Memorandum submitted by World Vision
Poverty Reduction Strategies, the overall country
strategies are designed to tackle poverty with country specific
policies. Currently, most developing countries are designing and
negotiating their 2nd generation PRSPs (or the equivalent) With
the World Bank and IMF.
World Vision has been engaging with the review
process, and based on extensive research in Bolivia and Zambia
World Vision designed a number of recommendations for considerationprimarily
around the needs of accountability and civil society engagement
at the time of planning and implementation of PRS. What was agreed
in principle now needs to be implemented in practice, pressure
now needs to be put on the World Bank and the IMF from the UK
government and other EU governments to ensure these changes happen
and promises are met.
Making the second generation of PRS more effective
is not only vital in development terms, but is also politically
salient, particularly as issues of aid effectiveness are likely
to raise to the fore as aid flows are increased substantially
in coming yearsfollowing recent G8 and EU commitments.
In response to the inquiry by the Treasury Select
Committee World Vision would like to raise concerns about the
space given by the IMF for dialogue around macro economic framework
that supports the implementation of PRSPs. One of the areas that
need to change is the space available to civil society and parliamentarians
to negotiate around the Poverty Reduction and Growth Facility.
This submission will address the financial relationship of the
UK with the IMF and the funding agreements of IMF.
1. Negotiation space around this needs to
be opened up as part of the PRS process, currently the dialogue
process for the PRSP is not able to change the PRGF framework.
This means that there is greater dialogue on the micro-part and
not the macro, which is already fixed, creating a bottleneck.
To say that the PRGF is drawn from the PRSP is not the same as
the PRGF dialogue taking place together with the PRSP or at some
point within the PRS cycle that feeds into the PRS process. PRGFs
have a strong trigger/signalling effect on the behaviour of other
donors, despite the size of funding under them.
2. Currently the IMF provides analysis in
the PRGF to the country government, which determines the budget
for a number of donors categorising the priority sectors with
which the country should be concentrating on. It is not about
giving greater discussion between the country government and the
IMF country representative on the budget. The issue is that the
IMF needs to be making available the information for dialogue
and consultation to all. The analysis of the IMF, which takes
into account impacts of inflation rates/bank rates and resource
mobilization for MDGs, need to be made available for dialogue
to interested stakeholders within country allowing greater transparency.
3. When we speak of greater "dialogue"
it may not always include civil society organisations, but transparency
on what those issues are, especially the underlying policy assumptions
that are being used to come up with policy options and their links
to poverty reduction. Most civil society organisations can adequately
engage with the assumptions rather than the economic detail, which
the IMF plays, this could be a function that donors could play.
4. The demand by civil society organisations
on governments and the IMF to make this process more transparent
and create dialogue around the results and analysis made by the
IMF is very high. This has become increasingly apparent now that
the issue of mutual and domestic accountability has been brought
to the frontline of international negotiations eg the UN Summit
resolutions, the Paris Declaration, the Africa Partnership Forum
etc. The 2005 PRS review itself projects a strong emphasis on
balancing accountabilities by working more domestically. Macro-economic
dialogue is a significant part of this accountability framework.
5. Equally critical is addressing IMF staff
behaviour, including their lack of attendance at PRS thematic
group dialogue meetings and donor meetings, reliance on donor
missions from Washington to review PRGF and other macro-economic
issues within few days. CSOs deplore the lack of adequate time
to prepare for these meetings and mostly even lack of knowledge
of their coming into a country This is not just about government
failure but transparency on both government and IMF part.
6. Strong governments need strong civil
society and parliaments which are able to exploit their comparative
advantage eg in the area of addressing rights and voices of the
marginalized groups, such as children and women. This will support
greater opening of space for dialogue, without undue fear of "sensitive
areas", as alluded to in the PRS report. Training is also
not adequate, a genuine "capacity development" approach
would also enable the IMF staff themselves to learn the politics
of interrelationships and negotiations among government, civil
society, parliaments, donors and the private sector at country
level, instead of limiting themselves to macro-economic formulae,
as a technical project. Examples of good practice are emerging
in countries such as Tanzania and Mozambique. This should be about
capacity building and not "technical assistance".
7. This means that donors have to invest
in either more IMF staff in each country, with an exit strategy,
and linking IMF staff skills to available in-country skills with
civil society organisations and research institutes to develop
a multiplier effect.
8. Donors should invest in capacity to demystify
macro-economic policies in working with both government and civil
society. However, civil society would add value to this by enabling
such information to reach citizens at low cost, for example the
case where the Civil Society for Poverty Reduction in Zambia was
able to communicate their government's Memorandum of Understanding
with the IMF. This should, however, not be about only the decisions
already made but including debates on the assumptions and options
included in the PRS dialogue at different stages.
9. Tools such as the poverty social impact
analysis that the World Bank, IMF and donors such as DFID are
using to assess the impact of economic policy on the poor need
to be opened up for dialogue with the countries civil society
and parliament. So that they are sufficiently tailored to there
71 Tembo, Dr Fletcher/World Vision UK, "Poverty
Reduction-are the strategies working?", 2005-World Vision
UK research based on case studies of Zambia and Bolivia. Back