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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.

++++++++++++++++++++++end editor's note+++++++++++++++++++++++

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 info@50years.org 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.

AfricaFocus Bulletin can be reached at africafocus@igc.org. Please write to this address to subscribe or unsubscribe to the bulletin, or to suggest material for inclusion. For more information about reposted material, please contact directly the original source mentioned. For a full archive and other resources, see http://www.africafocus.org


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