IMF/World Bank: Power Grabs and Dirty Secrets, Reports International Development Agency
WASHINGTON, July 2 /PRNewswire-USNewswire/ -- The World Bank and International Monetary Fund (IMF) are in trouble, says the international development agency, ActionAid. With recent power upsets at both institutions, poor nations and global civil society are taking a closer look at how the institutions govern themselves -- and not liking what they see.
While World Bank and IMF policies directly impact millions of those living in the developing world, the institutions' leaders have traditionally been selected unilaterally by the US, in the case of the World Bank, and by Europe, in the case of the IMF. Poor countries, which are demanding more say in the selection process, have been thus far ignored.
Currently, the US and Europe control some 50% of World Bank/IMF voting shares, while Africa, which is most affected by the institutions' policies, controls a mere 5%.
"Already damaged by the Wolfowitz scandal, the World Bank lost further credibility last month when the US insisted on installing Bob Zoellick as its President. Developing countries saw this as a deliberate snub to their demand for a greater say in Bank policies," says Anne Jellema, ActionAid Policy and Campaigns Director.
"Europe's dirty little secret is it acquiesced to the US power grab at the World Bank out of self-interest to maintain its own crumbling empire at the IMF. This is the direct result of an antiquated gentleman's agreement between Europe and the US that divides power without the inconvenience of a democratic process," says Amy Gray, ActionAid IFI Liaison Manager.
"The carve-up of top posts between the US and Europe is only the tip of the iceberg of monopoly power threatening to sink both institutions. Without fundamental reforms to give poor countries a fair say in IMF decision-making, introducing a new way of choosing the Fund's head will be like voting on a new captain for the Titanic," adds Jellema.
"Now that the Managing Director of the IMF has announced his resignation, Europe has been handed a silver platter upon which to heap leadership and example. By introducing a transparent, merit-based selection process for the next Managing Director, and giving up some of its voting share in line with democratic principles to African, Latin American and Asian nations, Europe can seize the higher ground," says Sandeep Chachra, ActionAid International Governance Coordinator.
Amidst calls for the US and Europe to give up their archaic "rights" to award the number-one positions at the World Bank and IMF, experts warn that such reforms must also be paired with greater voting power for developing nations, if the institutions are to maintain relevancy.
"It's time that the countries most impacted by World Bank and IMF policy are allowed a fair voice through a truly democratic process," says Jellema.
ActionAid is an international anti-poverty agency working in over 40 countries, taking sides with poor people to end poverty and injustice together. http://www.actionaid.org/
Contact: Sandy Krawitz of ActionAid USA
+1-202-492-7207
CONTACT: Sandy Krawitz of ActionAid International, +1-202-492-7207,
Web site: http://www.actionaid.org/
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