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The Spring Meetings of the IMF and the World Bank, April 2002
By Peter Willetts, Professor of Global Politics, City University, London






The Millennium Development Goals and their Implementation

Extra Resources to Meet the Education For All Commitment

The Thirteenth Replenishment of International Development Association Funds

From Doha to Monterrey and Washington

New Moves on Unsustainable Debt

Relations between the Global Economic Institutions and the United Nations

The Way Forward?

List of the main events at the 2002 Spring Meetings.


Links to Further Information



For a similar article on The Fall Meetings of the IMF and the World Bank, November 2001,   click here.

For a similar article on The Spring Meetings of the IMF and the World Bank, April 2001,   click here.

List of Official Websites on the IMF and the World Bank

List of NGO Websites

List of the Bretton Woods institutions.

List of Other Important Organisations in the Politics of International Finance

To see a longer article, for the UNESCO Encyclopaedia of Life Sciences, on the IMF as an intergovernmental institution,   click here.


A shorter version of this article is due to appear in the Social Development Review, Volume 6, Number 2, June 2002. (Currently this is not expected to appear until September 2002.) The review is published by the International Council on Social Welfare.

Copyright Peter Willetts, 2001.
The text of this website is subject to Copyleft - it may be freely used for any non-commercial purpose provided that the author and the website address are cited.


The Spring Meetings of the IMF and the World Bank, April 2002
By Peter Willetts, Professor of Global Politics, City University, London


The Impact of the Monterrey Consensus on the IMF and the World Bank

By Peter Willetts

As usual, the Spring Meetings of the International Monetary Fund and the World Bank for 2002 were held in Washington. The International Financial and Monetary Committee met on 20 April and the Development Committee met the next day. The official meetings were preceded by press conferences by Horst Köhler the Fund's Managing Director and James Wolfensohn, the President of the Bank, launching of major research reports, caucus group meetings for the Group of 7 industrialised countries and the Group of 24 developing countries and a wide range of NGO seminars and campaigning activities. The NGOs covered a spectrum of attitudes. The street demonstrators, led by Mobilize for Global Justice, totally rejected the financial institutions as agents of transnational corporations. However, unlike two years ago, the demonstrations did remain peaceful. The Structural Adjustment Participatory Review International Network held a two-day seminar on five major initiatives to engage with the Bank, with each expressing disillusionment about the Bank's willingness to honour its commitments to progressive change. On the other hand Oxfam saw the Bank's full endorsement of its Global Campaign for Education and a promising start to its new Make Trade Fair campaign. It was a strange bias in the politics of each type of NGO that virtually all their work was targeted on the Bank. Historically, the Fund has been far more ideologically rigid and caused far more economic, social and political harm in developing countries, but it received little attention from the NGOs during these meetings.


The Millennium Development Goals and their Implementation

The Copenhagen World Summit for Social Development in 1995 was crucial in moving social policy up the global agenda. In May 1996, the OECD Development Assistance Committee reviewed the outcome from the major UN conferences of the early 1990s, including the Social Summit. They consolidated the key points from the various declarations into a set of International Development Goals, which defined development in terms of increasing incomes of the poor, delivering primary education, promoting gender equity, reducing infant and maternal mortality, providing reproductive health services and reversing environmental degradation. The IDGs were endorsed in June 2000, at the start of the Copenhagen Plus Five review of the Social Summit, by the heads of UN, the OECD, the Fund and the Bank. In a joint public relations exercise, the four organisations launched a glossy publication, A Better World for All, which elaborated the seven goals as twenty-one indicators for measurement of progress. There is such hostility towards the Bretton Woods institutions (BWIs) that many NGOs, including most notably the World Council of Churches, expressed anger with the UN for collaborating with the Bank and the Fund. Instead of this criticism, NGOs should have celebrated the Fund and the Bank formally recognising the death of the idea that development equals economic growth.

Nevertheless, there was a major political flaw with the Better World report. It had been produced by collaboration between international civil servants, without any public political process. This was rectified when the goals were revised and adopted unanimously as part of the UN General Assembly's Millennium Declaration in September 2000. The debate resulted in some major changes. Halving the proportion of people suffering from hunger was added as poverty-reduction sub-goal and halving the proportion without access to safe drinking water was added as an environmental sub-goal. Provision of reproductive health services was replaced by the goal of reversing the spread of AIDS, malaria and other major diseases. Finally, a new more diffuse political goal, to develop a global partnership for development, was added. It must be a matter of eternal shame to the NGO community that they allowed religious conservatives to achieve the deletion of reproductive health from the Millennium Development Goals, without a major counter-campaign being launched.

In the following year, the UN Secretary-General worked on a report to implement the Millennium Declaration, including the UN promoting its own set of indicators for the MDGs. It should be a matter of sober reflection for NGOs that their political failure was mitigated by Bank collaboration with the UN, which led to contraceptive use being re-established as one of these indicators. At Monterrey, the political setback on reproductive health was overcome by the complex formula of mobilising resources "to achieve the internationally agreed development goals, including those contained in the United Nations Millennium Declaration".

At the Spring Meetings, the World Development Indicators report for 2002 was focused on presenting data for measuring progress with the MDGs. A short supplement, Millennium Development Goals 2002, was also issued alongside the main report. The Bank estimated that there are now 125 million fewer people living in extreme poverty of less than a dollar a day than there were in 1990. Current trends suggest that we will do better than achieving the target of a 50% reduction by 2015. However, most of this progress is in India and China, while Africa will have to grow much faster to even come close to achieving the target. For each of the other targets, countries are classified as likely, possible, unlikely and very unlikely to be successful. The Bank avoids the political problem of reporting on each country and aggregates its assessments to geographical regions. The outlook is grim, particularly for the health indicators. At current rates of progress, none of the targets will be met by all countries in any region. If progress accelerates, the majority of countries, but not all countries, in most regions, might meet all targets, except reducing child malnutrition. In South Asia and Sub-Saharan Africa, this does not apply. It is already clear that the majority of countries in these two regions are unlikely, without "progress at unprecedented rates", to meet any of the targets.


Extra Resources to Meet the Education For All Commitment

The Monterrey Conference had concluded just four weeks before the Spring Meetings and its outcome permeated the proceedings. There was a sense of optimism because an extra $12 billion per year in Overseas Development Assistance was promised by the rich countries, including the first increase for decades in US ODA. A few days before Monterrey, President Bush had announced that the US total would rise from $10 billion in 2003, to $1.7 billion in 2004, $13.3 billion in 2005 and $15 billion in 2006. While this still leaves the US as one of the lowest aid donors, relative to the size of its economy, it was a welcome turning of the tide. There has been an even greater shift in the rhetoric of US policy, with the change being compared to the Marshall Plan to reconstruct Europe and Kennedy's Alliance for Progress. It remains to be seen whether further increases in US ODA will eventually match this rhetoric.

The World Bank staff proposed that between a quarter and a third of these new resources should be devoted to education, in order to achieve by 2015 the MDG of all children completing primary education. A special press conference was called on how to support the Framework for Action on Education for All, adopted at a UNESCO conference in Dakar in April 2000. The potential for change had been demonstrated by Uganda being able to use its debt relief under HIPC to double the number of children in its schools. Wolfensohn announced the Bank would select ten countries for fast-track funding and to learn how best to make a dramatic improvement in the delivery of primary education. The aim was not just to get into school the 125 million children currently not receiving education, but to ensure they stayed in school and completed courses of adequate quality. In a major reversal of policy, Wolfensohn also said the Bank would oppose any user fees being charged for primary education. Finally, in order to act with sufficient urgency, there would have to be some mechanism for donor co-ordination, for policies to be coherent and for all developing countries to obtain an appropriate share of the new resources. The press conference was an inspiring event, with Wolfensohn, the finance ministers from Canada and Britain and the development ministers from the Netherlands and Norway all demonstrating a passionate commitment. Phil Twyford, the Advocacy Director of Oxfam International, was also at the table and was warmly commended for Oxfam's work on the Global Campaign for Education launched in October 1999.


The Thirteenth Replenishment of International Development Association Funds

In mid-2001, President Bush proposed that half the funds from the soft-loan branch of the World Bank, the International Development Association, should be used for grants rather than loans. The idea met with vigorous opposition from most of the other donors, because IDA funding in the future would be substantially reduced if loan repayments were not coming in. There began to be more respect for the US approach after it was announced that the US contribution to IDA would increase by 31% over three years, from $803 million to $1,050 million per year. The matter was not resolved at the Spring Meetings, but the gap narrowed. The European countries agreed that up to 18% of IDA loans could become grants, but the US was still asking for 21%. The British, who had been the most strongly opposed, indicated they might support a significant grant element, if it was used to support the HIPC initiative. The US was surprised to find that developing countries did not support the use of grants, because they also were committed to maintaining a strong viable IDA.


From Doha to Monterrey and Washington

In November 2001 the Fourth Ministerial Conference of the World Trade Organisation launched the Doha Development Agenda. This fed through to Monterrey, which was notable as the first occasion ever that any global body had considered all aspects of mobilising resources for development in a holistic manner. Thus not only domestic savings, foreign direct investment and ODA, but also trade provides development finance. It was clear at the Spring Meetings how much this lesson had made an impact. The Bank's Chief Economist, Nic Stern, emphasised how rich countries subsidise their agriculture by $300 billion a year, which is roughly six times the level of the ODA they provide. Half of the US revenue from tariffs comes from clothes and shoes. Stern argued this is a regressive tax in two ways, within the US in hitting poorer families harder than the well off and globally in hitting developing country exports more than rich country exports. Köhler also separately emphasised the need for advanced countries to phase out trade distorting subsidies and called upon political leaders to confront the special interests who object to competition from developing countries.

On this subject too, Oxfam is pushing the BWIs in a direction they are willing to go. Two weeks earlier Oxfam had launched its second major campaign, Make Trade Fair, with its report Rigged Rules and Double Standards. Their hope is to build a global movement, comparable to the campaign to ban landmines or Jubilee 2000, in order to gain access for developing country exports to Northern markets. The issue is not likely to generate such a broad based coalition as earlier global movements, because some NGOs object to acceptance of any proposals that are compatible with a neo-liberal approach. There will probably be widespread support for the campaign in Western Europe and very limited support in the United States. It is less easy to predict reactions in the South. A few groups have already objected. Walden Bello, Executive Director of Focus on the Global South, immediately wrote an article objecting to Oxfam's approach. He seemed to miss the point that ending subsidies and protectionism in the North would be revolutionary. To the extent that it occurred, it would restructure Northern societies, by reducing food prices. In the North, this would weaken agri-business interests, strengthen small farmers, reduce environmentally harmful intensive production, help poor consumers and end over-production. In the South, farmers would not only gain access to Northern markets, but also the chance to sell in their own countries, without competition from dumping of Northern surpluses. Unfortunately, US policy has actually moved sharply in the opposite direction, with Congress voting in early May to increase US farm subsidies.


New Moves on Unsustainable Debt

In a major speech on the day before the Fall Meetings in November 2001, the British finance minister, Gordon Brown floated the idea of an international procedure for countries to be declared bankrupt and obtained support in general terms from the US Treasury Secretary, Paul O'Neill. Just ten days later, Anne Krueger, the First Deputy Managing Director of the IMF, devoted a speech solely to this topic. She suggested establishing an international legal framework for restructuring of sovereign debt, when the debt burden becomes unsustainable. For a limited period, all debt repayments would be halted and foreign exchange controls established, to allow negotiations between the government and its private commercial creditors for reduction of the debt burden to a manageable level.

Such a scheme would redress one of the great injustices of the debt crisis. Developing country governments have always had to bear responsibility to repay the debt they undertake, but creditors have been under no obligation to acknowledge the burden that the repayments impose on poor countries in a financial crisis. At the moment, there is no procedure to force a bank to take a loss for lending rashly or lending to a corrupt regime. Krueger's idea has been compared to Chapter 11 proceedings in the USA, when a company goes bankrupt and can obtain a court order to suspend its normal obligations, while a financial restructuring is negotiated. The difficulty with a government going bankrupt is that there may be a great variety of debt instruments owed to banks and other investors in many different companies. For the sake of equity between creditors, they must be treated equally. Also, there has to be a voting procedure, so that a majority of creditors can force a reluctant minority to take their share of the loss. For this to be practical, Krueger said "the mechanism must have the force of law universally", which would require the establishment of a regime under the authority of the IMF.

It became increasingly apparent that United States politicians were opposed to such an extension of the authority of the IMF. Finally, on 2 April, just two weeks before the Spring Meetings, John Taylor, the US Under-Secretary of the Treasury for International Affairs, spelt out a totally different option. He proposed instead that all future debt contracts should include clauses allowing the government to initiate a restructuring and for a decision by a "super majority" of the creditors to be binding on any opposing minority. This naive, simplistic approach failed to address four major problems. First, it would only apply to new debt and could have no relevance to existing debt. Second, if the IMF is not going to be used, it will be necessary to create and fund some other institutional mechanism, to provide comprehensive objective data on the scale and nature of the government's debts, along with some process for mediation and conciliation. Third, it offered no escape from the prisoners' dilemma situation, whereby no government would make such clauses mandatory, because each would fear losing their financial status in comparison to their neighbours. Fourth, it did not provide for any overarching process to cover inconsistencies between the clauses in different credit instruments or the differences in the legal frameworks adopted in different countries. The first two problems were ignored and the second two were grossly underplayed. Ironically, although Taylor offered his option as a "decentralised, market-oriented approach", he still had to say that international institutions had an important role in addressing the latter two problems of collective action. He proposed the IMF should offer financial incentives to ensure governments used such clauses in their debt contracts and some new, unspecified, global "arbitration process" should be created to resolve disputes. However, the most important aspect of the response by the US administration is that at no point did any official oppose the idea that unsustainable debts must be cancelled.

While the high-profile public debate was initiated by Krueger's speech, there were several factors that had made this revolutionary idea acceptable. It was clear that all the work by the IMF, since the South East Asia crisis of 1997-98, to create a "new financial architecture", was insufficient to prevent such a crisis re-occurring eventually. At the same time, political pressures from the US Congress and the election of President Bush meant the IMF would be denied the resources to handle major crises: it could not become a lender of last resort, funding unsustainable debts. The evolution of financial markets in the 1990s was making it increasingly difficult to hold voluntary negotiations between governments and creditors, to replace high levels of unpayable debt by lower levels of high quality Brady bonds. The number of creditors and diversity of the types of creditors greatly increased, while the use of some new financial derivatives made some creditors prefer a complete default to taking a specified loss. Events in 2000 showed that, even where negotiations for debt relief could be completed without a crisis and a major financial collapse, the voluntary approach no longer ensured an agreement could be implemented. In the case of Peru's restructuring, a "vulture fund" called Elliott Associates refused to accept the Brady bonds. In June 2000, Elliott obtained an order in a US court for full repayment of commercial loans that it had bought at a massive discount. The Peruvian government was faced with paying up or having the court seize the funds lodged in New York to pay interest due on its Brady bonds. It chose to pay up, leaving everybody except Elliott feeling aggrieved. This case was cited by Krueger as demonstrating the need for a comprehensive legal framework. Finally, the evolution of the Highly Indebted Poor Countries initiative made it anomalous that there was no international mechanism to promote debt reduction for middle-income countries.

Banker's had cheerfully assumed in the 1970s that "countries cannot go bankrupt". The debt crisis of the 1980s led various academics to consider the possibility of some mechanism for developing country governments, similar to the Chapter 11 bankruptcy procedures for companies in the USA. Jubilee 2000, particularly the German Erlassjahr campaign, took up a variant of this idea, based on Chapter 9 for bankrupt municipalities. In Britain, Jubilee Plus continued to work on this issue and in February 2002 published a booklet, Chapter 9/11?, on the "Jubilee Framework" for international insolvency, as a contribution to the debate. Its author, Ann Pettifor, argued for the Chapter 9 approach, because this provides for other stakeholders to have a say and for the debt restructuring process to be transparent. Instead of the government negotiating with its creditors, she proposed the creation of an independent institution to produce a "debt workout plan". This scheme needs translating from a set of progressive principles into practical proposals. As it stands, it is ambiguous whether Pettifor is advocating an "arbitration panel" or an authoritative court "to bind all creditors", and whether each case will result in "an ad hoc mechanism" or come under "an international treaty". There is no discussion of procedures, of financial mechanisms or how to enforce a workout plan upon reluctant creditors.

Krueger sought to carry the debate forward at the Spring Meetings, by producing a pamphlet, A New Approach to Sovereign Debt Restructuring, which elaborated the arguments for and against the different models for a Sovereign Debt Restructuring Mechanism (SDRM) and explored the IMF's role in making it work. The meeting of the G7 finance ministers appeared to come down strongly on the US side of the argument. It adopted an Action Plan that emphasised the market-oriented approach, but admitted there were many issues about the content of the contingency clauses in debt contracts that still had to be addressed. It also supported further work by the IMF on how to establish an international legal regime. With the developing countries having their say in the debate, the IMFC communiqué struck a different balance. It encouraged the IMF to examine both a statutory approach and a contractual approach and to report to the next meeting. This is just the beginning of a long debate, as either approach would take several years to implement. The IMF has come a long way since the debt rescheduling in the early 1980s, when the outcome of negotiations was to preserve all the debt, at increased interest rates: short-term relief was obtained at the expense of a long-term increase in the debt burden. NGO should now engage in this new debate about debt cancellation and ensure that wider economic, social and political issues are put on the agenda, just as they are within domestic political systems.


Relations between the Global Economic Institutions and the United Nations

The Monterrey Consensus had a section on "Addressing systemic issues", which was aimed at enhancing the contribution of monetary, financial and trade policy to development. The section identified a variety of problems with the policy-making process. There is a lack of coherence between the global institutions. This can be answered by strengthening the central policy-making role of the United Nations General Assembly and the co-ordinating role of the Economic and Social Council (ECOSOC). For the global economic institutions to make a greater contribution to development they must give more attention to development issues and enhance the participation of developing countries in their decision-making. However, it was recognised that action at the global level cannot be sufficient. There has to be greater co-ordination in each capital city between the various ministries and there must be assistance to developing countries to build their capacity to participate effectively in multilateral forums.

Some NGOs want to address systemic problems through legal enhancement of ECOSOC, but this is not a fruitful approach. It is often assumed that the Fund and the Bank are outside the UN system, when this is not true. They are both "specialised agencies" as defined in the UN Charter, Article 57. In 1947, each approved an agreement to co-operate with the Economic and Social Council and other UN bodies, as provided for in Article 63. There is widespread frustration within the development community because the BWIs have appeared to impose their own agenda on other UN programmes and agencies rather than being subject to review by ECOSOC. Within the current legal regime, calls for ECOSOC to assert direct control over any of the agencies are pointless. Under Article 63, ECOSOC "may co-ordinate the activities of the specialized agencies through consultation with and recommendations to such agencies", but it has no supervisory authority. In practice, although they are legally autonomous, most of the agencies share bureaucratic procedures, co-ordinate programmes and follow the political agenda of the UN. The Fund and the Bank are less integrated in the UN system, because they are financially independent. No politically-feasible reform of the UN system could establish legal authority or financial control by ECOSOC over WHO or UNESCO, let alone the BWIs. This would require amendment of the UN Charter and the constitution of each of the agencies.

Progress may be made by promoting political, rather than legal, integration and since the early 1990s this has been occurring. First, the Bank moved from seeing development as promotion of growth in a country's GDP, to achieving reduction in the number of people living in poverty. In addition to the long-established funding of the work of other UN agencies, the Bank is now engaged in intensive institutional collaboration with the UN through UNAIDS, the Global Environment Facility, the Global Alliance for Vaccines and Immunisation (GAVI) and the Global Health Fund. The Fund has realised maintenance of the international financial system involves much more than imposing "sound" economic policy on developing countries. Its acceptance of "social safety nets" was necessary to prevent "IMF riots". Following the financial crises of the late 1990s, the Fund moved into increasing transparency in markets, reducing corruption and promoting stronger administrative and legal systems for financial regulation. None of this directly involved other UN bodies, but it did widen the Fund's remit from a narrow focus on economic policy to consideration of social policy and good governance. Collaboration of the Fund with the Bank at the country level has had to increase, because the Poverty Reduction Strategy Papers (PRSPs), which provide the framework for its lending to the poorer developing countries, have to be prepared in conjunction with the Bank. One indicator of their engagement in politics is that, starting in 1998, there has been a special meeting of ECOSOC to receive reports from the Spring Meetings. Usually, this has occurred the day after the Spring Meetings close and the Managing Director of the Fund, the President of the Bank, and the ministers chairing the two committees have attended. The heads of the institutions also have a dialogue with ECOSOC at its regular summer session.

The texts of the 1947 agreements between the BWIs and the UN suggest a symmetrical relationship. They provide for exchange of information and representation in each other's meetings. These provisions are not fully implemented, but they should be activated vigorously. The UN Secretary-General and the President of ECOSOC should attend both the Spring and the Fall Meetings every year. Not only the Spring Meetings, but also the Fall Meetings, should report to ECOSOC. At the moment, this is not easy to do because ECOSOC does not normally meet in September and the UN is dominated by heads of government and foreign ministers participating in the General Debate of the General Assembly. However, this situation should be seen as an opportunity rather than an obstacle. If the UN is serious about enhancing its role, the General Assembly could halt work for two days and a high-level special meeting of ECOSOC could discuss the work of the Fund and the Bank.

The 2002 meeting with ECOSOC was held the day after the Spring Meetings and was attended by Trevor Manuel, Chair of the Development Committee; Eduardo Aninat, Deputy Managing Director of the IMF; Shengman Zhang, Managing Director of the World Bank; and Nacer Benjeloun-Touimi, a Senior Adviser at the WTO. After the opening speeches, it broke up into informal discussions. While it did serve to maintain the momentum from Monterrey and strengthen UN-BWI relations, nothing new was added to the global debate on development. One panel requested that in future years the issues for discussion should be more specific. It was also noted, indirectly, that there was a mismatch between the engagement of civil society at Monterrey and their absence from policy-making in the economic institutions. The level of participation and the outcome did not begin to match the call from Monterrey for this meeting to "address issues of coherence, coordination and cooperation".

The real anomaly in the global system is the position of the WTO. It is not a UN specialised agency and it does not operate as a normal diplomatic institution. It does not have a coherent policy-making process. The secretariat is politically weak and understaffed. The organisation lacks sufficient resources to run its own technical assistance programme adequately. There are no provisions for participation by NGOs. It is more surprising that the WTO's Trade Negotiating Committee was unable in April 2002 to agree rules for participation by staff from the Fund, the Bank and UNCTAD, as observers in the Doha Round. The WTO is so secretive and opaque that even its members call for "internal transparency", so that delegates of small countries can know what is happening in their name. Although it is a one-country-one-vote institution, its decision-making to date has been dominated by negotiations between the United States and the European Union. Developing countries have only had any impact at the Ministerial Conferences. At its simplest, the countries without any mission in Geneva cannot hope to exercise any influence on the WTO committees and those with small missions have to select their priorities carefully. All this is slowly changing and the Doha Development Agenda will not be completed unless further substantial change occurs, to make the WTO a more efficient and more legitimate organisation. One major requirement is that it must establish arrangements for other intergovernmental organisations to have observer status, so that it can co-operate with them. It is ridiculous that US opposition to relations with the Arab League prevents the WTO working with the Fund and the Bank. At least the WTO was represented at the ECOSOC meeting and is now committed to attending every year. This is but the first step towards the Monterrey goal of systemic integration. The end result must be the WTO becoming a full UN specialised agency.


The Way Forward?

While it is understandable that developing country diplomats and NGO development activists focus on strengthening ECOSOC in relation to the IMF, the Bank and the WTO, this is really ignoring the two main problems. One was highlighted at Monterrey: in virtually all countries, there should be greater co-ordination between trade and finance ministries on the one hand and development and foreign affairs ministries on the other hand. The Monterrey Consensus should have gone further. If we are to have sustainable development, then social and environmental ministries should also have an impact on policy-making for trade and finance. At the moment, the Development Committee is totally dominated by finance ministers and only a few European countries send their development minister. NGOs should campaign in the capital cities for all countries to be represented by both their development minister and their finance minister at the Spring and Fall Meetings, with the development minister being the head of the delegation to the Development Committee. Ideally, there should in addition be at least one senior person from the health, education, social welfare or environmental ministries. NGOs should also campaign for parliaments and civil society forums to discuss the items on the official agenda of both the IMFC and the Development Committee, immediately before they take place, so that ministers have to take into account the wider issues. The Fund and the Bank are now sufficiently transparent that the relevant policy papers are available on the web in advance of the meetings.

The second great problem is taboo in the world of diplomacy. The United States is so culturally different from the rest of the world that most global policy-making revolves round the rest of the world trying to curb US isolationism and/or US unilateralism. At the same time the US economy is such a large proportion of the global economy that co-operation with the US government has to be maintained, at least on economic issues. The real constraint on the relations between the Bretton Woods institutions and the UN is the veto held by the US Treasury over all aspects of their work. The veto operates at three levels. Firstly, the US can veto any new policies and any change to the Articles of Agreement of the institutions. Secondly, the US can veto any new funding for the IMF and the IDA, because there are no provisions for voluntary funds. Thirdly, by its control over funding, the US can veto the loss of its veto. Thus, Fund and Bank staff can only redefine the nature of structural adjustment, develop new policy initiatives or co-ordinate with ECOSOC to the extent that the US government allows them to do so. US NGOs should be targetting the US media and the US Congress as much as the BWIs. European and developing country NGOs should be providing US NGOs with documentation on exactly how US Treasury and congressional decisions are causing harm in their countries. Perhaps they should also be lobbying US embassies and trying to mobilise American voters who have family links overseas.

The boundaries of change can be pushed forward when some issues resonate within the US political system. Currently, UNESCO, the World Bank and Oxfam are hoping for dramatic progress in the field of education and this does accord with US values. In the aftermath of the terrorist attacks on 11 September 2001, there is some recognition in the US of the need to deal with the conditions which generate terrorism and this is being expressed in increased levels of US aid. Finally, the Trade Justice Movement is strategically important as it is attacking US vested interests with their own rhetoric of free markets and trade liberalisation.

For more information on the Fund and the Bank, see the previous articles by Peter Willetts, in the Social Development Review, June and December 2001.

Peter Willetts is Professor of Global Politics, City University, London.


List of the main events at the 2002 Spring Meetings.

Wednesday 17 April

  • Horst Köhler, IMF Managing Director, speech to National Press Club, Washington DC.

Thursday 18 April

  • Kenneth Rogoff, IMF Research Director, launches World Economic Outlook.

Friday 19 April

  • Press conference with James Wolfensohn, World Bank President.
  • Meeting of the Group of 24, the financial sub-group of the G77 developing countries – followed by a press conference.

Saturday 20 April

  • Press conference with five African finance ministers.
  • Nick Stern, World Bank Chief Economist, launches the World Development Indicators.
  • Meeting of the G7, the leading Western industrialised economies – followed by a press conference with Paul O'Neill, the US Treasury Secretary.
  • Meeting of the International Monetary and Financial Committee – followed by a press conference with Gordon Brown, the IMFC Chairman and Horst Köhler, IMF Managing Director.
  • Main "Mobilize for Global Justice" demonstration (merged with Middle East peace and Colombia Mobilization demonstrations).

Sunday 21 April

  • World Bank Press Conference on the Education for All programme
  • Meeting of the Group of 10, the G7 countries, plus Belgium, the Netherlands, Sweden and Switzerland.
  • Financial Sector Reform and Strengthening Initiative (FIRST) Press Conference
  • Meeting of the Development Committee – followed by a press conference with the Chairman, Trevor Manuel (South Africa), and James Wolfensohn, World Bank, President.

Monday 22 April

  • Special high-level meeting of ECOSOC with the Bretton Woods institutions, in New York


Copyright Peter Willetts, 2002.

The text of this website is subject to Copyleft - it may be freely used provided that the author and the website address are cited.

Page created on 7 August 2002.

Centre for International Politics, School of Social Science, City University, Northampton Square, London EC1V 0HB.
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Last updated on 7 August 2002.