IF-EYE Issue 2
27 February 2006
Read the second issue of BIC's new monthly newsletter: the IF-EYE!
Issue 2, March 2006
Welcome to the second issue of the Bank Information Center’s new publication: the IF-EYE. The IF-EYE will provide timely updates on key developments and debates taking place within the World Bank, other international financial institutions (IFIs) and civil society. A monthly publication of the Bank Information Center, the IF-EYE will also disseminate information on events and publications.
Thanks to everyone who sent feedback on our inaugural issue. Please continue to send comments to Karen Showalter at BIC:
In this issue
- IFI Highlights
- Wolfowitz Watch: New developments and highlights from Town Hall meeting with bank staff
- Word on H Street: Rumored staff changes at the World Bank
- Issue Spotlight: Debt Relief
- Network Spotlight: IFIwatchnet
- Ask BIC: What is the MOS?
- Book Notes: Summaries of: IMF - Wrong Business Model or Wrong Business?; Reforming the World Bank; Report on the World Bank’s Whistleblower Policies
- Announcements and Resources: World Bank Civil Society page now in four languages; new World Bank Senior Management webpage; World Bank Spring Meetings; IDB Annual Meetings; ADB Annual Meetings, EBRD Annual Meetings
- New at BIC: BIC is seeking summer interns!
Complete text below.
- World Bank: IFC Board approves new social and environmental standards. February 21, 2006. International civil society organizations have called the IFC’s new approach a risky experiment that could leave the people and environments affected by its projects more vulnerable than they were before. One bright spot of the new standards is that companies that borrow from the IFC will need to abide by core labor standards as defined by the international Labor Organization. The significance of the radical political overhaul applies not only to the IFC but also to close to 40 Equator Banks that have agreed to adhere to IFC social and environmental standards. New policies will be released by March 15.
- Read civil society press release: http://www.bicusa.org/bicusa/issues/international_finance_corporation/2650.php
- Read ICFTU Press Release at: http://www.icftu.org/displaydocument.asp?Index=991223448&Language=EN
- World Bank: World Bank releases CAO report on the DRC mine. February 02, 2006. After awaiting clearance from the World Bank President’s office since October 2005, the CAO today released its audit of MIGA’s due diligence of the Dikulushi copper-silver mine in the Democratic Republic of Congo. Read the CAO statement and audit report, and associated news article at:
- EIB: European Commission and the European Investment Bank (EIB) to establish trust fund to provide aid to Africa independent of the World Bank. February 9, 2006. The European Commission will initially provide 60 million euros ($72 million) and the EIB in 260 million euros in loans to the fund.
Visit the Wolfowitz Watch website: http://www.bicusa.org/bicusa/issues/wolfowitz_watch/index.php
New this month:
Town Hall Meeting with World Bank Staff
February 6, 2006
The President’s opening remarks at the February 6 meeting touched on the recent staff survey, his prioritization of the poorest nations and sub-Saharan Africa in particular, and the institution's relationships with middle-income countries like China, India and Brazil. He also took questions from staff based in Colombo, Dacca, Bucharest, Freetown, Rabat, Lima, Tbilisi and Washington DC.
- On the recent uproar over several senior level and advisor appointments: "Let me say in the case of Robin Cleveland, Kevin Kellems, and Karl Jackson who came with me as a consultant, these were done according to HR rules and I think nobody should be terrified of two or three outsiders coming in." Cleveland has been appointed Counsellor to the President, and Kellems and Jackson advisors. Kevin Kellems is also the Director of Strategy and External Affairs for the World Bank.
- On the attention over the appointment of Suzanne Folsom as Director of the Office of Institutional Integrity: "…She's done such a fantastic job over the last few months...I concluded she was absolutely the right person."
- On recent allegations that management accesses and monitors employee emails: "The only time in which we will...look at people's emails is when there is probably cause to look for wrongdoing…So I want to be absolutely clear about that. Any kind of routine snooping on what you're saying in your emails is absolutely out of the question as far as I'm concerned.”
The meeting followed the recent release of the 2005 World Bank staff survey, in which employees generally expressed concern with the institution’s direction. Keeping in mind that the survey was administered during the new President’s first six months in office, it’s still notable that only 19% of respondents felt that the World Bank Group had changed for the better over the last 12 months (35% felt so in 2003). Forty-eight percent of 2005 respondents feel that they have a “good understanding of the direction in which the World Bank Group senior management is leading the institution”, versus 67% in 2003.
Word around town is that the World Bank Managing Director position, held until recently by Shengman Zhang, may be split into two positions. One position may focus on policy while the other handles bank operations. The two positions will supposedly be filled by one donor country and one borrowing country candidate. Rumors are swirling that Jim Adams (an American, currently a Bank VP for Operations Policy and Country Services) and Abdul Hafeez Shaikh (Pakistan’s Privatisation and Investment Minister) may soon assume these critical posts.
There is also some chatter that Ana Palacio, former Foreign Minister of Spain, may soon replace outgoing World Bank General Counsel Roberto Danino.
And Jean-Louis Sarbib, VP of the Human Development Network and former VP for the MENA region - Mid-east & North Africa, may be leaving the bank after the spring meetings.
Source: Jubilee USA
The World Bank Executive Board will meet in early March to decide on how the World Bank will implement debt cancellation for those impoverished countries made eligible under the terms of the July 2005 G-8 debt agreement, now called the Multilateral Debt Relief Initiative (MDRI).This follows the IMF Board’s approval of debt cancellation for 19 impoverished countries this past December.
Jubilee USA has highlighted three key concerns with the World Bank’s plans for debt cancellation :
- The Bank is proposing what amounts to a 15-month delay for any additional countries to receive cancellation beyond an initial 17 nations. This new approach will mean that countries that already qualify for the debt relief program – such as Burundi, Cameroon, Guinea, Malawi, and Sierra Leone, many of which heavily burdened by HIV/AIDS – will now have to wait until July 2007 at the earliest for debt cancellation – two years after the G-8 summit was held in Gleneagles. Additionally crippling is the fact that countries will have to continue to make non-refundable payments on their debts even after they reach completion point.
- While IMF debt cancellation provided cancellation of all debts through end-2004, the World Bank proposal would only cover debts until end-2003. For nations like Cameroon and Malawi, combined with the delays they face, this will mean even after “100% debt cancellation” to the World Bank, they will owe millions in debts to the World Bank from 2004-2007.
- Far too few countries get debt cancellation under the current program. In April, the World Bank proposes to add 4 new countries to the HIPC Initiative – Haiti, Eritrea, Kyrgyz Republic, and Nepal. But these nations – including Haiti – the Western Hemisphere’s poorest nation – will face interminable delays and in the case of Haiti will not see actual debt cancellation until December 2009 because of the economic conditions attached to qualification for debt relief. Moreover, the fact that the World Bank proposes to add only 4 nations again demonstrates the utter inadequacy of the HIPC framework. The UK government, and leading international charities have identified at least 60-70 countries that would need 100% debt cancellation to meet the Millennium Development Goals and many more nations require cancellation of odious and illegitimate debts. The HIPC approach is clearly inadequate.
- Find out more on the Jubilee USA website: www.jubileeusa.org
Other groups working on this issue:
IFIwatchnet connects organizations monitoring international financial institutions through a website (www.ifiwatchnet.org) and a virtual discussion forum called the “shared area” (www.ifiwatchnet.org/sa)
IFIwatchnet website features:
- Calendar
- Documents and resources
- Jobs watching the IFIs
- Eyes on the IFIs – independent film and videos on the IFIs
- Organizational and individual contacts
Shared area participants can:
- Create and manage virtual discussions, collaborations and planning meetings.
- Post documents relevant to those discussions.
- Archive discussions.
Contact your appropriate Regional Animator to find out more!
- Africa: Fiona Chipunza, Afrodad. Email: . Phone: +236 4 778531/36
- Eastern Europe: Klara Schirova, Bankwatch. Email: . Phone: 420-274 816 571
- Central and South America: Cristina Inoue, REDE Brasil. Email: . Phone: +55-61-321-6108.
- Asia: Currently vacant. Please contact any of the other Regional Animators.
- North America: Karen Showalter, BIC. Email: . Phone: (202) 624-0632.
- Western Europe: Lucy Baker, Bretton Woods Project. Email: . Phone: +44 (0)207 561 7610
BIC is happy to field your questions on the IFIs. Not sure how to find out how much money a country receives in World Bank lending? Trying to navigate the maze of what information is and is not publicly available from the MDBs? Look no further! BIC has the answers (or will know where to find them!).
Dear BIC,
What is the Monthly Operational Summary? Is this the best way to find out which projects are going on in my country?
Signed, Confused about MOS
Dear CAMOS,
The Monthly Operational Summary, or MOS, provides the status of operations in the earliest phases in the World Bank’s lending pipeline - after they’ve been identified and prior to the signing of lending agreements.
The primary function of the MOS is to serve as a source of information on business opportunities to supply goods and services for World Bank-financed projects Civil society groups, however, often look to the MOS to identify upcoming projects, especially Category A projects that may have social and environmental impacts.
The MOS is publicly available, and can be found on the World Bank website’s procurement page: http://web.worldbank.org/WBSITE/EXTERNAL/PROJECTS/PROCUREMENT/0,,pagePK:84271~theSitePK:84266,00.html. Individuals can also receive notification of the availability of a new MOS by subscribing to the World Bank’s New List of Disclosure Related Documents email list (email ).
It’s important to note that projects are removed from the MOS when they are either approved or dropped. So removal from the MOS does not automatically suggest that a project is moving forward.
The best way to identify all of the active World Bank-financed projects in your country is to refer to the World Bank website’s country pages. Once on your country’s page, follow the link titled “Projects and Programs” to access a complete list of the types and amounts of assistance the World Bank is providing your country.
Your friend, BIC
Notes on selected articles and reports that have circulated in the past month.
The IMF: the Wrong Business Model – or the Wrong Business?
Jubilee Research
13 January 2006
Citing examples such as Turkey, Indonesia, Argentina and Brazil, the article begins by noting that some of the IMF’s top borrowers have recently announced their intentions to repay their loans earlier than expected. This is a troubling development for the IMF, an institution which relies on the interest from its lending to support its operational costs. As these four countries represent approximately 70% of the IMF’s outstanding loans, their early repayment may seriously destabilize the institution. Noting the growing divide between the four aforementioned countries and the countries who have slipped further into debt and are unable to repay the loans, due in large part to the policies imposed by the IMF, the article questions the relevance of an institution faced with the prospect of having nothing to collect from the “can’t pay” countries and losing all income from the “don’t need” countries. In addition, the effectiveness of the organization in fulfilling its purported mission is also questioned as examples are drawn from its response to the oil price crises, debt crisis and financial crises of recent decades. Suggesting that the Fund’s solutions to recent crises were anachronistic, the article concludes by suggesting that it might be time the IMF “swallow its own medicine, and undertake its own structural adjustment programme – to cut its own spending in line with its declining income, regardless of the consequences for its own staff and management” if it hopes to survive, evolve and remain useful.
Reforming the World Bank
Jessica Einhorn
Foreign Affairs, January/February 2006
Jessica Einhorn, former Managing Director at the Bank, addresses some of the challenges facing the World Bank, namely the cyclical nature of institutional priorities and the viability of the IBRD, the arm of the World Bank group providing loans at market-based rates to middle-income countries. Although World Bank President Paul Wolfowitz has voiced his support for predecessor James Wolfensohn’s focus on ending poverty, the institution’s revived interest in controversial sectors like agriculture and infrastructure suggests that, on the whole, the new generation of Bank staff has not applied the lessons learned from the Bank’s heavily-criticized past involvement in these sectors.
The significant decline in disbursements over the past decade is a critical challenge for the IBRD. The institution is no longer the sole provider of credit, nor is credit the only form of assistance available to middle-income countries. Credit derivatives and private capital flows are notable contenders in what was once the IBRD's sole territory. The institution’s politics are furthermore outdated, as the group’s power structure is markedly different from the distribution of power in the global economy.
Einhorn proposes a strategy to address the IBRD’s apparently increasing irrelevance. First, the Group of 20, led by “eminent persons”, should convene a working group to strategize how a financial institution like the World Bank might ideally serve middle-income countries, as well as how the IBRD might be disbanded in the coming decades. The IBRD’s sizeable capital and reserves, totaling more than $32 billion, could potentially finance the creation of a new financial body with the ability to “think with as much creativity and freedom of action as were available to the original framers at Bretton Woods.”
Report on the World Bank’s Whistleblower Procedures
Professor Robert Vaughn
April 30, 2005
Context: The Government Accountability Project (GAP) released the “Vaughn Report,” commissioned by the World Bank as a blueprint to modernize that institution’s inadequate whistleblower protection policies. The recommendations of noted whistleblower law scholar Robert Vaughn incorporate “best practices” that were already adopted by the United Nations, approved by the Organization of American States to implement its Inter-American Convention Against Corruption, and enacted last fall as U.S. policy to strengthen anti-corruption efforts at all multilateral development banks (MDBs). In the nine months since the World Bank received this blueprint for reform, it has refused to publicly release the report, consult staff on Vaughn’s recommendations, or accept any offers from experts to help implement Vaughn’s analysis. By contrast, during the same nine months, the United Nations has involved its staff and called on GAP for advice in rewriting its whistleblower policies.
Following are some key recommendations from Vaughn’s report, accompanied by analysis from GAP:
- Whistleblower protection should extend to all Bank staff, including former and temporary employees, consultants and contractors. (Recommendation One; Pages 8-10)
GAP: Currently, the World Bank does not adequately protect even staff members from retaliation, let alone the wider network of informed individuals who may witness corruption and abuse in the management of development funds.
- Employees must have the ability to report directly to multiple authorities, including the Bank’s board. This action should be permitted and encouraged. (Recommendations Four, Five; Pages 13-15)
GAP: Presently, the World Bank does not allow its employees to report misconduct to anyone independent of management. Not only are Bank whistleblowers prevented from taking disclosures directly to the board, but employees are under penalty of termination for reporting to external law enforcement authorities or to overseeing legislative bodies such as Congress. By contrast, under U.N. rules, reporting to external authorities and the public is protected.
- Standards of proof of retaliation must be adopted and applied placing the burden on the Bank to prove that its representatives have not retaliated when whistleblowers report harassment and professional reprisal. (Recommendations 12-13; Pages 21-24)
GAP: The Vaughn report recommends standards identical to those adopted by the U.N., O.A.S. and U.S. Whistleblower Protection Act, among others. With the adoption of the new MDB reform law, it is now US policy to ensure that all banks apply modern legal burdens of proof to protect whistleblowing. They ban actions taken when whistleblowing is relevant to dismissal or other alleged reprisal, unless management can prove it would have taken the same action had the individual been silent. They further require that where there is retaliation, the whistleblower must be “made whole” and the retaliator punished. Without benefit of these standards, no witness to wrongdoing in these public institutions is safe from retaliation. - Read the report: http://www.whistleblower.org/doc/Vaughn Report.pdf
World Bank Civil Society website is now available in Arabic, English, French and Spanish. Links:
Check out the World Bank Senior Management webpage. The page provides short biographies for management and senior staff members.
Link:http://web.worldbank.org/WBSITE/EXTERNAL/EXTABOUTUS/ORGANIZATION/
EXTOFFICEPRESIDENT/0,,contentMDK:20040913~menuPK:1170472~pagePK:5117
4171~piPK:64258873~theSitePK:1014541,00.html (page also wins the award for possibly the longest URL ever.)
Overview of FOIA Countries Worldwide by Roger Vleugels. http://ifitransparency.org/resources.shtml?x=45031
Receive email notification of newly-disclosed World Bank operational documents. Email to sign up. List of newly-disclosed documents can also be accessed through the World Bank’s Infoshop webpage: Link:http://web.worldbank.org/WBSITE/EXTERNAL/PUBLICATION/INFOSHOP1/0,,
contentMDK:20093609~pagePK:162350~piPK:165575~theSitePK:225714,00.html
IDB Annual Meetings: April 3-5, 2006. More information: www.iadb.org.
World Bank Spring Meetings: April 22 and 23, 2006. Policy Dialogues for accredited CSOs will be held between Thursday, April 21 and Monday, April 24. All CSOs must obtain accreditation. Accreditation information will be available on the World Bank website beginning on March 1: http://www.worldbank.org/civilsociety. Contact with questions. Also check the BIC website for information on civil society events: http://www.bicusa.org/bicusa/issues/world_bank/2656.php
ADB Annual Meetings:
ADB Annual Meetings: May 3-6, 2006. Contact: . More information: http://www.adb.org/AnnualMeeting/2006/default.asp
EBRD Annual Meetings: May 21-22, 2006. More information: http://www.ebrd.com/new/am/index.htm
BIC is accepting applications for summer internship positions. Successful applicants will be assigned to BIC’s policy, information services or regional programs. Regional programs that might accept interns include: Asia, Africa and Eastern/Central Europe. Assignments will be made according to applicant interests, experience, and language skills. Assignment to a BIC office in New Delhi or Bangkok is possible, but intern would need to prove ability to pay all travel, living and medical expenses for the duration of the position.
An internship at BIC is ideal for individuals seeking greater understanding of the international financial institutions (including the World Bank and IMF), multilateral institutions, development, human rights and the environment. BIC interns interact with environment and social justice activists throughout the world. Interns will also be encouraged to attend relevant events and meetings with other civil society organizations and at the World Bank. Our informal, dynamic structure enables interns to become immersed in BIC's day-to-day operations and gain extensive practical experience and knowledge of the IFIs.
To apply please send a resume and cover letter explaining your interest in this position to or by fax to (202) 737-1155. Applications will be considered on a rolling basis until May 15, 2006.