IF-EYE Newsletter
Issue #33
Thursday, May 22, 2008
A publication of the Bank Information Center
Welcome to the May 22, 2008 issue of the IF-EYE – the Bank Information Center’s synthesis of key developments concerning international financial institutions. This issue spotlights the response of the international financial institutions to the global food crisis. Please send suggestions, contributions and subscription requests to: info@bicusa.org. Thanks for reading!
In this issue:
1. IFI Updates
2. Civil Society Highlights
3. SPOTLIGHT: Amid food riots and shaken governments IFIs scramble to develop a coherent response
4. Announcements and Resources
5. New at BIC!
EBRD appoints new president
5/19/2008 European Bank for Reconstruction and Development
At the conclusion of the Annual Meeting of the European Bank for Reconstruction and Development (EBRD), held in Kiev, Ukraine from May 16-19, the Bank appointed Thomas Mirow as its next President. Mirow, who is currently the German Deputy Finance Minister, will take charge in July, and will replace Jean Lemierre, who had been at the job for eight years.
Thomas Mirow appointed EBRD President (EBRD website)
EBRD appoints new president, Australia signals exit (Agence France-Press website)
EBRD approves new policies
5/15/2008 European Bank for Reconstruction and Development
The Board of Directors of the European Bank for Reconstruction and Development (EBRD) approved the Bank's new Environmental and Social Policy as well as a new Public Information Policy, before the EBRD's Annual Meetings in Kiev, Ukraine.
Read more (BIC website)
Brazil’s environment minister quits in protest
5/14/2008 Federative Republic of Brazil
Brazil's Environment Minister Marina Silva had resigned after five years, leading to speculation that her departure is linked to a lack of political support in Brazil for protecting the Amazon rainforest.
Environmental cloud over Silva’s exit seen to clear (Financial Times website)
Marina marches off (The Economist website)
Brazil's Amazon minister resigns BBC News (BBC News website)
IMF chief economist resigns
5/7/2008 International Monetary Fund
Simon Johnson, the chief economist at the International Monetary Fund (IMF) announced his resignation on May 6. His resignation comes a little over a year after he joined the IMF, in March 2007. Johnson will step down from his post in September to return to his position as a professor at the Massachusetts Institute for Technology (MIT).
Read more (BIC website)
World Bank appoints new anti-corruption head
5/6/2008 World Bank
Three and a half months after the resignation of Suzanne Rich-Folsom, the controversial head of the World Bank’s Department of Institutional Integrity (INT), the Bank has appointed Leonard McCarthy as the new head of its internal anti-corruption unit.
Read more (BIC website)
Mittal misery: Time for EBRD to end public subsidies for steel giant
5/19/2008 CEE Bankwatch Network
Campaigners attending the EBRD's annual meeting have joined with other groups from around the world in calling for the EBRD and other public lenders to stop providing soft loans for Arcelor Mittal, the global steel giant that has benefited from more than USD 600 million in taxpayer-backed loans in the last ten years.
Read more (IFI watchnet)
Interview with Vandana Shiva: Why we face both food and water crises
5/15/2008 Alternet
Interview with activist, Vandana Shiva, about the role that corporation-friendly economic schemes have contributed to the current global food and water crisis.
Read more (Alternet website)
ADB agrees to NGO demand for second draft of Safeguard Policy Update
5/13/2008 Multiple organisations
After ignoring civil society demands that called for a halt to public consultations, the Asian Development Bank (ADB) finally agreed to issue an additional draft and consultation. The announcement came a week before the Asian Development Fund (ADF) replenishment wrap-up, and ADB watchers believed the concession was made after the U.S. tied its ADF contribution to a satisfactory resolution of the review.
Read more (BIC website)
ADB strategy 2020: selling Asia to the private sector
5/6/2008 Multiple organisations
In a recent sign-on statement, multiple civil society organizations rejected the Asian Development Bank’s new strategy, arguing that it will push for more private sector involvement in development and lead to more harmful impacts on services, livelihoods, food security and the environment.
ADB Strategy 2020: Selling Asia to the Private Sector May 6, 2008 (Acrobat pdf, 93 KB)
Read more (BIC website)
ADB warned of Asia’s risks without strong safeguards
5/6/2008 NGO Forum on ADB
Asia’s vulnerable communities and environment will continue to be at risk if the Asian Development Bank fails to improve its existing Safeguards that are currently being revised. Further, the ADB Safeguard policies on the environment, involuntary resettlement and indigenous peoples should protect the poor and not any kind of business interests.
Read more (BIC website)
5/9/2008 Bhumika Muchhala and Soren Ambrose, Bank Information Center
Skyrocketing food prices have forced the international financial institutions (IFIs) to articulate responses to the situation. The World Bank has conjured a "New Deal for Global Food Policy" to pump agriculture-oriented loans and programs into Africa and to address emergency financing needs. The IMF has voiced concern over the likely macroeconomic shocks of the food crisis in low-income countries. But the Bretton Woods Institutions must wrestle with a legacy that helped set the stage for diminished food security in many low-income countries.
Within the last year, the price of staple foods such as rice, grain, oil and sugar has increased 50%. Rice prices alone have risen by 90%. A complex interplay of factors has led to the current crisis in food supply and prices, from higher fuel costs, the diversion of food crops to agrofuels, increased demand for food in emerging market countries (particularly China and India), increased fertilizer prices, speculation on global commodity markets, and prolonged drought in Australia.
Starting in the 1970s, developing countries were encouraged—pressured, in many cases, by the IMF and World Bank—to abandon economic policies prioritizing self-sufficiency, both in terms of food production and manufactured goods. “Import substitution” policies were discouraged, and borrowing governments were pushed to develop their export sectors. Countries throughout Africa, Latin America, the Caribbean, and Asia devoted their best land and financial incentives to “cash crops” such as cotton, coffee, tea, tobacco, cocoa, and flowers—which are exported primarily to Northern markets. Unbalanced trade rules promoted by the World Trade Organization (WTO), World Bank, and the IMF have allowed rich countries’ agriculture subsidies to artificially depress the prices of foods such as corn and wheat. Meanwhile state marketing boards and grain reserves that aimed to protect both producers and consumers against sharp food price volatility have been privatized in many low-income countries.
Read more (BIC website)
The World Bank's Climate Investment Funds
The World Bank, the world's largest multilateral lender for fossil fuel projects, plans to reinvent itself as the world's leader on climate and development. It has proposed at least two new "Climate Investment Funds" to help "developing countries to address urgent climate change challenges." But a closer look at these funds reveals that the Bank would continue to fund greenhouse gas emissions, while re-branding its business as usual as "transformational, low-carbon" technologies.
Visit Friends of the Earth's website to learn more about the World Bank's Climate Investment Funds.
Weekly roundup: IFIs in the News
This is a new feature from BIC! This "Weekly Roundup," posted each Friday, is a compilation of select news articles, blogs or other media concerning the international financial institutions from the previous week.
View the latest IFIs in the News (BIC website)
Hetal Patel joined BIC in April 2008 as the Finance Associate. Hetal received her B.S. in Business Administration with a concentration in financial management and investments from California State University - Long Beach in 2002. Originally from Southern California, Hetal moved to Washington, DC two years ago to pursue a career in the non-profit sector. Contact Hetal at hpatel@bicusa.org.
Mohamed Albutmeh joined BIC in May 2008 as a fellow member with the Middle East and North Africa (MENA) Program. He works with the MENA Manager and Associate to fulfill the 2008 program. Mohamed holds an MBA degree from Morgan State University and a professional diploma in Public Administration from Centre National de la Fonction Publique Territoriale in France. He has worked for more than 8 years in the development and business fields for both the private and public sectors in Palestine, and has played a vital role working with international organizations to create a conducive environment that enabled the private sector in the West Bank and Gaza Strip to flourish. Contact Mohamed at malbutmeh@bicusa.org.
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