Memorandum submitted by Action
Aid
ActionAid UK welcomes the opportunity to submit to
the International Development Committee on the UN World Summit
and IMF-World Bank Autumn meetings. This submission focuses on
some of the key agenda items for the meetings, and proposes questions
we believe could usefully be addressed by the IDC.
With the UK chairing both the G8 and
EU Presidency this year, and with Gordon Brown and Hilary Benn's
prominent roles in the International Monetary & Financial
and Development Committees the UK had an influential role in pushing
forward the development agenda at UN World Summit, and at the
World Bank and IMF Annual Meetings.
UN WORLD SUMMIT
The outcome of the UN World summit was
disappointing, especially in development. G8 pledges on aid and
debt were largely restated, and the Millennium Development Goals
were reinserted into the outcome document text despite US lobby
efforts, but the summit failed to undertake a proper review of
progress towards the goals, or agree actions to support developing
countries - especially in Africa - to get back on track for achieving
the MDGs. From a development perspective, the section on trade
was especially weak, and failed to establish the momentum needed
ahead of the World Trade Organisation Ministerial meeting in Hong
Kong in order to get a genuinely pro-poor deal.
- The UN summit outcome document neglected
to mention the 2005 MDG on gender equality, or note that it has
been missed in over 70 countries. More generally, it lacked a
review of progress towards the 2015 goals - one of the key reasons
for holding the summit - and failed to agree a plan of action
to get countries back on track. Given this, isn't the Secretary
of State for International Development's description of the summit
as a success wide of the mark? What actions is the UK government
taking to revive the MDG agenda?
- The World Summit welcomed the OECD-DAC
2010 targets for aid effectiveness, and commits to further efforts
to untie aid. What efforts is the UK making to push the untying
agenda with other donor countries, and does the government agree
that a comprehensive evaluation of DFID's own experience of untying
would help to make the case to other DAC members?
ANNUAL MEETINGS OF THE WORLD BANK AND IMF
This year's Annual Meetings were dominated
by negotiations on the G7 deal to cancel 100% of debt owed to
the World Bank, IMF and African Development Bank by 18 Heavily
Indebted Poor Countries (HIPCs). The G7 deal was agreed by the
boards, and depending on further work by the World Bank and IMF
could reach implementation by summer 2006, thereby relieving these
countries of up to $1.5bn in annual debt repayments. However,
there are a number of unanswered questions about how truly additional
the relief will be, whether countries will be required to meet
further conditions in order to receive the relief, and how many
more countries can expect to benefit from the agreement.
The Annual Meetings also saw the publication
of the World Bank's review of conditionality. In ActionAid's view,
the review analysis was flawed and the recommendations were conservative,
but at least it established some good practice principles. Despite
commitments at the 2004 meetings, the conditionality review did
not make it on to the main agenda for the Development Committee.
However, the Committee did welcome the report, and commit to annual
monitoring of its implementation.
Debt
- Will the funding for the multilateral
debt deal be 'tranched', for example through IDA replenishment
- raising the risk that it can be suspended if a country is deemed
off track with the Fund - or will it be provided as an irrevocable
one off stock cancellation?
- In order to obtain debt relief,
countries must currently have a Poverty Reduction Support Credit
(PRSC) with the World Bank. Many PRSCs include conditions requiring
countries to privatize services such as water. Given that this
is the case, is the PRSC an appropriate instrument for judging
a country's ability to make effective use of debt relief?
Conditionality
- The Development Committee and IMFC
communiqués refer to the need for sound economic performance
and good governance before countries can become eligible for the
debt deal. What does this mean in practice and does it open the
door to further conditions that might delay urgently needed debt
relief?
- The World Bank review of conditionality
found that half of all countries surveyed reported that the Bank
used conditionality to push its own policy choices. What specific
measures are being taken by the World Bank to address this issue?
Governance
- In recent years, every Annual and
Spring Meetings of the IMF and WB has made reference to the issue
of 'Voice and Vote' without agreeing any concrete actions to address
it. Trevor Manuel, South African Finance Minister and chair of
the Development Committee, has been leading this process but has
now stepped down as Development Committee chair. To make progress,
this agenda needs a change of strategy. What measures is the government
taking to address this?
- Where does the government stand
on the proposal that governance reform of the International Development
Association should be tackled separately from the International
Bank for Reconstruction and Development, perhaps by establishing
an IDA Council?
October 2005
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