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dam-l LS: NGO PR on Congress Panel on IMF/WB
FOR IMMEDIATE RELEASE
CONTACT: Andrea Durbin or Carol Welch, Friends of the Earth:
202-783-7400 or via cell 202-744-8048
Jo Marie Griesgraber, Center of Concern: 202-635-2757, ext. 126
Joanne Carter, Results: 202-783-7100
Deborah Rephan, Environmental Media Services 202-463-1310, ext. 267
Congressionally-appointed Panel Acknowledges Failures of IMF and
World Bank to Help the World's Poor, But Lack of Accountability
Remains Unanswered
WASHINGTON, DC, March 7, 2000 - A coalition of development and
environmental advocates today said a new report by a Congressionally
appointed commission is a welcome acknowledgement that the
International Monetary Fund (IMF) and World Bank Group are largely
failing in their mission to address world poverty and economic
stability, and need major overhaul. However, the groups say that
while the report contains some laudable recommendations, it fails to
address other key fundamental problems.
According to the report, written by a panel of economists headed by
Allan Meltzer, the failures of the World Bank Group and IMF can be
traced to "overlapping missions," "ineffectiveness, corruption, and
waste of resources," and failure to develop successful regional
programs in agriculture, forestry, environment, health care, and
other sectors - among other problems. But while the Commission also
said "lack of transparency and accountability" contributed to this
failure, it did not offer any reforms to address this problem.
"The Meltzer Commission report gives further weight to the growing
evidence that these institutions have caused serious social and
environmental damage to those nations they should be assisting," said
Carol Welch, International Policy Analyst for Friends of the Earth.
"However, until the IMF's chronic lack of accountability and
democracy are also dealt with, any reforms are unlikely to have a
lasting positive impact."
For example:
… The IMF's lack of accountability and democracy, combined with US
dominance of the institution, has made the IMF an agent of Wall
Street, rather than an enabler of global stability and prosperity.
The groups say an independent evaluation unit and an ombudsperson are
essential requirements for an overhauled IMF, as is true
participation of IMF borrowers in the institution's governance.
… While the Commission rightly identifies structural adjustment
lending as a function of the World Bank Group and not the IMF, it
fails to call for more oversight and attention to the environmental
and social implications of this function. Currently the Bank does
not conduct environmental or social assessments for these programs,
despite more than a decade of research that clearly demonstrates
their negative impacts to poor countries.
… The Commission finds correctly that the World Bank Group should
restrict its financial support to sectors that have a direct and
demonstrable connection to poverty alleviation and sustainable
development. However, it overlooks a number of important sectors
that can help fulfill this mandate in environmentally and socially
beneficial ways. These include investment in renewable energy and
efficiency programs, education, improved urban living conditions, and
combating pollution.
The groups supported the Commission's recommendations that the IMF's
structural adjustment lending program be eliminated, stressing that
the IMF is not equipped to provide poor countries with long-term
development finance and capacity building. They also endorsed the
Commission's call for immediate debt cancellation for the poorest
countries. Finally, the groups backed the Commission's call for
elimination of the Multilateral International Guarantee Agency
(MIGA), the World Bank's private risk insurance arm, saying the World
Bank's development mandate should not be confused with that of
supporting the private sector or providing risk insurance to
companies.
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