IMF and World Bank governance reform: Enabling the international system to meet the challenges of the 21st century
Saturday, 15 April 2023
10 AM – 6 PM (GMT-4)
Open Society Foundations
1730 Pennsylvania Avenue NW, Washington DC
As the World commemorates the 75 anniversary of the Universal Declaration of Human Rights its promises recede as countries struggle to deal with the aftermath of the Covid-19 pandemic, the unequitable spill-overs from the war in Ukraine and rising inequality and global debt. In that context, tensions between the need for coordinated international action and deepening geopolitical competition will likely worsen, with the increased use of development finance as a geopolitical tool. These dynamics will unfold amid a worsening climate crisis, and increased political and social instability and fragility.
In these circumstances, the World Bank and the International Monetary Fund will continue to play a pivotal role in the multilateral response to these multiple crises through their lending, normative roles and agenda-setting power. Yet, these institutions continue to be dominated by the interests of high-income countries in the Global North, while the low- and middle-income countries in the Global South, which are most likely to borrow from these institutions, have limited influence on their governance and decision-making.
In 2023 several significant processes loom at the Bretton Woods Institutions (BWIs) including a review of the IMF quota system, the rechanneling of Special Drawing Rights, the World Bank’s ‘evolution roadmap’ and action on the capital adequacy framework review of the Bank and other multilateral development banks, the main driver behind them being the need to scale up climate finance and improve resource adequacy of these international financial institutions. As pressure mounts to quickly increase financial resources within the international system, it is essential to critically analyse these developments from the governance perspective to ensure a more just distribution of resources and power.
From that analytical point of departure, a full day event has been organised, bringing together concerned organisations and individuals from around the globe, to debate urgent reforms of the BWI’s governance structures required to support an adequate global response to the climate, inequality and debt crises, and to avoid the fragmentation of the multilateral system. The event will consist of interactive discussions by distinguished panellists and will focus on concrete proposals for action required by the IMF and the World Bank.
World Bank Governance Sessions
World Bank evolution roadmap – genuine ‘evolution’ or superficial reform?
This panel will examine whether the World Bank’s ‘evolution roadmap’ as currently developed with a focus on private sector-led development, would result in the reforms required to enable it to meet the objectives outlined in the roadmap and required to ensure an effective global response. The panel will investigate the extent to which the institution’s well-documented democratic deficits, including the process and criteria used for the selection of the next World Bank president, contribute to shortcomings identified in a critical review of the roadmap such as a potential shift away from the needs of low-income countries.
This session will be moderated by American Prospect journalist, Lee Harris and panellists will include: Jax Bongon (Policy Officer of IBON International’s Climate Justice Programme), Uli Volz (Director of the SOAS Centre for Sustainable Finance) and Farwa Sial (Senior Policy and Advocacy Officer at Eurodad). The panel will be followed by a 15 min Q&A session.
The World Bank reform: An opportunity for human rights?
Since 2005, through the DIME program, the World Bank has been conducting impact evaluations of policy interventions to achieve its shared goals of reducing poverty and building shared prosperity. While the evaluations are structured around and linked to the World Bank’s clusters in Sustainable Development and Equitable Growth, to date they lack an integrated Human Rights perspective.
This panel will investigate the impact of the Bank’s programmes on people across the globe and discuss the potential for the development and use of human rights indicators to radically alter the World Bank’s development approach and thus enable it to fulfil its development mandate and bring its policies and programmes in line with its obligations under international human rights law.
The session will be moderated by Carla García Zendejas (Director of People, Land & Resources Program at CIEL) and panellists will include: CP Chandrasekhar (Senior Research Fellow at the Political Economy Research Institute, University of Massachusetts, Amherst, US), Siddharth Akali (Director of the Coalition for Human Rights in Development) and Teresa Nyankonyu Mutua (Senior Communities Consultant at Accountability Council). The panel will be followed by a 15 min Q&A session.
IMF Governance Sessions
IMF and debt: Instability, fragility and the role of SDRs and surcharges
Fragility and social unrest have been rising in recent years and are present across a diversity of country contexts. Fragile states have a limited ability to manage or mitigate social, economic, political, security and environmental risks. Suffering from mounting pressure from debt and inflation, these fragile states are in need of development assistance and stable resources. Even in states not classified as ‘fragile’, the erosion of state capacity to meet the demands of their populations and rise in inequality resulting from a focus on debt servicing exacerbates the risk of domestic and regional instability. This session will explore the links between debt and state fragility and social cohesion, looking at reconceptualising SDRs as a tool for development finance, evaluating the progress of the IMF’s Resilience and Sustainability Trust to date, and exploring the implications of the Fund’s surcharges policy on fragile states.
The session will be moderated by Luiz Vieira (Coordinator of the Bretton Woods Project) and panellists will include: Charles Abugre (Executive Director, IDEAs), Karim Trabelsi (Director of the Tunisian General Labor Union Research Centre), Igor Burakovsky (Chairman of the Institute for Economic Research and Policy Consulting – TBC) and Imène Cherif (Regional Program Manager, Economic Policies for Social Justice at Friedrich-Ebert-Stiftung). The panel will be followed by a 15 min Q&A session.
Quota reform for a more just distribution of power within the IMF
The upcoming 16th general review of IMF quotas comes at a time of intersecting global crises and increased fragmentation of international political consensus, but it provides a unique opportunity to increase the legitimacy of the institution and rebuild trust in multilateralism. Moreover, a quota reform provides a chance to improve the Fund’s resource capacity as currently only 49 per cent of IMF resources come from quotas. The current governance structure of the IMF concentrates formal power in the hands of a few wealthy countries, as a country’s voting power is directly linked to the size of its economy. Advanced economies hold the majority voting power to determine the frameworks for policy advice and conditionality attached to IMF lending. On the other hand, the low- and middle-income countries, which are most likely to borrow from the IMF, have limited influence on its decisions.
The panel will include a discussion on the upcoming review of the IMF quota formula, analysing the previous quota reform, the gaps that remain and what is missing to achieve a more equitable distribution of voting rights between shareholders, particularly focusing on low-income, small, and climate vulnerable countries.
The session will be moderated by Shereen Taalat (Co-Executive Director of the Arab Watch Coalition) and panellists will include: Paulo Nogueira Batista (former IMF executive director and former vice-president of the New Development Bank), Emma Burgisser (Economic Justice Policy Lead at ChristianAid) and Lara Merling (Senior Policy Advisor at Boston University’s Global Development Policy Center). The panel will be followed by a 15 min Q&A session.
Enhancing accountability at the IMF through the establishment of an independent accountability mechanism
The IMF’s mandate has recently expanded to new work areas such as climate, gender and inequality. However, the Fund lacks an accountability mechanism, depriving people and communities negatively impacted by its policies and programmes any recourse and the Fund an opportunity to learn from its mistakes. In this context, a panel discussion will be organised to consider options to address the Fund’s accountability gap. The discussion will centre on Professor Daniel Bradlow’s proposal for the establishment of an independent accountability mechanism at the IMF and will consider the policy and governance changes the IMF would have to undergo to establish the proposed mechanism.
The session will be moderated by Imène Cherif (Regional Program Manager, Economic Policies for Social Justice at Friedrich-Ebert-Stiftung) and panellists will include: Professor Danny Bradlow (University of Pretoria) and Professor Sean Hagan (Professor from Practice at Georgetown University and former IMF General Counsel and Director of the Legal Department). The panel will be followed by a 15 min Q&A session.