including the proposal that the GCF should have its own legal personal- World Bank manoeuvres to ity. Liane Schalatek, of the German political foundation Heinrich Böll, notes that this stance is based on influence climate finance debates “the implication that ultimately the status needed could also be derived As the next round of global climate negotiations approaches, the World Bank advocates through an existing international

WWW.BRETTONWOODSPROJECT.ORG NOVEMBER / DECEMBER 2011 entity like the World Bank; a clear the use of private sector finance for climate change adaptation and mitigation, and pushes no-go from the developing country multilateral development banks as delivery mechanisms. side”. The Bank has already been announced as interim trustee of ROBIN HEIGHWAY-BURY / THOROGOOD An early October report on mobi- the GCF, but developing countries lising climate finance was coordi- and civil society groups have been nated and produced for the G20 actively resisting any expansion by the World Bank in the run up of this role. Laurence Graff, of the to the United Nations Framework European Commission, told the Convention on Climate Change press in November that “the issue (UNFCCC) negotiations, which is indeed whether the fund should begin in late November in Durban, be allowed to carry out its own pro- South Africa. The report, Mobilising jects without resorting to the World climate finance, highlights the impor- Bank. That is still open (to discus- tance of eliminating fossil-fuel sub- sion)”. sidies and of implementing a carbon Many developing countries also tax on aviation and shipping, which raised concerns over the inclusion have long been demanded by civil of a proposal for the GCF to include society groups. It also advocates a private sector facility. Several 78 controversial measures to boost developed countries in commit- ailing carbon markets (see page 2). tee negotiations emphasised the It argues that meeting the UNFCCC- potential for the facility to leverage agreed goal of mobilising $100 bil- large amounts of private finance. As lion a year of climate finance will Schalatek notes, this was “a bitter not be achievable through public pill for most developing countries budgetary allocations. It states that to swallow”, many of whom have “the large financial flows required maintained that the GCF should for climate stabilisation and adapta- be mainly financed through new tion will, in the long run, be mainly and additional public contributions private in composition.” from developed countries. This is in sharp contrast to a late Civil society groups have also August UN note commenting on a been warning of the dangers of a draft of the paper. In a recommen- facility premised on private finance. dation that went unheeded, it says Lidy Nacpil of international net- that “the G20 paper can benefit work Climate Justice Now! said in from giving due weight to direct September that “the over-emphasis Published by Bretton Woods Project budget contributions, as well as … on leveraging private investment in co-production with a financial transaction tax.” finance. The IFC plays a prominent which “is already marketable and could lead to a fund that depends role at the CIFs, implementing a we have not found evidence that the heavily on financial intermediaries. Enter private finance range of private sector projects, comparatively large portion of CTF As demonstrated by the IFC, the The reports’ discussion of public often through financial intermedi- money invested in hydropower has financial sector’s desire for less dis- climate finance centres on its use to aries (see Update 77, 76, 75). had a positive spill-over effect and closure, less liability, and less leverage large amounts of private However, a September 2011 leveraged investment.” accountability for environmental lending, with a whole section part- report by Swiss NGO the Berne The Green Climate Fund and social outcomes will pose a authored by the Bank’s private sec- Declaration argues that the leverag- significant challenge for global tor arm, the International Finance ing potential of CIFs has been over- The design document for the new efforts to promote sustainable Corporation (IFC). It emphasises the estimated. The report examines the Green Climate Fund (GCF) (see development and climate stabilisa- role multilateral development banks Clean Technology Fund (CTF, one Update 77, 76, 75), put together by tion.” (MDBs) can play in this process of the CIFs) programme in Turkey. a transitional committee of 40 coun- G20 climate finance report, G20 and uses the example of the Bank- It finds that in the energy efficiency tries, will go to Durban for approval ◊ tinyurl.com/g20report housed Climate Investment Funds sector the CTF largely achieved its without all committee members (CIFs) to illustrate the potential for official objectives of stimulating pri- approving the final plan.The US Report on Turkish CTF, Berne Declaration MDB-operated pooled financing vate investment. However, it ques- refused to endorse the document, ◊ www.evb.ch/en/p19541.html arrangements to leverage private tions the impact on hydropower, citing concerns over many issues,

Beyond repair? Bank lobbies Nepal climate loans: IMF plays “second fiddle” in Bank still promoting water for carbon markets an injustice eurozone privatisation ––page 2 ––comment, page 3 ––page 4 ––guest analysis, page 7 4 BRETTON WOODS UPDATE NUMBER 78 – NOVEMBER / DECEMBER 2011

claims restricting farming practices to those that sequester carbon may Beyond repair? actually reduce farmers’ ability to adapt to climate change. Bank lobbies for carbon markets The negotiations in Durban will also focus on progress in estab- As the UN climate talks loom, the Bank is lobbying G20 countries to resuscitate shrinking lishing international agreement on REDD+. The Bank’s G20 report carbon markets through controversial measures, including using public climate finance to argues that agreements on carbon stimulate demand and creating markets for soil and forest carbon. finance should take advantage of “the large mitigation opportuni- The Bank will use the United severely contracted in the last two not responsible for causing climate ties from REDD+ activities.” The Nations Framework Convention years. Oscar Reyes of NGO Carbon change”. UNFCCC has not yet taken an on Climate Change (UNFCCC) Trade Watch, observes that: “The Creating new markets official position on market-based summit in Durban, South Africa, World Bank is continuing to push financing for REDD+, although in late November to launch for more carbon markets, which The report for the G20 also current Bank REDD programmes the Carbon Initiative for have failed to reduce emissions advocates that sectors currently are designing projects to produce Development fund. This aims and which displace responsibility “bypassed by existing regimes” be carbon credits. to provide up front finance for for emissions reductions towards eligible to produce carbon credits, A September letter by an interna- carbon-credit-generating projects developing countries. The Carbon including soil carbon in agricul- tional coalition of NGOs warns that in least developed countries. The Initiative for Development explic- ture (see Update 77) and Reducing the Bank’s Forest Carbon Bank is also expected to continue to itly acknowledges the failure Emissions from Deforestation and Partnership Facility (FCPF, see lobby for international agreements of the carbon market in poor coun- Degradation (REDD+). Speaking Update 76, 75, 72) is prematurely to support the viability of carbon tries, but this is inscribed in the offset in September, Andrew Steer, the pushing ahead with its own Carbon markets, which allow countries market’s economic DNA: investors Bank’s special envoy on climate Fund, which will facilitate the sale and companies to claim a reduction find the economies of scale of heavy change, said the summit is an of forest carbon credits to investors. in carbon emissions by purchas- industry and large dam pro- opportunity for a new focus on The letter, whose signatories include ing credits generated by emissions jects in middle-income countries agriculture. On soil carbon he said: the Papua New Guinean Ecoforestry reductions from other sources. most attractive, while most poor “You invest in things that are good Forum and Gabonese NGO The Kyoto Protocol, the only inter- countries don’t pollute enough to be for yields, good for resilience and Brainforest, argues that the FCPF nationally binding agreement interesting to the market.” also sequester more carbon. You can “should be wary of preparing coun- on emissions reductions, is due The Bank-led climate finance have it both ways if you get carbon tries for a market in forest carbon to expire in 2012, and expecta- report for the G20 (see page 1) back in soils.” credits which may not materialise.” tions are low that another legally includes a section on carbon mar- A September report by ActionAid US NGO Bank Information Center binding agreement will be reached kets authored by the Bank. It admits International critically examines the also warned in its October REDD in Durban. This has raised fears that “carbon offset markets face Bank’s assumptions on soil carbon. newsletter that methodological over the future of the Clean major challenges”, but advocates It argues that although the Bank work by the Carbon Fund “may Development Mechanism (CDM), a series of measures that it insists wants soil carbon to be included also end up leading or influencing mandated by the Kyoto agreement, could buttress carbon finance. in the CDM, “scientific uncertainty the international climate negotia- which allows countries to reach Controversially, this includes using about the quantification and verifi- tions.” The letter argues that social their targets through carbon mar- publically provided climate finance cation of soil carbon, as well as the and environmental safeguards, the kets. to buy carbon credits to stimulate non-permanence of sequestered car- rights of indigenous peoples, and The launch of the new fund by demand. Responding to the report bon, put both the value of the asso- the participation of affected com- the Bank, which already manages in UK newspaper the Guardian, ciated credits and the mitigation munities must be improved before over $2.7 billion in carbon funds Murray Worthy of UK NGO World potential of soil carbon markets in the Carbon Fund launches activities and is a major facilitator of carbon Development Movement said “lim- doubt.” ActionAid also warns that in participating countries. finance investments (see Update ited public finance must not be used it leaves small farmers with tradi- 74), is further evidence of its efforts to prop up failed carbon markets. tional land rights vulnerable to land ActionAid soil carbon report, ActionAid to prop up ailing carbon markets These markets only exist to pass the grabs (see page 8) by creating incen- ◊ www.actionaid.org/publications/ (see Update 77, 76). International burden of cutting emissions back tives for governments to reclaim fiddling-soil-carbon-markets-while- markets in CDM credits have on to poorer countries, which are land. Additionally, the report africa-burns New reports question Bank’s coal investments

As the November climate talks in up the Kosovan economy, but will ing them to follow through on the firm Climate Advisors finds that South Africa approach, the World actually be a huge burden. Sold on draft proposal. The activists repre- coal funding “burdens recipient Bank continues to be overshadowed bogus figures, it will harm citizens’ sent communities fighting a wave countries and the poor. The World by past and prospective loans for health and push up their bills.” The of coal-fired developments in India. Bank should redirect its funding to fossil-fuel power plants. report also accuses the Bank of fail- Long-term impacts of Bank coal cleaner generation sources.” In An October report by the Kosovar ing to consider renewable alterna- funding in the Singrauli district of November, US-based NGO Oil Institute for Policy Research and tives, contravening its own Strategic northern India are the focus of a Change International launched an Development (KIPRED) and US Framework on Development and November report by UK NGO the online “Shift the Subsidies” data- NGO Sierra Club has sharply criti- Climate Change (see Update 77, 71). Bretton Woods Project, which docu- base, detailing energy sector lend- cised the Bank’s cost projections The Bank’s energy strategy, ments “environmental squalor” ing amongst multilateral develop- for a proposed lignite-fired power meanwhile, is still in limbo (see and “massive displacement of local ment banks since 2008. plant outside the Kosovan capital Update 76, 75), after a Bank board people.” No fairy tale, Bretton Woods Project Pristina, which the Bank is consider- sub-group split in April over its Figures released in October by ◊ brettonwoodsproject.org/singrauli ing funding (see Update 77, 75). The proposed phase-out of coal lend- US think tank the Brookings Bank’s cost estimates are “clearly ing to middle-income countries Institution back up the proposed KIPRED report out of date”, the report charges. “It (MICs). The Bank has not indicated phase-out of Bank coal lending to ◊ tinyurl.com/kipredreport is reasonable to assume that the cost any timetable for completion of the MICs, pointing out that the rate of The Brookings Institution report of electricity under the proposed strategy. But a delegation of Indian return on coal-fired projects means ◊ tinyurl.com/brookingsbankcoal plan might be three times higher.” activists visited Washington in finance is readily available from the KIPRED’s Nezir Sinani said: “The September to lobby the Bank and private sector. Meanwhile, an Climate Advisors report proposed plant is supposed to light IMF at their annual meetings, urg- October report by US consulting ◊ tinyurl.com/climateadvisorsreport 2 BRETTON WOODS UPDATE NUMBER 78 – NOVEMBER / DECEMBER 2011

he Pilot Programme violates the principle of country for Climate Resilience Nepal climate loans: and community ownership. T(PPCR), part of the World The PPCR in Nepal has not Bank-housed Climate Investment an injustice received the support of civil soci- Funds (CIFs), intends to help inte- ety organisations, who are active- COMMENT grate climate resilience in national ly engaged from community level development planning of climate by Keshab Thapa, Local Initiatives for Biodiversity, to national and international pol- vulnerable countries. The PPCR Research and Development, Nepal icy lobbying level. The process of offers recipient countries a mix of stakeholder consultation is not grants and loans for climate adaptation projects. fair enough to maintain a transparent engagement process. There has Nepal, the world’s fourth most vulnerable country to climate change been a serious lack of involvement of NGOs active at the community according to the 2011 report of risk-analysis company Mapplecroft, level on climate change, with very few of these organisations consulted was one of the first countries to apply for PPCR resources. In June, on the PPCR. the subcommittee of the PPCR approved $50 million in grants and $36 Furthermore, the PPCR proposes to lend money to private sector million in loans to the Nepalese programme. Co-financing from other companies, which will never achieve community resilience. Private multilateral development banks implementing the PPCR programme is companies are often happy to use the loan money for their own benefit, yet to be announced, but is likely to be heavily loan based. simply looking at the scheme of interest and repayment, but they are It is obvious that developed countries must provide unconditional often totally unaware of climate change, adaptation, resilience, and the financial support on adaptation to countries vulnerable to climate principle of equity and justice. change to build their resilience. The parties to the United Nations Already, Nepal has been categorised as a country at medium risk of Framework Convention on Climate Change (UNFCCC) have taken into debt distress, and it is hard to predict where it will go with the loan account the common but differentiated responsibilities and respective on adaptation. Offering and accepting loans will seriously disregard capabilities of countries, and developed countries had committed adap- the sovereign right of the people of vulnerable countries, which is not tation support to vulnerable countries. Building resilience of vulnerable recognised by the decisions of their so-called leaders, who are much less country communities through loans is against the commitments made aware than their people on this issue. and principles agreed at the UNFCCC. It is simply an injustice. In the context of huge opposition to the PPCR, it will be hard to Taking loans for adaptation to climate change is a serious concern achieve community resilience unless the loan component is resolved. It for citizens of Nepal, who are advocating for climate justice, which the is very important for the World Bank to resolve this to avoid further government has also envisioned in its Climate Change Policy 2011. It controversy. The best way is to convert the loans into grants and make strictly does not comply with Nepal’s stance in international forums them easily accessible to climate change vulnerable countries. The devel- and its own policy on climate change. oped nations pledging money to the CIFs and other funds must agree to Nepal has submitted its National Adaptation Programme of Action provide unconditional support on climate change adaptation, save the (NAPA) on climate change to the UNFCCC. The framework of NAPA lives of people whom they made vulnerable and save the planet by con- implementation requires 80 per cent of the funds of any adaptation trolling the temperature below the tipping point. In order to achieve this, programme to flow directly to the community level. But the PPCR in the parties in the Durban UN climate meeting must cut loans out of any Nepal neither complies with NAPA priorities nor its implementation adaptation agreements. framework. Currently the PPCR in Nepal, in not recognising NAPA, [email protected]

ity; enhancing country-level gender equality, such as the UN Human Bank’s gender WDR: too little, too late? diagnostics; scaling up lending for Rights Council. domestic priorities identified by The implications paper states The Bank’s flagship publication Shahra Razavi, of the United WDR 2012; increasing the availabil- that, in the last five years, the Bank pushes gender equality on to the Nations Research Institute for Social ity of gender-relevant data and evi- “allocated more than $65 billion … to Bank’s agenda, but critics express Development, said in an October dence; and leveraging partnerships, improve girls’ education, women’s concern about its implementation paper that the WDR was a “missed global and country-level, to help and mothers’ health, and women’s and unwillingness to consider gen- opportunity”. “By failing to engage implement priority actions. access to credit, land, agricultural der a women’s rights issue. seriously with the gender biases of But Marina Durano, of the extension services, jobs and infra- The World Development Report macroeconomic policy agendas” international feminist network structure services.” But Elizabeth (WDR) 2012: Gender Equality and “reducing social policy to a Development Alternatives with Arend of US-based NGO Gender and Development was released in narrow focus on conditional cash Women for a New Era, pointed out Action disputed the Bank’s commit- September. It documents progress transfers”, she argues, “the report that it “does not mention whether ments to gender, noting that its in narrowing gender gaps in educa- is unable to provide a credible and gender equality considerations will “‘social development, gender and tion, health and labour in the past 25 even-handed analysis of the chal- inform a reformulation of Bank social inclusion’ investments have years and maintains the Bank’s past lenges that confront gender equality assessment tools used to deter- actually decreased from $1.25 billion approach to gender as an economic … and appropriate policy responses mine lending allocation, such as the in 2007 to $952 million in 2010”. A issue, which has been criticised for for creating more equal societies.” Country Policy and Institutional July report from UN Women also failing to treat gender under a wom- During the Bank’s September Assessment [CPIA, see Update criticised the Bank for dedicating en’s rights framework (see Update annual meetings, the ministe- 43], in order to ensure that Bank only $7.3 million to gender equality 75, 74). However, the WDR recog- rial level Development Committee policies and their macroeconomic components in public administra- nises that economic growth does endorsed a paper detailing the policy advice support the gender tion, law and justice projects between not always lead to gender equality. implications of the WDR for the equality aspirations set out in the 2000 and 2010 – just 0.001 per cent of Female mortality, school enrolment World Bank Group. This paper WDR”. Moreover, Durano said the grants and loans in this period. and earnings are some of the areas lays out five directions to capital- implications paper does not explain ◊ tinyurl.com/2012WDR identified where gender gaps are ise on the WDR: informing country how the Bank will work along other still most significant. policy dialogue on gender equal- institutions promoting gender ◊ tinyurl.com/unrisdpaper 3 BRETTON WOODS UPDATE NUMBER 78 – NOVEMBER / DECEMBER 2011

European Commission adjustment IMF plays “second fiddle” as programme.” Austerity policies seem to be undermining eurozone economic governments fall in the eurozone prospects. In mid October the As the eurozone debt crisis escalates and protests multiply, the IMF increasingly appears Portuguese government announced a new batch of cuts and said that it side-lined. Italy’s calling in of the Fund for “verification” of implementation of its EU-agreed would miss fiscal deficit targets in austerity package symbolises the limits of its influence and resources. its EU-IMF programme because of failure to hit growth forecasts (see In September, former IMF chief IMF negotiators were pressing for other European countries. After the Update 77, 76, 75). While the mid economist Raghuram Rajan sug- private sector write-offs of up to 60 resulting collapse of the Greek gov- October EU-IMF review of Ireland gested that “the IMF should start per cent over fears that Greek debt ernment, Elena Papadopoulou of pronounced the government on- taking the lead in managing the will still be unsustainably large. the Athens-based Nicos Poulantzas track in terms of the fiscal deficit, crisis rather than playing second Echoing the results of negotiations Institute said: “Despite the pro- in early November the unemploy- fiddle.” While the IMF participat- in Ireland last year – the IMF report- claimed enthusiasm, there is no ment rate was still 14.4 per cent and ed in many of the October nego- edly proposed a 66 per cent write off realistic reason to believe that the the government slashed the growth tiations and summits in Europe, it on Irish unguaranteed bank bonds – new coalition government – with forecast for 2012 from 2.5 per cent to has always bowed to the priorities the Fund was overruled. the participation of the extreme 1.6 per cent. of the political leaders of the euro- The Greek Debt Audit Campaign right – will follow anything other Too few resources zone’s most powerful members was also unhappy about the deal, than the socially destructive policies Germany and France. saying: “The selective haircut, applied according to IMF recipes Because the IMF would not have The end-October European deal which leaves the illegal loans of with the agreement of the European sufficient resources for a crisis in asked Greece’s private sector credi- the troika untouched and leads elites.” a large country like Spain or Italy, tors to take a 50 per cent cut in the the pension funds to catastrophe, IMF head Christine Lagarde hint- IMF to survey, not lend to Italy face value of their debt (see Update shows how necessary both cessa- ed in late September that it might 77, 76, 75). Greece was required to tion of payments and a democratic, Financial market actors pushed need more money. Just one week deepen its privatisation programme worker-led debt audit is.” the interest rates Italy would pay later, after the US treasury secre- with a further €15 billion ($20 bil- Major protests have been ongoing on new borrowing over 6 per cent tary vetoed the idea, Lagarde did lion) of public asset sales. in Greece throughout the autumn. before the early November G20 a U-turn, saying that the IMF had The IMF has still not indicated if The early November proposal of a summit. The IMF has insufficient enough resources. it will participate in a second loan popular referendum on the terms resources to cover the €300 billion In October, China, Brazil, Russia package to Greece, even though the of the EU-IMF loan, which would Italy is estimated to need to refi- and India said they would be will- European Union (EU) has been ask- have marked the first ever such nance in 2012. Instead, just before ing to provide additional resources ing it to since July (see Update 77). test of an IMF programme, was being forced to resign, Italian prime through the IMF for loans to Several media outlets reported that cancelled amid opposition from minister Silvio Berlusconi agreed Europe. In 2010, all these countries with EU leaders to deeper austerity were willing to put more resources policies and then “invite[d] the IMF into the IMF in exchange for greater Debt sustainability frameworks reviewed to carry out a public verification of voting rights, but this was blocked its policy implementation on a quar- by Europe (see Update 73). In mid The IMF reviewed its methodology for assessing debt sustainability in advanced terly basis.” October, Brazilian president Dilma and middle-income countries in late August, admitting that its past analyses It is not clear whether the Fund’s Rousseff reiterated that Brazil could have been too optimistic. It confirmed the complaints of critics (see Update 56) monitoring of Italy will be treated put more money into the Fund in when it found that “GDP growth forecasts showed a tendency to systematically as technical assistance or bilat- exchange for more voting rights, exceed outcomes. This phenomenon was particularly relevant in countries with eral surveillance. Either way, civil while criticising IMF conditionality: an IMF-supported programme.” The IMF and the World Bank are also conducting society organisations in Italy were “we will never accept, as partici- a review of debt sustainability analysis for low-income countries and an initial sceptical. Antonio Tricarico of pants of the IMF, that certain condi- paper is expected soon. NGO CRBM said “calling in the tions that were imposed on us, be Modernizing fiscal policy framework and public debt sustainability analysis IMF is like playing with fire. While imposed on other countries.” ◊ www.imf.org/external/np/sec/pn/2011/pn11118.htm the Berlusconi era has ended, his No to the 50% haircut, Greek Debt Audit legacy will still be there through Campaign an IMF-European Central Bank- ◊ elegr.gr/details.php?id=258

Analysis in conflict DFID’s multilateral World Bank poverty Bank’s procurement WDR criticised funding questioned findings challenged rules “rigid”

The World Bank’s 2011 World Development The UK parliamentary Public Accounts A new Basic Capabilities Index (BCI), The UK House of Commons International Report (WDR) on Conflict, Security and Committee (PAC) has questioned the gov- published by civil society network Social Development Committee (IDC) has Violence (see Update 77) was challenged ernment’s rationale for increasing funds Watch, is “closer to reality than the one- expressed concerns that “when bidding in a paper that criticises it for analytic to multilateral agencies, such as the World dollar-a-day line of the World Bank”, for infrastructure projects, local contractors deficiencies – “lump[ing] gangs together Bank. The cross-party PAC suggests that according to Social Watch director Roberto often do not stand a chance against with … drug cartels, terrorists or even rebel “the strategy to increase the Department Bissio. The BCI is derived from well-being international bidders, partly due to rigid groups” – and for saying that “violence for International Development (DFID) spend indicators such as malnutrition and prima- rules used by multilateral development relates to institutional deficits”, while “barely through multilateral programmes appears ry education. The Bank adjusted its meas- banks such as the European Union (EU) mak[ing] any mention of democracy.” The to have more to do with it being easier … urement to $1.25 a day in 2008, but it was and the World Bank.” The IDC’s September paper argues that this reflects a narrow than for [DFID] to assess the viability, effec- still criticised for being too low and not report calls on the UK Department for emphasis on institutional economics – tiveness and value for money of bilateral suitable for cross-country comparison (see International Development to use its lever- “almost all the literature cited is economic programme proposals.” In March, DFID Update 62). Whilst the World Bank claims age to ensure that the World Bank builds and is principally based on quantitative acknowledged weaknesses in the Bank’s that, globally, average poverty was halved “capacity within developing country govern- correlations between economic and politi- International Development Association between 1980 and 2005, the BCI shows ment procurement processes”, arguing that cal factors and conflict” – with little histori- (IDA), while praising it overall as a channel very slow progress in the last 20 years. procurement of goods and services can cal or sociological perspective. for UK aid (see Update 77, 75). reduce poverty by providing local firms with Basic Capabilities Index 2011 contracts and boosting local employment. ◊ tinyurl.com/conflictWDRpanned ◊ tinyurl.com/PAC-DFID ◊ www.socialwatch.org/node/13749 ◊ tinyurl.com/IDC-Infra 4 BRETTON WOODS UPDATE NUMBER 78 – NOVEMBER / DECEMBER 2011

Inside the institutions country classifications

A state’s relationship with the IFIs and the type of assistance it receives is tries that are classified as middle-income. determined by its country classification. Some crucial types of classifica- A ‘fragile state’ is a low-income country that has a harmonised average tions are: the World Bank’s operational lending categories; the Bank’s ana- Country Policy and Institutional Assessment (World Bank/Asian Development lytical categories used in the World Development Report (WDR); the IMF’s Bank/African Development Bank) score of 3.2 or below, out of 6 (see Update operational and analytical categories; the IFC’s frontier market category; 63, 52, 43). This is contentious as the assessments contains no measure of the Bank’s fragile state category; and the distinctions used by the Bank security and it means that countries that are not low-income are precluded and IMF in determining and reporting success in governance reforms. from definition as fragile. There is no formal World Bank definition of conflict. The crucial category for the International Finance Corporation (IFC), the The analytical classifications the Bank uses in its WDR are based on gross Bank’s private sector arm, is ‘frontier markets’, which forms the first of its national income (GNI) per capita. Updated every three years, they currently strategic Five Pillars. A ‘frontier market’ is an IDA eligible country, a ‘fragile are: low-income, $1,005 or less; lower-middle-income, to $3,975; upper- state’ (using the Bank’s definition), or a ‘frontier region’ in a middle-income middle-income, to $12,275; and high-income, more than $12,275. These clas- country. A ‘frontier region’ is primarily defined by the per capita income of sifications are widely used, notably in forming the basis of the Organisation the region with adjustments for business risk issues in the country. for Economic Co-operation and Development’s (OECD) definition of official The IMF has its own analytical and operational classifications. The analyti- developmental assistance. cal classifications are used in its World Economic Outlook (WEO) report to The Bank’s operational lending categories are based on the same data as categorise states as advanced or developing economies. The IMF listed 34 the analytical classifications. The lending thresholds for the fiscal year 2012 advanced economies in its September 2011 WEO, compared to the Bank’s were: civil works preference, $1,005; International Development Association 70 high-income countries for the same period. The key IMF operational clas- (IDA) eligibility (operational), $1,175; International Bank for Reconstruction sification is eligibility for the Poverty Reduction and Growth Trust (PRGT), its and Development (IBRD) graduation, $6,925. Civil works preference is the cut- concessional lending trust fund. Countries are added to the PRGT-eligibility off at which the Bank demands international competition in procurement for list if their annual per capita GNI is below the IDA operational threshold, or if Bank assisted projects, and IBRD graduation marks the point where a state they lack access to capital markets on a “durable and sustainable basis”. graduates from the IBRD to donor-country status. Due to resource constraints, Economic data used by the IMF is based on gross domestic product the IDA operational cut-off of $1,175 is lower than the historical eligibility weighted by purchasing power parity rather than market exchange rates, a ceiling based on $250 in 1960. IDA eligibility also forms the basis of other significant departure from the Bank’s methodology. Despite having numerous important categories, such as the Bank’s definition of a fragile state, the existing categories, when the Bank and Fund reported the outcomes of their IFC’s definition of a frontier market and eligibility to the IMF’s concessional governance reform negotiations in 2010, they created bespoke classifications lending facility. The classifications do not consider the distribution of wealth that resulted in over-reporting of the share of votes shifted to developing within countries, which explains how most of the world’s poor live in coun- countries (see Update 70, 72). Capital controls: tive approach. It summarises the IMF gradual change of heart continues? discussions of an independent task force on capital flows management The G20 released conclusions on managing capital flows, while papers suggest the IMF’s that also included former Reserve gradual moves to accept national regulations on international capital flows continues. Bank of India deputy governor Rakesh Mohan. They argue that In October, G20 finance ministers which argues that “for reasons that little effect on currency apprecia- IMF “prescriptions fall short of issued a paper on Coherent conclu- are not yet fully understood, capi- tion.” The paper finishes by calling being sound advice for many devel- sions for the management of capital tal controls and related prudential for more research, and better under- oping countries” and instead capi- flows. This confirmed the step-back measures achieve their stated objec- standing of the impacts of different tal account regulations “should be from the IMF’s attempt to develop tives in some cases but not in oth- types of controls. seen as an essential part of the mac- a ‘code of conduct’ for capital con- ers.” Roberto Frenkel, of Argentinian roeconomic policy toolkit and not trols (see Update 76). Instead, they However, the discussion note NGO CEDES, speaking as mere measures of last emphasised that “there is no one- focuses on “countries that have at a May conference resort.” They pro- size-fits-all approach or rigid defini- already liberalised many types of on managing capital IMF pose a set of guide- tion of conditions for the use of cap- international capital flows”, not flows co-organised prescriptions lines for the use ital flow management measures.” countries such as China and India, by the IMF and the of such regula- While saying that measures should which have “comprehensive sys- Brazilian govern- tions, and call be “targeted to specific risks”, “reg- tems” that “allow for close monitor- ment gave an alter- “fall short for the IMF and ularly reviewed”, and “adapted or ing of flows and a calibrated tight- native perspective: of being other global reversed as destabilising pressures ening of controls when needed.” “The main reason bodies to “make abate”, they cautiously support the Even so, the discussion note finds why I think [capi- sound a stronger effort increasing use of capital controls that “controls are more effective in tal control] policies to reduce the and other capital account manage- countries [such as China and India] should be implemented advice” stigma attached to ment policies, by G20 and other that more heavily control capital is because of the effects capital account regu- countries. flows” but does not reflect on the that capital inflows have on the lations and protect the The IMF’s previous position that implications of this, or whether real exchange rate, which repre- ability of nations to deploy capital such controls should be used as a such controls have contributed to sent a threat [to] economic activity, account regulations to prevent and last resort (see Update 75) appears the marked economic success of employment and more generally on mitigate crises.” to be losing traction. The Fund rec- these countries in recent decades. the economic development of these The effectiveness of capital controls and ognised as much in its September Instead, the paper concludes countries.” prudential policies in managing large Multilateral surveillance report, which that: “capital controls lose their Alternative approach inflows, IMF says that “capital flow management effectiveness over time, as markets ◊ tinyrul.com/ tools are useful for changing the find ways to circumvent them”; Meanwhile, in November, Stephany IMFcapitalcontrolspaper composition of capital inflows.” that while controls can “change the Griffith-Jones and José Antonio This follows the line of an August composition of inflows” to encour- Ocampo, both of Columbia Griffiths-Jones et al: Capital account IMF staff discussion note, The effec- age longer term flows, they “have University, and Kevin Gallagher of regulations for stability and development tiveness of capital controls and pruden- little effect on overall flows” and Boston University, released an ◊ tinyurl.com/alternativeapproach tial policies in managing large inflows, “in most cases, controls also have issues paper calling for an alterna- 5 BRETTON WOODS UPDATE NUMBER 78 – NOVEMBER / DECEMBER 2011

ducing or increasing consumption IMF’s focus on austerity proved “wrong, taxes on basic products that vulner- able populations consume.” wrong, wrong”, say critics Conditionality: NGOs vs IMF While Christine Lagarde and staff at the Fund begin to acknowledge that too much austerity NGOs and the IMF remain at log- gerheads over a study on con- is risking jobs and growth and civil society groups call for an end to IFIs policy conditions, IMF ditionality being conducted by programmes continue to promote fiscal retrenchment. the Organisation for Economic Co-operation and Development The IMF special report for the of GDP “have risen during IMF- and more egalitarian and sustain- (OECD), a rich countries’ think October G20 finance ministers’ supported programmes at a faster able economic development.” tank. The OECD task team on con- meetings, Global Economic Prospects pace than in developing countries Meanwhile, a September report ditionality (TToC) is reviewing and Policy Challenges, suggested that as a whole.” It showed no impact of by UNICEF warns that “the cur- the experience of conditionality austerity measures may have gone IMF programmes on such spending rent wave of fiscal consolidation reform after the 2005 Paris decla- too far (see Update 77, 76, 75). The in middle-income countries. that is taking hold of developing ration on aid effectiveness. It will report stresses that advanced econo- However, the technical grounds countries … threatens children and submit reports ahead of the late mies “have scope to slow their cur- of the study were criticised by poor households’ survival, nutri- November 2011 Busan High Level rent pace of consolidation, if offset Brook Baker, policy analyst at tional growth and other rights.” Forum on Aid Effectiveness. Early by a commitment of additional US-based NGO Health GAP, who The report, which examines the lat- in 2011, a draft overview report tightening later,” and concludes that pointed out that “if the absolute est IMF government spending pro- for the TToC by development con- “the path to recovery has narrowed, value of GDP and/or government jections for 128 developing coun- sultancy firm Mokoro, found that but the path is still open, if action spending went down or remained tries, points out that although most “the available evidence suggests is taken now.” US-based economist stagnant as a result of structural countries introduced fiscal stimulus that restrictive macro-economic Paul Krugman argues the IMF’s adjustment and fiscal austerity, packages during 2008 and 2009, policies have meant that African report “is essentially a declaration then stable or slightly increasing since then “the scope of austerity economies have elected to save a that the focus on universal auster- percentages might not represent the has widened quickly.” significant share of increased aid ity was wrong, wrong, wrong”, and positive changes on real spending In order to identify the differ- flows instead of absorbing them in might be a sign that economists at that might have resulted from more ent adjustment options considered increased public expenditure or pri- the Fund “are rightly frightened by robust and expansionary fiscal and by governments, the study also vate sector growth.” Leaked emails the economic outlook.” monetary policy.” Baker also argued reviews policy discussions and show that at the insistence of the Kemal Dervis, former Turkish that “the IMF’s macroeconomic other information contained in IMF IMF, the TToC’s final version of the finance minister, said that “stimu- fundamentalism and its impact on country reports between January report was drastically altered with late now and announce future health has to be judged not just 2010 and September 2011. It finds a watered-down recommendation retrenchment can be the answer … against a cohort of even weaker per- that an increasing number of coun- that the process of setting macro- but the retrenchment must not cre- forming LICs, but against what was tries are considering adjustment economic targets should be opened ate anxiety about the future that possible if the IMF had been less measures like “wage bill cuts/caps, up to broader discussion. would nullify the stimulus.” dogmatic and more accommodat- subsidy reversals and rationalising In late September, Better Aid, an ing of more expansionary economic social protection schemes in order umbrella organisation of over 1000 Austerity threatens children policies that increased investments to achieve cost-savings; many gov- civil society organisations working Continuing previous debates on in health, education, job creation, ernments are also considering intro- on development effectiveness, sent the impact of IMF programmes on a letter to the task team expressing social spending (see Update 74, 72), G20 urges IMF to set up new lending window their “concern about the decision of an August IMF staff discussion note the chairs of the TToC not to submit presented an econometric analysis At their summit, G20 countries asked the IMF to set up a new short-term lending any message on conditionality for of the impact of IMF programmes window, called the Precautionary and Liquidity Line (PLL), which Lagarde said inclusion in the draft Busan out- on health and education spending would “provide increased and more flexible short-term liquidity to countries with come document” and called for “an in low-income countries (LICs). The strong policies and fundamentals facing systemic shocks.” The loans would be end of donor and IFI implicit and study, which uses data between over a six-month period. Media reported that the PLL would have a borrowing indirect policy conditions.” limit of five times quota. The PLL seems targeted at non-eurozone countries that 1985 and 2009 for 140 countries, Austerity measures threaten children and might be negatively affected by a renewed recession in Europe. finds that LICs’ education and poor households, Unicef health spending as a proportion ◊ tinyurl.com/UNICEFausterity

Inflation “obsession” IMF’s “trusted advisor” IFI’s macroeconomic IMF still divided on hurting Kenyan growth role to be scrutinised policy “anti-growth” gold sales windfall

Constraints placed on the central bank of The IMF’s Independent Evaluation Office “Why have the policy tutors performed so The executive board of the IMF continued Kenya’s monetary policy by the IMF have (IEO) released an issues paper describ- miserably and the pupils so brilliantly?”, to disagree, in an early September discus- been condemned as damaging to Kenya’s ing how it will assess whether the IMF wondered professor John Weeks of the sion, on what to do with the $2.76 billion growth. Writing in Nairobi’s Business Daily has strengthened its “trusted advisor” role School of Oriental and African Studies windfall profits from its 2009-10 gold sales in late September, banker Mohammed since 2005. It will look at how perceptions in an October article for Social Europe (see Update 75, 67). The sales aimed to Wehliye railed against IMF conditions of the Fund as an advisor have been Journal. He notes that developing countries fund an endowment for financing the which force the central bank to adopt a affected by new IMF surveillance and who embraced the World Bank and IMF’s Fund’s administrative costs such as salaries. monetary policy prioritising low inflation at advisory initiatives introduced after the macroeconomic orthodoxy have fared the The Board members remain split as to the expense of credit creation. He argued global economic crisis. It notes that previ- worst in recent crises, whereas those that whether to put the extra money toward the that “the IMF is not one to worry about ous IEO reports have found that countries have best weathered the storm have in endowment, the Poverty Reduction and our economic growth”. Noting that the are often wary of the IMF’s advice, citing common “exactly those sins/virtues absent Growth Trust, or precautionary balances in IMF’s “obsession” with low inflation had “inadequate knowledge of country-specific in the ‘advanced’ countries: willingness to light of heightened credit risk. The windfall, already failed in other African countries, he circumstances” and “a perceived lack of intervene with growth-enhancing policies”. which resulted from high gold prices at wrote that Kenya should be free to choose evenhandedness” as explanatory factors. Weeks cautions that advanced countries a time of global uncertainty, will remain its own economic priorities and not be The paper will focus on perceptions of IMF are now ready to apply “the neoliberal in the endowment account until another “locked into the IMF’s preferred ideological advice, but “not, however, assess the actual anti-growth Washington Consensus macro meeting on the subject in 2012. straightjacket.” impact of this advice.” policies” at home. ◊ tinyurl/goldsalesdelay ◊ tinyurl.com/wehliyeIMF ◊ tinyurl.com/ieopaperimfrole ◊ tinyurl.com/weeksifis 6 BRETTON WOODS UPDATE NUMBER 78 – NOVEMBER / DECEMBER 2011

Guest New IFC ventures with multinational corporations analysis In July 2010, the United Nations General Assembly passed a resolution analysis recognising access to clean water and sanitation as human rights. The evi- dence over the years has shown that pricing and privatisation means that water as a human right suffers immensely. Despite this, the IFC continues to promote the involvement of private Despite evidence, Bank still players in the water sector in several countries in Asia and Africa. In what critics say constitutes a conflict of interest, the IFC often provides technical promoting water privatisation advisory services to governments on water sector reforms, which recom- mend privatisation or PPPs, whilst acting as an equity investor in many By Gaurav Dwivedi, Manthan Adhyayan Kendra, India private water companies. The latest is Ghana, where the IFC is promoting private provision of Bank-funded private water projects across the world are facing water in villages through it’s “Safe water for Africa” partnership with Coca- serious financial, socio-political and operational problems, but Cola, Diageo and WaterHealth International (WHI, see Update 77). The IFC recent trends show that more such projects are coming up. announced plans to invest $1 billion in the water sector and now seems to prefer to use the WHI model to push private water delivery. In August, Indian policy research group Manthan Adhyayan Kendra A recent paper by US-based NGO Corporate Accountability International released a detailed study of the Khandwa water project, part-financed by asks: “what is the ulterior motive, or at least the commonality of interests the International Finance Corporation (IFC), the World Bank’s private sector between these corporations in financing WHI’s expansion? At least three arm. The project is a public private partnership (PPP) sanctioned under a strategic outcomes can be observed: (1) self-dealing (profiteering), (2) politi- central government scheme for building urban infrastructure in towns. This cal and cultural commodification of water, and (3) advancement of a self- model of urban infrastructure development through privatisation of public proclaimed ‘new global architecture’ for corporate control of water.” services, like water, is to be replicated across India. The IFC has invested $5 Continuing this trend further, the World Bank Group, lead by the IFC, million out of a total PPP investment of $39 million in two water and waste announced in October a new venture with global corporations includ- water projects, including Khandwa. ing Nestlé, Coca-Cola and Veolia called the 2030 Water Resources Group The study shows that even though this is a PPP project, the majority of (WRG) Phase 2. This aspires to “transform the water sector” by bringing the funding comes from public resources, including more than 90 per cent together multinational corporations with huge financial investment into of the capital expenditure of $28.8 million. The private operator will also the water business, which has been predominantly a public service in most charge the city for operation and maintenance under the agreement. countries. This venture has already received $1.5 million in IFC funding. The study finds that the costs to the the city would rise exponentially The group’s strategy is to insert the private sector into water management once the project begins delivering water, with operating expenses increas- one country at a time, through a combination of industry-funded research ing almost fourfold. Although the project is in the final phase of construc- and direct partnerships with government agencies. Currently, WRG is for- tion and will start operating shortly, it is still not clear if poor and low- mally working with the governments of Jordan, Mexico and the Indian state income areas will be provided with piped water. There are concerns that of Karnataka, with scaling up envisaged in South Africa and China. Vinay public water stand posts may be dismantled to reduce so-called water loss. Baindur, an expert on water and urban issues working in Karnataka, notes The initial project proposals show that the city wished to add several that the World Bank, the government and the private sector are working in measures to it, including a 24 hour supply requirement and wider distribu- “a tripartite partnership to expand the stake for profits.” He calls the expect- tion. However, when the bidding and tendering began these measures were ed water supply privatisation in at least six more towns “a very well coordi- dropped to make the project more profitable and less risky. nated move on part of the water companies and the World Bank.”

mal country level assessments. The Little currency for global money? central issue of traction, or rather the IMF lack of traction or influence While the G20 postponed decisions To tackle the global economic eurozone and Japan – pulls fewer over major economies, has been on issuing new special drawing imbalances that many argue were punches. It comes down on the recognised by many as being at the rights (SDRs), the IMF-managed an essential precursor to the current side of China in the ongoing argu- heart of the IMF’s failures in the international reserve asset, the IMF crisis (see Update 77, 75), the G20 ment over whether surplus or run up to the crisis (see Update 74). completed its surveillance review made only the usual affirmations debtor countries bear more blame The review notes that “interviewees and a new Fund report tackled the of the need to “move toward more for any negative impacts of global suggested that the Fund was insuf- thorny issue of global imbalances. market-determined exchange rate imbalances. While China’s gradual ficiently critical of the policies of its Expectations that the Cannes G20 systems”. However, in a September approach to increasing the value of major shareholders.” However, its summit might agree further issu- article, Jan Kregel of the Levy its currency “yields only modest recommends only to “bring external ance of SDRs (see Update 65) were Economics Institute argues that growth spillovers”, a tightening of views into surveillance to increase quashed, with the issue postponed this would entail a major change of US monetary policy (by for example its candor.” to the G20 finance ministers meet- policy in China and other fast- raising interest rates) “will reverse IMF assessments of exchange ing in February 2012. Meanwhile, growing developing countries. He the rise in emerging market capital rates caused most debate among an October IMF staff discussion concludes that “if we are going to inflows and currencies” — confirm- board members. The review prom- note, Internationalisation of emerg- ask developing countries to con- ing the analysis of a recent report by ised to “improve consistency and ing market currencies, reiterated past tribute to international stability by intergovernmental organisation the transparency of exchange rate anal- IMF arguments that the solution to growing less rapidly or shifting South Centre, that the boom in capi- ysis and ensure discussions of exter- the decline of the dollar should be strategy … this will come at a cost tal flows to developing countries is nal stability in staff reports extend the gradual use of other currencies to the developing countries in terms built on the fragile foundations of beyond exchange rates.” The IMF’s starting with the Chinese renmibi. of foregone income growth, which low interest rates in northern coun- executive board endorsed the Aldo Caliari, of US–based NGO should be offset by the developed tries (see Update 75). review’s recommendations. Center of Concern, called this a countries.” IMF surveillance review Compilation including Kregel article “narrow agenda that seeks to broad- The IMF’s first Consolidated spillo- ◊ tinyurl.com/FESmonetary en the currency basket not guided ver report, examining the effects In October, the IMF completed its by any particular rationale to make in other countries of the policies Triennial Surveillance Review, the first Triennial surveillance review the basket more stable and flexible, of five globally important econo- to assess IMF surveillance at the ◊ tinyurl.com/IMFtriennial but by geopolitical realities”. mies – the US, China, the UK, the multilateral in addition to its nor- 7 BRETTON WOODS WOODS UPDATE UPDATE NUMBER 78 – NOVEMBER / DECEMBER 2011

New World Bank corporate scorecard: IFIs admit failure to put jobs at the centre adding value? While the International Labour the Time article ”are the exact oppo- After discussions with the executive board and staff, but no public consultation, the Bank released a “corporate scorecard” in September, aiming to provide “a snapshot Organization (ILO) warns of social site of what the Bank has claimed of the Bank’s overall performance” to help “strategic dialogue between management unrest coming from record unem- without a shred of evidence over and the board on progress made and areas that need attention.” The Bank will issue ployment, the IMF and World Bank the eight years that it has published the scorecard annually. are being criticised for hindering Doing Business, namely that the The scorecard has four “tiers” of indicators ranging from the high level workers’ rights and not putting jobs most deregulated countries have development outcomes of tier one, such as population below the $1.25 poverty at the centre of recovery. the highest rates of growth.” measure, to organisational effectiveness issues covered under tier four. An August joint World Bank- A November report by the ITUC Some board members, such as the UK, are hoping it will drive performance IMF discussion note mentions con- reviews the evolution of the Bank’s at the Bank (see Update 77). However, availability of data heavily influences the cerns about a jobless recovery in approach to the ILO core labour selection of indicators, with the Bank admitting that “most scorecard indicators were largely selected from a broader set for which reliable data already exist.” advanced economies, and workers’ standards (CLS). The report wel- Elizabeth Arend of US-based NGO Gender Action said “the scorecard’s narrow vulnerability to shocks in develop- comes the Bank’s endorsement approach to gender issues is extremely disappointing. Critical indicators on health ing countries. At the same time, it of CLS over the last decade but and agriculture, for example, are not sex-disaggregated, making it almost impossible admits that their support to coun- laments that “the inconsistent adop- to judge whether real progress has been made. Criteria for other indicators is also tries “is not structured with that tion and application of the stand- questionable. For example, the scorecard measures ‘projects with gender-informed centrality of jobs in mind”, and that ards among the different divisions design’, but does not hold the Bank accountable for gender-informed project in their macroeconomic work they of the World Bank Group has cre- implementation, monitoring and evaluation.” “tend to assume that employment ated ambiguities and administrative World Bank corporate scorecard 2011 will be created if growth material- complications.” The enforcement of ◊ tinyurl.com/corporatescorecard ises.” CLS within the wider World Bank Although these statements sug- Group is likely to be a key issue gest a shift in the IFIs’ mental- during the Bank’s next safeguard ity in relation to jobs, this is not review (see Update 77). The ITUC IFC accused of standards breach over always translated into progress report also points out that trade Ugandan land grab on the ground (see Update 72). unions have detected 27 cases of An International Trade Union non-compliance by firms in which A September report by NGO Oxfam International includes criticism of forestry Confederation (ITUC) October com- the IFC has invested. It stresses that operations in Uganda in which the World Bank’s private sector arm, the International Finance Corporation (IFC), has a stake. More than 20,000 villagers muniqué criticised IMF-inspired while some of the unions’ com- claim to have been unjustly evicted from their homes by UK-based New Forests changes to Romania’s labour laws. plaints to the IFC “were responded Company (NFC) to make way for plantations. In the wake of criticism of the The government enacted the reform to quickly and corrective actions Responsible Agricultural Investment principles the Bank co-authored (see Update in April, weakening employment were taken expeditiously, in other 77, 76), Oxfam says the Ugandan case highlights “how the current system of protection, without first checking cases the response time was very international standards does not work.” whether it violated the European lengthy and no effective corrective The World Bank has called on NFC to investigate the alleged abuses, which the Union (EU) or ILO core labour action was taken.” IFC had noted in a field assessment even before investing in the private equity fund 78 standards. The new laws exclude that bankrolled the firm. The villagers claim rights to the land they were occupying, Bank angers trade unions some workers from the right to and had managed to win court orders restraining evictions which, they say, were not observed. Oxfam raises the prospect of breach of IFC performance standards union membership and introduce The Bank is currently drafting its regarding forced evictions, lack of compensation, and absence of prior consultation. obstacles to collective bargaining. social protection and labour strat- “There were no consultations,” father of nine Augustin Allen told Oxfam. “They cut In mid October, Sharan Burrow, egy for the decade 2012-2022. It down our crops, burnt and demolished our houses.” general secretary of the ITUC, recently published the results of the The IFC’s March 2010 field assessment observed NFC had been “unable to apply said that “the IMF prescription in first phase of consultations on the comprehensively its principles guiding resettlement”, and that “only a full social Romania contradicts the positive concept note. Although throughout audit of resettlement can provide sufficient evidence such that IFC can negate the signals about workers’ rights from the document the Bank emphasises allegations.” Yet two months later, the IFC invested $7 million in private equity fund its Washington headquarters” and that “more than 1,700 individuals Agri-Vie, in whose portfolio NFC sits. expressed fears that “governments and organisations provided their Oxfam notes that the case raises particular concern given the involvement of the IFC and other international funders claiming to adhere to social and environmental are dancing to the tune of the dis- views”, and the terms of reference standards. credited orthodoxies of IMF labour for the strategy say that the advi- and fiscal conditionality.” sory group will include CSOs, the ◊ tinyurl.com/ugandalandgrab ITUC complained that there was no Bank progress and pitfalls union or any other civil society rep- In October, the Bank released the resentativePublished by includedBretton Woods in the Project group. latest of their controversial Doing in co-production Francesca Ricciardone, with from the Business reports (see Update 73, 67, ITUC, explained that the report on 66). Peter Bakvis from the ITUC said first phase consultations ignores the new report confirms that “the practically all the recommendations Bank has not yet taken any action made by them, “notably the failure Published by Bretton Woods Project to correct the ‘Paying taxes indica- to provide an analysis of the global Critical voices on the World Bank and IMF tor’”, thus “encouraging countries jobs crisis and put forward solu- No permission needed to reproduce articles. Please pass to colleagues interested in to become tax havens, provide tions, failure to address growing the Bank and Fund, and let us know of other groups interested in getting the Update. insufficient social protection and income inequality, no mention of The Update is available in print, on the web and by e-mail. government services, or place an the role of unions and workers’ Subscriptions: www.brettonwoodsproject.org/subs unfair tax burden on workers and rights and no support for a social Spanish: www.brettonwoodsproject.org/es/boletin consumers.” Using data from the protection floor.” Phase two of the report, a November article from consultations is planned for Bretton Woods Project US magazine Time observes that “a November and December this year, 33-39 Bowling Green Lane, London, EC1R 0BJ, UK number of lower-ranked nations – and the Bank hopes to launch the +44 (0)20 3122 0610 including South Africa, China and new strategy in early 2012. Though +44 (0)20 7287 5667 Brazil – have had much faster-grow- the consultations are now open, the [email protected] www.brettonwoodsproject.org ing economies than the U.S. in the Bank is late in preparing a draft of past five years” and concludes that the strategy which is only expected The Bretton Woods Project is an ActionAid-hosted project, UK registered charity ”nations with more rules grow fast- to be released midway through this no. 274467. This publication is supported by a network of UK NGOs, the C.S. Mott er.” Bakvis argues that the results of consultation period. Foundation and Rockefeller Brothers Fund. ISSN 1471-1168 4 Designed by Base Eleven and printed by RAP Spiderweb on recycled paper.