Examination of Witnesses(Questions 140-141)|
THURSDAY 27 JUNE 2002
140. Do you share the concern that the World
Bank can only lend to other governments? In other words, government
to government relationships. Here we have the social element in
the country, the need to ensure that we are responsive, and it
is a government to government element.
(Professor Miller) On that point, there is a recent
study by Nancy Birdsall and John Williamson referred to in my
submission on delivering on debt relief, and they made the point
that if governments are not reliable or are unable to manage resources
well, the money would not go through the IDA via governments but
should be financed and managed by United Nations specialist agencies,
and also work with the NGOs. So if the government is not reliable,
one should send it on somewhere else.
141. What should be the number one issue in
Mr Kohler's in-tray?
(Mr Wilks) He needs to get a grip on the legitimacy
crisis that the IMF faces with many key constituencies. This is
the root. The legitimacy is a function of governance and how its
activities day to day are perceived by many people. At the root
of many of the specific instances of the IMF causing problems
in the real world and on the ground is the fact that it is inadequately
governed; it is becoming more transparent but it is not transparent
enough for everybody; and it is still claiming to do more things
than it can actually deliver. I think the crisis over legitimacy
should be at the top of his list.
(Mr Wallis) From us, clearly poverty reduction, and
really getting serious about the Fund's effects on poverty reduction,
which means getting out of liberalisation conditionality and understanding
the effects of what it calls for on public spending.
(Professor Vines) Dealing with sovereign debt crises.
A Fund which plays its role in helping to solve both of the two
problems described but has not solved the issue of how to deal
with Brazil and how to deal with others in Argentina's position
is leaving the world without the protection that only it can give
the world, and to have not enough to say about Brazil is his major
(Professor Miller) As David Vines says, perhaps getting
more clarity on the issue of whether to have the US Treasury's
approach followed or whether to go down what the IMF itself has
put forward would be very helpful.
Chairman: Can I thank you very much for
your attendance. It was fascinating and has given us an awful
lot of meat for our session next week.