IMF and World Bank ignore NGOs, new study says

WASHINGTON,May 26, 2004(IPS/GIN) — Attempts by civil
society groups to influence policies at the World Bank and
the International Monetary Fund (IMF) under a controversial consultation programme have been mostly fruitless, a new study says.

Those groups might have to demand that their input be
taken seriously if they still intend to influence the
process, known as the Poverty Reduction Strategy Paper
(PRSP), adds the report, ’Rethinking Participation’, by
ActionAid USA and ActionAid Uganda.

"The high-profile effort to use ’participation’ rhetoric to get citizens’ groups to stop protesting in the streets and sit down at the table has now run aground because, after four years of attempted participation in the processes, no major policy changes have resulted in the key World Bank and IMF loan conditions," it says.

But a senior World Bank official told IPS the results were actually mixed, and that there had been cases when civil society groups and labour unions participating in the PRSP process influenced borrowing countries despite the advice of the Bank and IMF.

The process also gave groups unprecedented access to
policy-making in developing countries, he added.

A PRSP is a roadmap of a country’s macro-economic,
structural and social policies and programmes that is
submitted to the World Bank and the IMF before a
government can receive funding. Designing those plans is
supposed to be a "participatory process" that includes
civil society and development partners, as well as the two lenders.

Borrowing countries need to submit a PRSP every three
years to qualify for assistance from the Washington-based institutions.

According to the World Bank, as of Apr. 30, some 37
countries have submitted PRSPs, including Burkina Faso,
Benin, Ghana, Mozambique, Vietnam, Armenia, Bolivia,
Bangladesh, Yemen and Pakistan. Some 48 others have
submitted their initial plans, a watered-down version of
the PRSP.

But the Papers, which are supposed to emerge from a
government-led two-year process that includes "town hall
meetings" with citizens’ groups and non-profit agencies,
are now seen as designed to reduce global protests against
the Bank and IMF, charges the new report.

Their critics accuse the two bodies of pressing policy
changes on borrowing countries via the loan conditions
that are included in the PRSPs, a charge the two lenders
deny.

Those loan conditions are based on a set of free trade and
free market-oriented reforms, including privatisation,
deregulation and financial liberalisation, and removal of
trade protection for domestic companies , all of which
contribute to Third World poverty, the critics add.

The World Bank and IMF contend that the PRSPs are
homegrown and that governments ultimately decide whose
advice to take when designing their economic programmes.

"It is entirely possible that we have in the context of
our advisory relation to governments advised them to do
things that civil society interlocutors might feel were
not in the best interest of the country or the government
but it’s really the government that’s left to decide,"
said John Page, director of the Poverty Reduction Group at
the World Bank.

The ActionAid report also charges that the PRSP process
has been structured so that borrowing governments will
limit their plans to those they know will be approved by
the executive boards of both the IMF and World Bank.

"There is a lot of evidence to suggest that borrowing
governments are self-censoring themselves and what they
permit to be discussed in these consultations," said Rick
Rowden, a policy analyst with ActionAidUSA and a co-author
of the new paper.

"They don’t want citizens’ groups coming up with all
kinds of alternative economic policies that they know the
World Bank and IMF will never accept, and they don’t want
any alternative policies to make their way into the
national PRSP strategy paper or else the paper might get
rejected by the World Bank and IMF and jeopardise their
access to more loans."

But Page said the two institutions are far more flexible
in their demands and do allow inputs from civil society.

"It’s true, obviously, that governments know the
perspective and the point of view of the Bank and the Fund
but it isn’t the case that they have to subscribe in
detail to every view that’s expressed by the Bank in order
to have their PRSPs considered favourably and endorsed by
the board," Page said in an interview.

He cited trade liberalisation as an example where most
PRSPs were influenced by civil society groups, which
generally favour gradual — if any — liberalisation,
rather than by the pro-liberalisation bent of the two
lenders.

Most PRSPs are silent about the role that trade will play
in poverty reduction and do not put forward ambitious
programmes for changing a country’s trade policy, added
Page.

"I’d say that those are cases in which governments have
tended to listen to their own business community, to their
labour movement, or to their civil society much more than
they listened to the Bank and the Fund," he said.

But ActionAid argues that governments appear to be
allowing civil society groups only minimal influence on
the PRSP process.

When Angolan groups met in June 2001 to organise their
input into that government’s plan, for example, they
complained that officials seemed reticent to organise a
consultation. The only PRSP workshop open to them was
confined to social matters rather than "macroeconomic" and
other structural adjustment policy issues, which are
considered to be the ones that can most influence poverty.

Many groups in developing countries, such as Honduras,
Vietnam and Uganda, report that they were barred from
participating in discussions about macroeconomic and
structural policies during the official PRSP
consultations.

A May 2003 report by the Centre for Latin American
Research and Documentation noted, "the participation of
Bolivian civil society in the definition of macroeconomic
programmes is virtually nil, above all with reference to
the PRGF (an IMF offshoot of the PRSP)".

But Page said the reality on the ground is far more
complex than ActionAid describes.

"The experience has been so varied that in many cases
there has been an opening into the PRSP process and I
think that most civil society groups would say that it
never existed before in the area of policy-making."

Though imperfect now, that participation will have
long-term implications, he added.

"This process of observing the participatory process,
evaluating it, having the boards of the Bank and the Fund
discuss it and then feeding that information back will
result in a deeper and more durable participatory
process," he said.