Every April they return to Washington, as regular as the cherry blossoms around the Tidal Basin. No, we’re not talking about birds, or tourists, but finance ministers. And protesters.

The occasion is the joint spring meetings of the International Monetary Fund and the World Bank – known as the “semi-annual meetings,” since the September/October meetings get top billing as the “ annual meetings.” More officials come to those meetings, which tend to provide more schmoozing opportunities, but in recent years protesters have prioritized the April meetings.

The largest demonstrations against the IMF and World Bank in the U.S. took place on April 16, 2000, a few months after the famous Seattle WTO protests. Those events, in which the 50 Years Is Enough Network played a leadership role, drew about 30,000 people. The following year, the September meetings were set to draw even more, but were cancelled, along with the official meetings, after the terrorist attacks of September 11, 2001.

Now, in 2005, the IMF/World Bank meetings again fall on April 16. Once again activists have scheduled a number of events for that day and the surrounding days, including a large protest rally and march. It is unlikely we will see as many people as in 2000, but we do anticipate that with the recent confirmation of Paul Wolfowitz as president of the World Bank (effective June 1) we will see spirited events bolstered by activists more identified with the peace movement.

In recent years activists/analysts have called attention to the links between economic domination and military domination, Wolfowitz’s appointment proves the connection. This connection is perhaps best articulated by New York Times columnist Thomas Friedman when he asserted, "The hidden hand of the market will never work without a hidden fist. McDonald's cannot flourish without McDonnell Douglas...And the hidden fist that keeps the world safe for Silicon Valley's technologies to flourish is called the US Army, Air Force, and Marine Corps.” Wolfowitz’s appointment and tenure are cause for alarm.

The Mobilization for Global Justice, the Washington activists’ collective that first formed for the April 2000 demonstrations, is the lead organizer for the protest activities. The theme of this year’s events is “A Better World Is Under Construction”; details can be found at http:// www.globalizethis.org. In addition to the MGJ events there are many other educational events and strategy meetings taking place from April 12 – 19, 2005, a full calendar is available at http://www.50years.org/calendar/. That directs you to the listing maintained on an invaluable website, ifiwatchnet.org, which provides information and links about activism on all the international financial institutions.

The “hot issues” during the upcoming week include the World Bank transition, debt, and the assertion of collective pressure for greater accountability from an international coalition of parliamentarians.

From Wolfensohn to Wolfowitz

Wolfowitz will not yet have taken office, and may try to avoid stealing the spotlight from James Wolfensohn, who is stepping down May 31 after ten tumultuous years as World Bank president. Activists will be keen to insure that the inevitable tributes to Wolfensohn are balanced by reality-based assessments of his record. While Wolfensohn did try more than his immediate predecessors to open up the Bank’s attitudes and reduce its organizational sclerosis, his success was very limited, owing to his own lack of vision, his volatile management style, and a failure to win substantial support from his staff, and, for the last four years, from the Bush Administration.

The result has been a World Bank willing to devote substantial resources to image-making – it spends some $21 million a year on public relations – but is unwilling, or unable, to make many meaningful changes in its policies. Indeed, in recent years it has seemed less interested in establishing its credential as an exemplar of “best practices” and more anxious to reduce its accountability – by watering down its operational standards so that it will be less vulnerable to claims made to its Inspection Panel (which must allege violations of bank policy). Wolfensohn’s Bank has initiated and participated in several high-profile, elaborately-detailed engagements with civil society (the Structural Adjustment Participatory Review Initiative, the World Commission on Dams, and the Extractive Industries Review) only to turn its back on the results when they proved incompatible with business-as-usual.

Wolfensohn’s image-makers are, in the last months of his presidency, attempting to arrange a farewell that will emphasize his ostensible progress in working with civil society. A group of civil society groups it established to advise it on civil society relations, known as the Joint Facilitation Committee (JFC), will be winding up its work just as Wolfensohn does. Its report, financed by the Bank itself, will be issued at the time of the spring meetings. A World Bank-civil society forum, originally designed as a JFC event, will take place a few days after the meetings, from April 20 through April 22. After significant controversy about the JFC’s role arose, it chose to opt out of that organizing role, though most of its members will likely participate. A sign-on letter, initiated by the 50 Years Is Enough Network among others, is circulating among civil society groups to assert the illegitimacy of the event and outline its probable function as a tool for portraying Wolfensohn’s legacy with civil society in a positive light.

It also appears that the World Bank has been pushing some of the civil society groups it talks with to organize receptions to mark Wolfensohn’s departure and his contribution to expanding the development dialogue. One such event is scheduled for Washington in May, and has been the occasion of significant debate since its announcement. It is unclear whether, or in what form, it will go forward.

There will likely be great temptations during the upcoming week, and most likely the upcoming years, to sentimentalize the Wolfensohn era when Wolfowitz takes over. Within the Bank, where Wolfensohn was never enormously popular, the process has already begun. Its internal website for calculating pensions for departing staffers was reportedly jammed on March 31, the day Wolfowitz won approval. And a website and email address set up to gather staff feedback was said to have classified 92% of the reactions to Wolfowitz as negative. Morale at the Bank is not likely to be on the rise soon.

Some NGOs, especially those which pursue regular talks with the Bank, whether in pursuit of information or reforms, seem also to be pessimistic enough about Wolfowitz to begin portraying Wolfensohn in rosy tones. The 50 Years Is Enough Network, among others, will continue to assert its position that, even with someone as objectionable as Paul Wolfowitz as its president, the real problem at the World Bank is less any single person than the structure and ideology that determine its policies.

That said, there are likely to be frequent references to Wolfowitz during the April meetings. He is a very convenient target, especially since his status as one of the best-known symbols of U.S. imperialism makes him such a good match with an institution we accuse of economic imperialism.

Debt

The G7 Finance Ministers are scheduled to meet, as usual, the day before the beginning of the IMF/World Bank meetings – Friday, April 15. The 50 Years Is Enough Network, along with Africa Action, the Religious Working Group on the World Bank & IMF, American Friends Service Committee, and Jubilee USA Network, is participating in an action outside the Treasury Department, where the meeting is usually held (the official announcement of its location is usually withheld until just prior to the meeting). We will also be holding a press conference the day before to publicize our positions on the debt proposals the officials will be discussing.

Beginning with the June 2004 G8 Summit in Sea Island, Georgia, the finance ministers of the most powerful countries of the world have been discussing “up to” 100% multilateral debt cancellation for a number of the world’s most impoverished countries. There is sharp disagreement on how to achieve this goal, however.

Their proposals fall short of debt campaigners’ demands, by restricting the number of countries eligible for the cancellation, and by not explicitly rejecting externally-imposed conditions on the cancellation. But the proposals do go well beyond anything the G7 has discussed before.

No agreement was reached in Georgia or at the IMF/World Bank meetings in October 2004. Subsequent meetings of the G7 Finance Ministers, the most recent in February, have yielded little, but the U.K. and U.S. governments, which have made the most prominent proposals, both informally report some progress in recent weeks.

Although the U.K. government has characterized its proposal as providing for “up to 100% debt cancellation,” it is in fact a pledge by wealthier governments to pay the debt servicing payments owed by impoverished countries on their debts to the World Bank and African Development Bank for ten years. As one critic has pointed out, for loans from the International Development Association (IDA, the very low- interest loan facility at the World Bank), which are payable for 40 years, this amounts to 25%, not 100%, cancellation.

To its great credit, under the U.K. plan, IMF debt payments would be made with money raised from selling some of the IMF’s massive gold reserves – a move that we and many others have been urging for many years. In recent weeks, the IMF has put out a paper endorsing the idea of limited gold sales, increasing the pressure on the U.S., which is resisting any gold sales.

The U.K. proposal, however, requires new funding to be designated by wealthy countries for debt relief – something that the U.S., German, and Japanese governments have all indicated is very unlikely to happen. It also covers only about 22 countries, though the U.K. indicates that number could rise as more countries satisfy IMF criteria (not, in our view, good criteria to satisfy). Most problematically, the debt stock is not actually cancelled: after 10 years countries would resume their debt payments, and thus the power of the institutions is left intact despite their culpability in creating the debt crisis and exploiting it to impose corporate-friendly policies on vulnerable populations.

The U.S. proposal, on the other hand, would completely cancel the multilateral debts of all the countries designated by the World Bank as “heavily- indebted poor countries” – about 42 in all, including such unusual suspects as Sudan and Somalia. It would not require new financing from wealthy countries, but instead would be a true “write-off”: the institutions would cease to expect the scheduled repayments. A number of programs and reserve accounts held by the IMF and World Bank are suggested as sources of cash to balance out the loss of expected resources. Among them is the Poverty Reduction and Growth Facility (PRGF) at the IMF, the source of loans for low-income countries adopting IMF-mandated “structural adjustment” programs.

We count all of these as good things – avoiding the practical difficulties in getting the U.S. Congress and other countries to provide new funding, forcing the institutions to be accountable for some of the damage they have done, and reducing their power by reducing the amount of money they have to lend. Others, however, including both European governments and civil society organizations, are opposed to such a “financing” plan. They see it as a way for the U.S. to weaken the World Bank and other institutions, along with its explicit policy goal of moving the Bank away from loans and toward grants for the most impoverished countries. By thus defunding the Bank, many fear that the scope for multilateral development assistance will be shrunk, and the U.S. will gain more influence over how such assistance is handled, as opposed to the generally more generous European governments.

We are less concerned about those possibilities because we see the weakening of the institutions as a paramount goal, along with 100% cancellation. The U.S. plan would be the best way of accomplishing the former, and the best hope, politically, of accomplishing the latter in a timely way.

The U.S. has thus far declined to commit a comprehensive outline of the plan to paper, something which has made advocating for it difficult. It is particularly reluctant to go into details on the cancellation of IMF debt, saying it wants to combine that effort with a G7 review of whether the IMF should be involved in low-income countries at all (a question we believe needs asking, and answering in the negative). Members of Congress, many of them prodded by the gold mining industry, have made belligerent comments in opposition to gold sales – a move Congress would have to approve. The White House and Treasury Department have therefore publicly rejected the idea of gold sales, which has frustrated efforts both between the U.S. and U.K. and among civil society advocates to reach a compromise position. Gold sales may well be the most talked-about aspect of the debt proposals at the spring meetings.

While we believe that the U.S. plan would go further to liberate more countries from both the diversion of funds and the submission to external demands required by debt, we are concerned that the U.S. will find ways to re-institute control over indebted countries. Both U.S. and Canadian officials have alluded – though not recently – to the possibility of creating a new IMF “facility” which would monitor countries’ economic policies and performance even when they are not taking loans from the IMF. This would effectively institutionalize the IMF’s power even as it phases out its financial commitments in low-income countries, and would mean the indefinite perpetuation of disastrous neo-liberal conditions.

The discussions on these proposals, and on the resistance by other G7 members such as Japan and France to either of them, will continue at the Washington meetings, but will almost certainly not conclude there. For that we will have to wait for the G8 Summit in Gleneagles, Scotland in early July.

Parliamentarians

On Thursday, April 14, a delegation of about six parliamentarians (legislators) from different countries will meet at the World Bank with officials to present the first one thousand signatures on the International Parliamentarians Petition on the World Bank.

For decades campaigners have maintained that the World Bank and IMF undermine self-determination and democratic practice by attaching conditionality and dictating policy to borrowing governments. Often elected national bodies have no say and frequently no information about policies or their implications on the people they represent or their country. In recent years there has been an increased interest in many national legislatures in having oversight and voice in the programs the international financial institutions are implementing in their countries. In many borrowing countries, there is very limited opportunity for legislators to examine or have any say in approving projects publicly funded by the World Bank or regional development banks, or even in ratifying the policies that finance ministries agree to at the behest of the IMF and World Bank. The contradiction between the IFIs’ emphasis on “good governance” and democracy on the one hand and the disempowerment of legislatures when it comes to these important decisions on the other has become more and more obvious. The hypocrisy is particularly apparent when national legislatures are put under intense pressure to pass new laws and regulations demanded by the institutions in order to get access to loans. But it is just as damaging to have the policy reform process or project approvals bypass legislatures altogether.

In borrowing countries, then, this effort is intricately tied to making legislatures full partners in the countries’ decision-making. In donor countries, the effort aims to widen access to the decision-making over how public funds are spent. In most of the donor countries, there is little if any accountability on the part of the governments’ representatives at the institutions, and rudimentary reporting on how the money the governments are budgeting for multilateral aid is actually used. The U.S. Congress is actually well ahead of most other countries in this respect, since it has tried, with varying effectiveness, to insert itself into the decision-making processes at the IFIs in many ways and over many years.

The parliamentarians have some support within the World Bank from those who see the value in more democratic and transparent national political processes. The delegation in Washington will, then, be holding a session or two at the World Bank that includes Bank staffers among the participants. But there will also be a fully public session held on Sunday, April 17 for all those who would like to learn more about the process and about the situations in the various countries represented. If you’ll be in Washington, check the calendar at www.ifiwatchnet.org for details.

The text of the International Parliamentarians’ Petition is brief, and very much to the point:

International Parliamentarians’ Petition for Democratic Oversight of IMF and World Bank Policies

We the undersigned Parliamentarians:

Noting this is the 60th anniversary year of the creation of the International Monetary Fund (IMF) and World Bank - the Bretton Woods Institutions (BWIs);

Recognizing that the IMF and World Bank have voiced a commitment to ensuring individual countries determine their own economic policies;

Noting that key economic policies continue to be imposed by both the World Bank and IMF as conditions for receiving debt relief and new loans, with the Boards of the BWIs retaining the power of veto over all measures including those in Poverty Reduction Strategy Papers;

We therefore call on the BWIs and their principal shareholders to ensure that the democratically elected representatives of recipient nations are the final arbiters of all economic policies in their countries.

It is vital that national parliaments in recipient nations have the right and obligation to be fully involved in the development and scrutiny of all measures associated with BWI activities within their borders, and hold the final power of ratification. Ensuring the primacy of sovereign national parliaments in this way will improve implementation of measures to reduce poverty, enhance good governance, and foster democracy.