Stalemate at World Bank and IMF annual meetings

Last weekend the World Bank and International Monetary Fund held their annual meetings in Washington DC, where several debt-related issues were on the agenda.

Ending harmful conditions
Douglas Alexander, the UK Secretary of State for International Development, said before flying to Washington that he would argue against forcing poor countries to privatise and liberalise basic services – one of the demands of our campaign against the conditions attached to World Bank lending and debt relief.

Officials echoed his sentiments at the meetings, but real progress was thin on the ground. We are now waiting for a World Bank review of its policy, due out in mid-November, which will look at what progress the Bank has made in this area in the last two years. Campaigners are sceptical that changes have actually taken place in the field – in 2006 research by ActionAid found that for the most part it was "business as usual" with World Bank staff routinely attaching economic policy conditions to their projects and programmes.

Governments will come together at meetings in November and December to discuss funding for IDA, the wing of the Bank that lends to the poorest countries, so there is still time to keep up the pressure .

Liberia
There was also stalemate on the urgent need to clear Liberia’s arrears at the IMF – which needs to happen before it can qualify for debt relief under the Highly Indebted Poor Country (HIPC) initiative. The International Monetary Fund failed to reach agreement on an outstanding amount of $60 - $90 million that needs to be funded.

Whilst countries blamed each other for the impasse, the impoverished people of Liberia continue to suffer from a huge debt burden, most of which is illegitimate debt, having been run up under the brutal regime of Samuel Doe, with no benefit to the people.

The ONE Campaign in the US has an email action to the IMF .

Vulture funds
New figures presented to the annual meetings showed that vulture funds and other commercial creditors are suing poor countries for a staggering $1.8 billion, but the IMF's statement on Saturday was fairly bland, expressing "concern" for the problem.

Meanwhile, the Finance Ministers of the Heavily Indebted Poor Countries gave a press conference on Sunday where they called for action to improve debt relief mechanisms, tackle their countries' long-term 'debt sustainability' and help them to tackle poverty. In particular they urged that measures be taken to tackle vulture funds.

Jubilee Debt Campaign and others called for expressions of concern to translate into concrete action to stop the vultures profiting from debt relief.

Illegitimate debt
The World Bank’s recent paper on Odious Debts was also under fire from activists, who accuse the Bank of failing to take seriously the arguments for cancelling odious and illegitimate debt. The paper is largely dismissive of the concepts, instead calling for the international community to focus on future responsible lending.

While it is crucial to develop standards for responsible lending, these will not have any real meaning if they aren’t also applied to past loans, and the debts cancelled that have accumulated as a result of odious or illegitimate practices. Jubilee Debt Campaign and others are calling for an independent peer review of the study, so that its findings can be critically assessed by experts in the fields of law, economics and political science.

Sarah Williams, Jubilee Debt Campaign’s Policy and Campaigns Officer, reports on what happened in more detail via the Jubilee Debt Campaign blog.