IMF Faces Structural Adjustment
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to consider the change. They will Staff in black: hold off any decision on salary cuts until the end of January. IMF faces structural adjustment Paying the piper? Further work on efficiency and reduced expenditures was to be Due to pressure from major shareholders the IMF must cut its budget. Internal documents completed for a meeting of the W board’s budget committee at start W reveal details of the restructuring, including staff layoffs and charges for technical February. Proposals on the table W assistance, but fail to shed light on whether the Fund will shift away from dictating to poor include a new department for mul - . B tilateral surveillance and forcing R countries and towards overseeing global markets. E staff to work on multiple countries T T in the proposed larger divisions. R O O The December announcement by B I N Rather than reducing the frequen - N H E managing director Dominique I G W H cy of Article IV reports, annual W A O Strauss-Kahn that he would lay off Y - check-ups on members’ economies, B U O R 300 to 400 staff, 15 per cent of the Y / Strauss-Kahn prefers “less-paper D T H O S work force, is being viewed as a R intensive” board discussions based O G P quid pro quo to secure US Treasury O O R D on mission statements and oral pre - O support for giving the IMF an sentations rather than formal J E endowment. The G7 has demand - papers. C ed that the IMF cut its expenses T For low-income countries there . O before considering how to boost its are plans to reduce staff because of R income (see Update 58). Inside less debt-relief work. Strauss-Kahn G sources have said that the manag - favours reducing the frequency of ing director has been holed up in programme reviews, currently his office working on the Fund’s every six months for borrowers or 59 budget and how to come up with those with oversight arrangements. cuts to the work force, meaning But there was no talk of civil soci - that he has had little time to work ety’s preferred option: drastically J A on what is supposed to be the “cor - scaling down, if not eliminating N nerstone” of Fund reform: changes altogether, the Fund’s work in low- U to its governance structure. A income countries (see Update 52). R Leaked copies of Strauss-Kahn’s The most radical change will be Y January statements to the board in the provision of technical assis - / and staff indicate that the Fund F tance (TA), where charges, varying E will be targeting middle manage - according to the income of the B R ment. He would “like the process country and the importance the U of downsizing to rely on voluntary Fund attaches to the work, will be A R approaches to separation to the introduced. The IMF wants donors Y extent possible.” The biggest to pay for IMF TA and is consider - 2 immediate change is to retirement 0 ing adopting the trust fund model 0 rules to allow any staff member used by the Bank (see Update 47). 8 over the age of 50 to retire with an This is very different from civil unreduced pension. A move to society proposals that TA be driv - combine divisions within depart - en solely by country demand. The ments should further encourage compensation disputes in 2007. In issue related to salaries: pay for the IMF’s proposals, aside from soak - division chiefs and other older staff January a legal case initiated by the IMF’s lowest level staff, 87 per cent ing up aid resources, would worsen to voluntarily leave. Another Staff Association Committee (SAC) of whom are women. Management the ability of developing countries incentive may be an effort to members to stop a salary restruc - had proposed a 15 per cent pay cut to control the TA agenda. The vary - “reduc[e] the costs of Fund techni - turing exercise, which had begun which prompted an end-August ing charges would ensure that low- cal assistance for example by … in 2004 and was supported by the debate of the staff association, with income countries will be chan - making greater use of former Fund board, was rejected by the IMF over 500 members taking part. An nelled into TA based on Fund and staff.” The IMF planned to open administrative tribunal. One of the IMF intranet article said that “staff donor priorities. In contrast NGO the retirement window from the officers of the SAC then launched out of solidarity wore black to ActionAid’s Real Aid reports have end of January. an ultimately unsuccessful cam - protest proposed changes to [sup - called for TA that is “fully untied, Dissension in the ranks paign to amend the constitution of port staff] compensation.” predictable, co-ordinated and chan - the association to make it more According to inside sources, some nelled through a host government According to internal documents, transparent and accountable. support staff ended up successful - managed fund.”Some other pro - the IMF’s usually orderly hierarchy IMF management has yet to ly appealing directly to the board posals in the managing director’s has already been convulsed by resolve the most controversial before an early September meeting continued on page 4 Bank violates indigenous Whoever loses, the Bank IMF conditionality high, New figures cast shadow over rights always wins effectiveness low poverty reduction claims ––page 2 ––comment, page 3 ––page 4 ––page 7 BRETTON WOODS UPDATE NUMBER 59 – JANUARY / FEBRUARY 2008 Bank violates indigenous rights The World Bank-funded Nam to the construction of mega proj - rights to land and resources. He donors and international agencies Theun 2 (NT2) dam in Lao PDR is ects in the name of “national asserts that “multilateral donors are “should refrain from supporting under scrutiny for its violation of development” is one of the most also duty bearers in respect of poli - programmes and projects which human and indigenous peoples’ “serious threats to indigenous cies and programmes on behalf of either directly or indirectly, are or rights, and its failure to achieve peoples’ survival in Asia”. He indigenous peoples”. The report could be conducive to the viola - the development and environ - gives the NT2 dam as an example provides a comprehensive defini - tion of the rights of indigenous ment goals it has promised (see in light of its displacement of as tion of the term ‘free prior and peoples in the countries receiving Update 56, 45). many as 6,200 indigenous people. informed consent’, and states that development aid.” A September report by the NT2 He also refers to reports from Lao the application of this principle “is Lao dam impact policies “a shambles” power company’s panel of ‘inter - PDR of the lack of recognition a basic prerequisite for ensuring ◊ www.probeinternational.org/catalog/ national experts’ finds that restor - given to indigenous peoples’ respect for the right of indigenous content_fullstory.php?contentId=6691&c ing peoples’ livelihoods could take rights and threats and intimida - peoples to self-determination”. at_id=21 nine years or “possibly more”, tion made against members of The World Bank is sorely lack - warns of “significant impoverish - indigenous or tribal peoples. ing on the application of this prin - NT2 dam in Lao PDR ment” in hundreds of affected vil - A second report by the special ciple: having replaced the term ◊ internationalrivers.org/en/southeast- lages, and says more donor aid is rapporteur cites examples of how with “free prior and informed asia/laos needed. The report has since national poverty reduction strate - consultation leading to broad Reports by the special rapporteur become the subject of a public spat gies have failed to meet the prior - community support”, amidst ◊ ap.ohchr.org/documents/sdpage_ between Canadian NGO Probe ities of indigenous peoples by fail - much criticism (see Update 56). e.aspx?m=73&t=9 International, and the World Bank ing to recognise their collective The UN report recommends that and other project representatives. In a December letter to the edi - tor of Thai newspaper, The Nation , IFC and health: “unsubstantiated claims" Probe’s Grainne Ryder refers to numerous social and environmen - In a December report financed by the Gates that figures presenting the private sector as an equal tal inadequacies of the project and Foundation, the International Finance Corporation or majority provider also hide the fact that at least 60 argues that project revenues (IFC) estimates that over the next decade $25 to $30 per cent of the population in Africa can not access should go directly to villagers suf - billion will be needed to meet the needs of Africa’s health care of any kind. fering losses caused by the dam’s health care. In The business of health in Africa: the IFC An article by US NGO Bank Information Center operations. In an indignant announced that it will coordinate $1 billion in equity points out that in many cases of public service pri - response, Peter Stephens, Bank investments and loans to finance private sector vatisation, companies have focussed their efforts on communications officer, claimed health provision in Sub-Saharan Africa. serving those most able to pay and neglected the that Probe has misrepresented the The study found that the private sector accounts impoverished majority. Though the IFC emphasises experts’ report, and states that the for about half of the region’s $16.7 billion spending the need for strong regulatory systems to safeguard project will generate $2 billion on health care, and that impoverished people are just the interests of less wealthy populations, few over 25 years for poverty reduc - as likely as the better-off to use private providers.