Alegre, Brazil
The IMF at the World Social Forum

"Ça c'est un travail perilleux!" The French official's admonition was the most memorable of a series of comments about the dangers of walking around Porto Alegre prominently displaying an IMF badge. Others were more direct, asking me, only half-jokingly, if I had been attacked - verbally, at a minimum!

Welcome to the World Social Forum (WSF), in Porto Alegre, Brazil where displaying your affiliation to that Fund is considered an occupational hazard. But despite the many warnings about my institutional affiliation, what I saw while walking the five-kilometer length of the Forum, set along the banks of the Guaiba River, was more surprise then anger, disbelief rather then rage. Young activists with Che-emblazoned t-shirts point to my badge and whisper. Others are so confused that they ask: "The IMF? That IMF?! The International Monetary Fund?" One participant takes a picture of me and my badge, "to prove that we are in dialogue," and thanks me for attending. A member of the European Parliament salutes the change: "Two or three years ago you could not have walked around here, and now everybody is happy that you are in Porto Alegre!"

For the first time this year, the Fund attended the World Social Forum. In its fifth year-held in the last week of January as a counter-event to the World Economic Forum in Davos-the WSF this year drew 150,000 representatives who, over five days, attended more than 2,000 events. They pondered everything from the role of religion in modern conflicts to "neoliberal capitalism." Many of these events featured the Fund: from how we block progress in the fight against HIV/AIDS to the calls to retire-at 60.

I was invited, together with the World Bank and the United Nations, to participate in a so-called Table of Controversy organized by the Bridge Initiative (see story above), to discuss the issues related to the Global Call to Action Against Poverty (GCAP), a campaign launched by many civil society organizations around the world. The discussion highlighted the view that the IMF is still seen by many as part of the problem. The issues raised by civil society panelists, Thomas Deve of Zimbabwe's Mwengo (Reflection and Development Centre for NGOs in East and Southern Africa) and Cecilia Lopez Montano of Agenda Colombia, focused on the shortcomings of the international community, and in particular the IMF and the World Bank, in reducing poverty. Many questions from the audience came from African participants who affirmed that Africa is poor because of policies imposed by the Bretton Woods Institutions. Candido Grzybowski of Brazil's Ibase offered reflections about the governance of the UN, the IMF and the Bank, calling for a democratization of the institutions.

While it was difficult to address all these issues in a debate, my World Bank colleague and I tried hard to focus on some commonalities. Sensing a shift among rich countries about the urgency to address poverty, the GCAP has three very pragmatic themes on which it will campaign: more aid; better trade terms; and debt cancellation for poor countries. The Fund is working extensively on many of these issues. For instance, the Fund stands ready to help countries make better use of increased aid flows, if and when they materialize.

Most importantly, the Fund's will to engage, and the openness of CSOs to having the Fund speak at one of the Forum's events, highlights the fact that IFIs and CSOs are all stakeholders in the development discourse. The need for occasions like the discussion in Porto Alegre will hopefully give us a chance to build on our common goals while respecting our differences.

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Bulletin Board

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Other recent meetings between the IMF and CSOs

  • In cooperation with the World Bank and the United Nations Development Program, the IMF organized a day-long workshop on data about microfinance on October 26. The workshop, with the title "Data on Access of Poor and Low-Income People to Financial Services," was the outcome of CSO and UN requests for the Fund and Bank to help assess the nature and scope of microfinance around the world. From the IMF side, the Statistics, Monetary and Financial Systems, and Research Departments were involved. Leading academics and practitioners made presentations and took part in free-ranging discussions. The workshop was chaired by Stanley Fischer, Vice Chairman of Citigroup and former IMF First Deputy Managing Director. How to measure accurately the scope of microfinance remains under discussion, and the IMF continues to be committed to finding ways to be helpful and supportive. The Fund will also be involved in other UN-led activities during 2005 as part of the International Year of Microcredit.

  • On November 11, Deputy Managing Director, Agustín Carstens, met with the President of the Pontifical Council for Justice and Peace, Renato Cardinal Martino in Rome, Italy. The Deputy Managing Director also met with several Italian NGOs.

  • On November 16-17, IMF Executive Directors and staff participated in the first of four global Multistakeholder Consultations on Systemic Issues held in the IMF's headquarters. The consultations, organized by the New Rules for Global Finance Coalition, are designed to provide input to the High-Level Dialogue on Financing for Development, as part of the June 2005 follow-up to the 2002 UN Conference on Financing for Development, held in Monterrey. These sessions provided a forum to discuss issues on development finance, systemic stability, and poverty reduction issues. Participants were from a variety of civil society groups, the International Financial Institutions, government representatives, and academics. The next two consultations are scheduled to take place in Lima, Peru on February 17-18 and in Nairobi, Kenya in March.

  • On November 19, David Coe of the Asia and Pacific Department, Jon Shields of the African Department, and Andy Berg and Amber Mahone of the Policy Development and Review Department, met with Global Witness Director Simon Taylor and Mike Davis of Global Witness Cambodia. Discussions focused on the recent Global Witness report "Taking a Cut" about corruption in the Cambodian logging industry, and macroeconomic conditions in Cambodia and Angola.

  • Hiroyuki Hino, Director of the IMF Regional Office for Asia and the Pacific, participated in a special session of the 18th Quadrennial Congress of the International Confederation of Free Trade Unions (ICFTU), held in Miyazaki, Japan, from December 5-10. The session, entitled "Tackling Injustice and Poverty," was a panel discussion focused on the UN Millennium Development Goals. The other panelists were Salil Shetty, Director of the UN Millennium Development Goals Campaign, and Louise Richards, of Solidar. The moderator was Aidan White, General Secretary of the International Federation of Journalists.

  • Robin Robison of U.K.-based Quaker Peace and Social Witness met with Nicaragua mission chief Nigel Chalk and with Uganda mission chief Jean Clément on January 10 to discuss the economic situation in each country, in particular HIPC-related spending and the overall macroeconomic outlook. Robison also met jointly with Jo Marie Griesgraber of the New Rules for Global Finance Coalition with Robert Gillingham of the Fiscal Affairs Department's (FAD) Poverty and Social Impact Analysis (PSIA) group, for an overview of the Fund's PSIA activities.

  • On January 27, FAD and EXR hosted a presentation by Pamela Gomez of the Center on Budget and Policy Priorities, and author of "Opening Budgets to Public Understanding and Debate: Results from 36 Countries." The study provides a cross country analysis of transparent budget practices most important for civil society involvement in budget preparation and implementation. Going forward, the study will expand to analysis covering 60 countries. Günther Taube of FAD's Fiscal Transparency Unit chaired the meeting.

  • Some 50 faith and development leaders gathered in Dublin in late January for a meeting hosted and chaired by World Bank President James Wolfensohn, Lord George Carey (former Archbishop of Canterbury), and Archbishop Martin of Dublin. The meeting addressed links between poverty, social tension and marginalization, and global security, within the context of "mounting global inequities." Graham Hacche, Deputy Director of the IMF's External Relations Department, attended on behalf of Managing Director Rodrigo de Rato. Interest was expressed by some participants in IMF-related issues such as debt relief and the Poverty Reduction Strategy (PRS) process. Participants agreed that the World Faiths Development Dialogue (WFDD) should continue, and the aim is to work out arrangements and financing for the secretariat over the next six months. During discussion the Fund indicated its interest in continuing to develop its role in the dialogue.

  • On February 3, the French government's consultative agency, the Haut Conseil de la Cooperation Internationale (HCCI) organized a Forum with CSOs, with the support of the French authorities and the OECD Development Assistance Committee (DAC), to prepare for the Paris High-Level Forum on Aid Effectiveness to be held at the end of February. DAC delegates, NGOs, and labor union representatives compared their analyses of harmonization and alignment; mutual accountability and transparency; the participatory approach in development cooperation; and the role of NGO networks and national platforms. Sonia Brunschwig, Senior Economist in the IMF Offices in Europe, attended the afternoon session, together with World Bank colleagues.

  • Philippe Callier, IMF Resident Representative in Mauritania, participated in a workshop on the Challenges of Globalization in Mauritania on February 3-5. The workshop, held in Mauritania's capital Nouakchott, was organized by the International Confederation of Free Trade Unions (ICFTU) and the Confedération Générale des Travailleurs de Mauritanie (CGTM), a local trade union affiliated with the ICFTU. Other participants included representatives from the United Nations Development Programme (UNDP), the World Bank, and Mauritania's Ministry of Labor.


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Selected speeches

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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 Bretton Woods 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 Rato described his developing perspectives. On the question of how to address the needs of the low-income countries, de Rato focused 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 organizations met 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 meeting of the leaders of the World Council of Churches (WCC), IMF and World Bank took place on October 22 at WCC headquarters in Geneva. The main speakers representing the three organizations were World Bank President James Wolfensohn, IMF Deputy Managing Director Agustín Carstens, and WCC General Secretary Rev. Dr. Samuel Kobia. The meeting was moderated by Cornelio Somarruga of the Caux Initiatives for Change and former President of the International Committee of the Red Cross, and also addressed by Dr. Agnes Abuom, 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 on exploring 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 represented the 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 concluded by 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.

Wolfensohn reiterated 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 was deeply troubled by the WCC's 2002 publication "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.

Carstens reviewed the mandate and role of the IMF, describing its work in surveillance-the regular monitoring and consultation of each member country's economy-and in managing crises. The IMF is charged partly with helping governments to make difficult decisions in difficult times. He noted misconceptions about its role and work. He discussed the Poverty Reduction Strategy process and its origins. He emphasized the progress made through the dialogue process as a result of the hard work of the staffs of the three institutions. 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 issued a joint 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 2004 IMF/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 events were 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 30 townhall meeting with Gordon Brown, U.K. Chancellor of the Exchequer and Chairman of the IMFC; Trevor Manuel, South Africa's Minister of Finance and Chairman of the Development Committee; IMF Managing Director Rodrigo de Rato; and World Bank President James Wolfensohn. 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 Aruna Rao, 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.

James Wolfensohn 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 Mark Plant 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. A country's proposed macro framework might 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.

A questioner from the floor noted that exactly five years have passed since former Fund Managing Director Michel Camdessus said in a speech at the 1999 Annual Meetings that it was time to respond to "the cries of the poor." The panel was asked whether the Fund has indeed responded to such pleas. Another questioner asked whether the IMF is really a pro-poor institution if it took the Fund five years to make statements of commitment to LICs and to include poverty and social impact assessments (PSIAs) in the Fund's work. Staff at the meeting noted that programs supported by the IMF now include such pro-poor elements as specified levels of social or health spending; social components in national budgets; poverty targets; and social goals. Also, the Fund now publicly counsels against wasteful spending such as purchases of presidential jetliners.

Fiscal Affairs Department Deputy Director Peter Heller stressed that although the IMF has been criticized as being overconcerned about inflation, it is the poor who bear the worst effects of runaway price increases. He said the IMF would not agree to 20 percent inflation, which would mean prices doubling every three years. This is because the poor would be the most affected, while those with assets or good incomes usually have hedges against inflation.

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Other CSO policy dialogues

  • An October 1 panel initiated by ActionAid USA, Christian Aid, and World Vision on "Integrating HIV Into Economic Policy Making," discussed three CSO studies on HIV/AIDS issues. Several Fund and Bank staff participated, but CSO attendance was extremely low. The Fund was represented on the panel by Godfrey Kalinga, Division Chief in the African Department and Kenya mission chief. The session followed the release of a Fund response to the ActionAid paper, and focused on the tensions between the health and education needs of developing countries and the budgetary constraints that governments face.

  • World Bank and IMF staff discussed with CSOs the "HIPC Initiative, Debt Sustainability and Other Emerging Issues" at a panel discussion on October 1. CSOs criticized HIPC for failing to deliver on its promises and urged that the debt sustainability framework be linked to the analysis of the financial needs for reaching the MDGs. The Fund was represented by PDR Department Assistant Director Mark Plant.

  • On October 4 InterAction hosted two panel discussions on "Taking Stock of the PRSP Process and Looking toward the Future". The first session focused on the recent evaluations of the PRSP process by the IMF's Independent Evaluation Office (IEO) and the World Bank's Operations Evaluation Department (OED). IEO Acting Director David Goldsbrough spoke. The second panel addressed emerging PRSP issues including process, implementation, and the upcoming 2005 Progress Report. PDR Department Assistant Director Mark Plant presented the Fund's perspective.

  • An October 6 discussion on "Revenue Transparency and the Role of Multilateral Development Institutions" at the World Bank, the International Finance Corporation (IFC), and the IMF, organized jointly with the Bank Information Center (BIC), drew about 50 participants. The meeting addressed the role of CSOs in revenue oversight; the status of the IMF Guide on Resource Revenue Transparency; the Extractive Industry Transparency Initiative (EITI); and next steps on supporting revenue transparency through IFI activities. The Fund was represented by staff from the Policy Development and Review, Fiscal Affairs, African, and Middle East and Central Asia Departments.

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Civil Society-IMF Dialogue:

IMF and World Bank meet with union leaders

IMF and World Bank management, Executive Directors and staff met with leaders of the international labor movement on October 6-8 to discuss a range of issues. The meeting in Washington, D.C. focused on efforts to reduce poverty and achieve the Millennium Development Goals (MDGs); there was also discussion of ways to enhance employment opportunities and social inclusion, and reduce inequalities. The gathering was the second in a biennial series instituted in 2002 (see Civil Society Newsletter January 2003), and built upon a dialogue begun more than a decade ago by the IMF's then Managing Director Michel Camdessus.

The labor union delegation included over 80 representatives of national and international labor federations, which have nearly 200 million members. It was headed by Guy Ryder, General Secretary of the International Confederation of Free Trade Unions (ICFTU), and Willy Thys, General Secretary of the World Confederation of Labor (WCL). Representatives from Global Unions Federations and the OECD's Trade Union Advisory Committee also attended. Willy Kiekens, IMF Executive Director from Belgium, whose constituency includes several European countries, as well as Turkey and Kazakhstan, chaired the main session held at IMF headquarters on October 7. The AFL/CIO hosted the sessions held on October 6, and the World Bank those on October 8.

In his introductory remarks for the session at IMF headquarters, IMF Managing Director Rodrigo de Rato welcomed the dialogue, noting that in many countries organized labor is an important and sometimes indispensable instrument for social change. In a world characterized by fast-moving transformation, countries must adapt, he said. This often requires dealing with such challenges as aging populations, the need to modernize labor markets, and the liberalization of trading systems. The participation of civil society-including labor unions, which are among the oldest and most experienced contributors to the civic process-in these economic and social debates can strengthen the consensus on difficult policy choices; and the IMF has become increasingly aware of the importance of ownership of economic policies. De Rato also observed that strong global expansions such as the current one provide a timely opportunity to undertake reforms, since changes in behavior are easier to bring about during economic recoveries.

The trade union delegation said that despite the IMF's upbeat assessment of the global economy, most developing countries will fail to achieve the MDGs by a wide margin. If progress toward these goals is to be accelerated, the international community must take more ambitious steps on debt relief and consider the various initiatives being proposed-including some form of global taxation-to raise extra funding. They took note, however, of de Rato's observation that the problem with obtaining new resources is political, not technical.

The labor union leaders also stressed that poverty reduction depends on implementing the right policies. In their view, the Bretton Woods Institutions' emphasis on pro-growth, market-oriented economic liberalization is inadequate "because growth is not enough." They argued that too little attention is paid to employment, wages, and social protection; growth must be accompanied by "decent" job creation and an increase in social security and justice.

The union representatives welcomed the more systematic consultations taking place with local unions during the IMF's annual Article IV consultations with individual countries, and on other missions. But they called for greater involvement of local unions in the development of poverty reduction strategies in low-income countries. IMF representatives pointed out that the decision on whom to consult is made chiefly by governments.

Many union representatives said the Fund's recommendations to countries on labor market reform remained a point of contention. They expressed concern that the IMF calls for greater labor market flexibility regardless of a country's circumstances. This, they said, tends to result simply in deregulation and increased social insecurity. The union leaders urged greater consultation with unions to promote a less disruptive restructuring of the labor market.

The union leaders also met with World Bank president James Wolfensohn, who emphasized that labor issues were central to development. He said, for example, that the demographic challenge posed by one billion young people worldwide entering the work force in the near future presents a monumental opportunity-or risk of crisis. Creating productive employment for this generation was key not only to growth, but also to stability and hope, and thus ultimately to peace. On more specific points, Wolfensohn reported that recent World Bank reports promote job creation above all as the key to improving the business climate; and that core labor standards (CLS) are now being promoted by the Bank, though not yet as conditions in its lending. He also welcomed the report of the International Labour Organization's (ILO) World Commission on the Social Dimension of Globalization for its contribution to global policy discussions, noting the Bank's involvement in the production of the report and its continued commitment to following up on its recommendations.

Topics discussed at sessions with staff included IFI policies and programs on trade; Bank-Fund work in low-income countries; labor and employment issues in PRSPs; incorporation of core labor standards into World Bank lending; the report on the Social Dimension of Globalization; the World Bank's approach to social protection; and trade union contributions to meeting the MDGs. Union leaders also met separately with IMF and World Bank Executive Directors.

A more complete summary record of the discussion will be released in the coming months.

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Letters from the Field:

Saturday with the survivors
Kenneth Meyers, former Rwanda Mission Chief (May 2001 - September 2004)

It was a sunny Saturday morning when we left Kigali's asphalt avenues, and bounced for a few minutes across bone-dry, dirt roads to our destination. Waiting for us was Jean Marie, the Secretary of the Fund for the Needy Victims of Genocide and Massacres, with two young men and a young woman. Our first stop was a settlement of 84 "families" (totaling some 400 young men and women) whose relatives, nuclear and extended, had been destroyed in Rwanda's 1994 genocide, as had their hopes for a normal life. The families were groupings of 6 to 8 teenagers, generally aged 15 to 18. Some of the families consisted of relatives (brothers, sisters and cousins), while others had come together with necessity as the only guide.

We walked down the road to one of the houses. We were greeted by a young girl sitting on a step, washing a blouse in a plastic bowl. Another housemate joined us, then a few more, and we entered their home. It was sparse: cinderblock walls, no lights (not even a candle), no curtains, and one rudimentary chair. The two bedrooms were similarly spare-just a mattress on the floor. We were told that this room could sleep five people, sleeping waist up across the mattress. Jean Marie told us that this family was lucky. They at least had a place to call home, a place where they belonged. Ten years after catastrophe struck Rwanda 40,000 genocide survivors still are living day to day with no permanent dwelling.

We spoke briefly with the head of the household that we were visiting. He had finished a vocational training program but had been unable to find work in the past year. When we asked how the family was able to feed itself, we were told, "with the help of God." It seemed that there was a limit to their luck.

We stepped outside and talked with some of the neighboring families about their hopes. "We hope to finish school, to get professional training, to enter the university, if it is possible," one person said. We learned that for those lacking an education, there is little hope. Yet, completing school is no easy task. Without electricity or a candle, the children cannot study after nightfall. Since Kigali is at the Equator, darkness arrives around 6:30 each evening. The teenage family heads do their best, but life is hard for everyone, and the idea of a parent helping the younger children with their homework was far removed from their experience. There are no guarantees for those who do manage to graduate. We were introduced to a young woman with a radiant smile who had recently received a degree from a university in India. She said that she was worried. She had no job prospects. Would she be able to find work? We all assured her that she would succeed. No guarantees.

We said goodbye and set off to a block of buildings further down the road. Here the Fund for Genocide Survivors had built simple homes for widows of the 1994 killings. Some 800 widows and their children (some natural and others acquired out of the moment's necessity) had been settled here. The cinderblock homes, we were told, were put up quickly, and with little supervision. Some of them appeared to be in poor condition; occupants had obviously made improvements to others. We walked up to one of the more attractive dwellings-the windows were curtained and its walls had been painted-and were greeted by a mother. Unlike our previous encounter, there was no warmth in this meeting. Civil, but with a stony stare, she motioned to the small refuge that she had managed to put together. It seemed clear that the dark nights of her past had stolen away more of her life than she could bear. A small room had been turned into simple store, selling soap and other sundries. The store also contained a water tap, firmly secured by a lock. In this parched quarter piped water is for those who can pay. An older widow whom we met on the road, leaning wearily on a staff, explained that she had no family, and the walk to the public water source, a kilometer away, had become a great strain. We had entered the purgatory of the innocent.

The paralyzing spell of the moment was broken by the laughter of children. Mostly ragged, they were, nonetheless, radiant. They spoke the universal language of karate motions and happy cries. A discreet wave to a beaming young boy was returned, timidly, in kind. The IMF mission team members were an exciting curiosity. In this mostly barren world, novelty is entertainment.

When we retraced our steps back to Kigali later in the day, we carried a new window onto a painful piece of humanity. In parting, Jean Marie thanked us. Ten years on, he noted, the outside world had come to see the survivors of the genocide as just another wave in the broad sea of the disadvantaged. "Please," he asked, "help us to be remembered."

Editor's Note: In the period following the 1994 genocide, the IMF actively supported Rwanda in restoring macroeconomic stability and the foundations for economic growth and poverty reduction, including through financial assistance, debt relief, and technical assistance to reestablish its macroeconomic institutions.

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Bulletin Board

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Other recent meetings between the IMF and CSOs

  • David Goldsbrough, Acting Director of the Independent Evaluation Office (IEO), and his staff met CSOs to discuss the IEO's recent evaluation of the Poverty Reduction Strategy Papers (PRSPs) and the Poverty Reduction and Growth Facility (PRGF) (see Civil Society Newsletter August 2004) on August 10. The discussion mostly focused on the IEO's finding that "most PRSPs fall short of providing a strategic road map for policy making, especially in the area of macroeconomic and related structural policies." Goldsbrough also participated in a similar meeting for European NGOs organized by Eurodad in Brussels on September 21.

  • On September 9, Jean-Pierre Chauffour, IMF Representative to the WTO, participated in the International Jesuit Network for Development (IJND) Conference: Debt and Trade: Time to Make the Connections in Dublin, Ireland.

  • The IMF UN Office participated in a September 9 conference in New York on "Country Ownership and Poverty Reduction-The Role of PRSPs in Financing for Development," which was organized by the Friedrich Ebert Foundation in cooperation with the UN Financing for Development Office. The event was attended by representatives of UN member states, civil society, academia, and international organizations. Tsidi Tsikata, Senior Economist at the IEO, discussed the IEO's PRSP/PRGF evaluation. Mark Plant, Assistant Director Policy Development and Review Department, presented the Fund's perspective. He also participated in a panel entitled "Millennium Development Goals, Health, and Development Policy" organized by the World Health Organization in the context of the annual DPI/NGO conference at the UN.

  • On October 13, Andrew Berg, Division Chief PDR, participated in a panel discussion in New York on the theme of remittances by emigrants as a source of financing for development, which was held under the auspices of the Second Committee of the UN General Assembly in the context of Monterrey follow-up.

  • Simonetta Nardin, IMF External Relations Department, participated in the Forum 2000 Bridging Global Gaps conference held in Prague October 15-17. This year's conference focused on "The Role of the Civil Society in a Globalized World."

  • On October 19, Dan Citrin, Deputy Director of the IMF's Asia & Pacific Department met with Oxfam Great Britain's Regional Directors for South Asia and East Asia at IMF headquarters in Washington.

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Inside the IMF

  • IMF Managing Director Rodrigo de Rato appointed Michael Kuhn as Director of the Finance Department to succeed Eduard Brau, who has retired after 35 years of service with the IMF. Kuhn, 54, a national of Germany, has been Deputy Director of the Finance Department (formerly Treasurer's Department) since 1999. He joined the Fund in 1983 and has held senior positions in area and functional departments. Kuhn holds degrees in economics from Golden Gate and Princeton Universities

  • IMF staff has prepared a new factsheet on "The IMF and Civil Society Organizations" ( It serves as a starting point for a number of web pages that are of interest to CSOs and researchers working on CSO relations with the IMF.

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Selected speeches

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Selected publications