IF-EYE Newsletter

Issue #29

Thursday, February 14, 2008

A publication of the Bank Information Center

Welcome to the February 14, 2008 issue of the IF-EYE – the Bank Information Center’s bi-weekly synthesis of key developments concerning international financial institutions. This issue details the withdrawal of a coalition of civil society organizations from consultations on the Asian Development Bank's Safeguard Policy update as well as Iraq's renewal of a loan from the International Monetary Fund. 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: NGOs cease talks with ADB on crucial environmental and social update

4. SPOTLIGHT: Iraq renews $744 million loan from the IMF

5. Announcements and Resources

6. New at BIC: Job openings at BIC!

1. IFI Updates

Bank President reiterates support for agriculture at African Union summit

2/8/2008 World Bank

During his first visit to Africa since becoming World Bank President, Robert Zoellick attended the African Union (AU) summit in Addis Ababa, Ethiopia, marking the first time a World Bank head has addressed the pan-African body. During the meeting, Zoellick signaled to the AU his institution’s desire to significantly increase its commitment to the sector in Africa.

Read more (BIC website)

Zambia to revise “unfair and unbalanced” mining tax rates set by World Bank

2/7/2008 Government of Zambia

During a recent address to Zambia’s parliament, President Levy Mwanawasa announced the cancellation of tax breaks for mining companies operating in the country’s lucrative copper sector. Calling the present rates “unfair and unbalanced,” the president proposed a new tax regime “in order to bring about equitable distribution of the mineral wealth.”

Read more (BIC website)

China’s Lin named chief economist of World Bank

2/4/2008 World Bank

Justin Yifu Lin, a leading Chinese academic, was named as the World Bank's new chief economist. The move is expected to help strengthen ties between China and the World Bank.

Read more (BIC website)

World Bank names China's Lin as top economist by Lesley Wroughton, February 4, 2008, (Reuters website)

Zoellick commits to expanding Extractive Industries Transparency Initiative

2/4/2008 World Bank

Addressing the African Union Summit, World Bank President Zoellick committed to expanding the Extractive Industries Transparency Initiative (EITI). Zoellick indicated that the World Bank's role in promoting EITI could range from assisting governments in negotiating contracts to providing expertise in public expenditure management reform.

Expand Oil, Mining Sector Transparency-Zoellick, February 1, 2008, (World Bank website)

IMF outlines its work program for early 2008

2/4/2008 International Monetary Fund

The International Monetary Fund’s (IMF) interim work program for 2008, discussed by the Board in December 2007, aims to swiftly overhaul the institution. Managing Director Dominique Strauss-Kahn has taken significant strides to address, in his words, “the twin issues of the Fund’s relevance and legitimacy, and the Fund’s financial soundness.”

Read more (BIC website)

Iraq to cut food subsidies

2/1/2008 Republic of Iraq

The Arab newspaper Azzaman reported that the Iraqi government plans to reduce its food rationing program "in line with the obligations it has made to the World Bank." According to Reuters, Iraq's Trade Minister said in a statement that the number of items in the food packages will be reduced from ten to five. The food rationing system was set up by Saddam Hussein in 1990 as a response to United Nations sanctions and, according to a World Bank study, 60 percent of Iraqis still rely on the rations to meet their basic needs.

Iraq to scrap subsidized food rations by June by Ali Jawad, Azzaman, January 31, 2008 (Azzaman website)

Iraq must cut food rations in 2008-trade minister, Reuters, December 6, 2007 (Reuters website)

Read more (BIC website)

Zoellick pledges support for post-conflict countries during Liberia visit

2/1/2008 World Bank

During his recent visit to Liberia, World Bank President Robert Zoellick announced that the Bank would seek to re-engage with and provide financing more quickly to post-conflict countries. According to Reuters, Zoellick also spoke of the need to “speed up the process of clearing the arrears of countries that have fallen behind in payments to multilateral lenders.”

World Bank urges post-conflict help for West Africa by Lesley Wroughton, January 30, 2008 (Reuters website)

Read more (BIC website)

2. Civil Society Highlights

Jubilee USA report on conditions and debt relief

2/12/2008 Jubilee USA

Jubilee USA has released the third in its series of Briefing Notes. This one is titled, "Are IMF and World Bank Policy Conditions Undermining Debt Cancellation?" The piece explores one of the big remaining challenges Jubilee is working on - to cut the harmful conditions still attached to debt relief.

View the Briefing Note (Jubilee USA website)

Campaign to stop EBRD Bautino II project in Kazakhstan

2/11/2008 Multiple organizations

The European Bank for Reconstruction and Development (EBRD) is on the verge of financing Bautino II, the second phase of the construction of the Bautino/Atash Marine and Supply Base on the eastern coast of the Caspian Sea. This project is the main infrastructure serving the off-shore artificial islands developing the Kashagan oil field in Kazakhstan, located in the northern part of the Caspian Sea. International and local civil society organizations (CSOs) have raised concerns about adverse social and environmental affects of this project. Multiple CSOs have prepared a joint letter demanding that the EBRD suspend financing of the Bautino/Atash Marine Base.

If your organization is interested in signing on to the letter, please contact Sonia Zilberman at: szilberman@bicusa.org.

View the Sign On Letter to EBRD (Acrobat pdf, 27 KB)

Read more (BIC website)

BIC joins More and Better campaign

2/4/2008 Bank Information Center, More and Better Campaign

BIC recently joined the international More and Better campaign to support the global effort to eradicate hunger and poverty. The More and Better campaign advocates for “increases to both the quantity and quality of assistance for agriculture, rural development and food as, an important part of eradicating extreme poverty and hunger.” The campaign is closely linked to the goals of the Food and Agriculture Organization of the United Nation’s International Alliance Against Hunger (IAAH) and the achievement of the Millennium Development Goal to reduce hunger and poverty.

Read more (BIC website)

Visit the More and Better campaign website

Norwegian Debt Campaign report on Chinese lending in Africa

1/31/2008 Norwegian Campaign for Debt Cancellation, Eurodad

The Norwegian Campaign for Debt Cancellation (SLUG) has released a new report, "China in Africa: lending, policy space and governance", that is available on Eurodad's website. The report finds that Chinese lending is generally welcome in Africa and that loans that China provides often contribute to financing infrastructure and other projects that African countries need.

New Eurodad report on aid effectiveness in Sierra Leone

1/18/2008 Eurodad

Eurodad has published a new report on aid effectiveness entitled, “Old habits die hard: aid and accountability in Sierra Leone”. The report reviews aid in this impoverished and aid dependent country.

3. SPOTLIGHT: NGOs cease talks with ADB on crucial environmental and social update

2/11/2008 NGO Forum on ADB, Bank Information Center, Oxfam Australia

Non-governmental organizations (NGOs) from different parts of the world have halted their on-going consultative talks with the Asian Development Bank (ADB) over the latter’s significantly weakened consultation paper on its environment, involuntary resettlement and indigenous people's policies, collectively known as the "Safeguards Policies."

The coalition of civil society organizations from Asia, Europe, Australia and the United States urged ADB to resume public consultations only after it has issued a re-written its Safeguards Policy Statement (SPS), that no longer promotes “weak protective measures” for the environment and people affected by its operations. The move to cease discussions builds on actions taken by South Asian NGOs that boycotted the New Delhi consultation on January 16- 18.

Both BIC and Oxfam Australia have closely followed the review of the Asian Development Bank’s (ADB) Safeguards Policies since it was first announced in August 2005. Both organizations believe the dilution and weakening of the October 2007 Consultation Draft of the Safeguard Policy Statement (SPS) contradicts assurances the ADB publicly made on several occasions, and both have stated that unless revised, the current consultation process is not worthy of further engagement. Oxfam Australia decided not to participate in the Australia/Pacific consultations on January 30 – 31, and BIC has not attended any of the ADB consultations.

Read more (BIC website)

For more information and analysis on the ADB's revision of its Safeguard Policies, see BIC website.

Read the letters submitted by NGO Forum on ADB which elaborate on their decision:

NGO Forum on ADB Disengagement Letter Feb 7, 2008, NGO Forum on ADB, February 7, 2008. (Acrobat pdf, 30 KB)

NGO Forum Letter to ADB President Kuroda Regarding Disengagement, Feb 7, 2008, NGO Forum on ADB, February 7, 2008. (Acrobat pdf, 23 KB)

Read the letters sent by BIC and Oxfam Australia informing the ADB of their decision to not participate in the public consultations on the draft Safeguard Policy Statement:

BIC Communication on Asian Development Bank Safeguard Policy Update, Bank Information Center, January 11, 2008 (Acrobat pdf, 128 KB)

Oxfam Letter Calling for Halt in Asian Development Bank Safeguard Policy Update Process, Oxfam Australia, January 29, 2008 (Acrobat pdf, 85 KB)

4. SPOTLIGHT: Iraq renews $744 million loan from the IMF

2/13/2008 Bhumika Muchhala, IMF Program, Bank Information Center

The Executive Board of the International Monetary Fund (IMF) approved US$744 million for Iraq in a renewed Stand-By Arrangement (SBA) loan program on December 19, 2007. The arrangement will cover a 15-month period, concluding in March 2009. Iraqi government officials are to treat this agreement as “precautionary,” implying that they do not intend to use these resources.

Iraq became qualified for this SBA program when it repaid its entire outstanding debt of $470.5 million to the IMF on December 12, 2007—a full two years before it was due. Iraq had acquired this debt to the Fund under an Emergency Post-Conflict Assistance program that began in September 2004. Managing Director of the IMF, Dominique Strauss-Kahn, applauded Iraq for its economic reforms over the years, stating that “Iraq’s ability to repay the IMF ahead of schedule reflects its strong international reserve position against a background of high oil prices.”

The key components of Iraq’s SBA program reflect the standard mix of ingredients that comprise the IMF’s ideology of a strong macroeconomic policy package: to speed up economic growth and build up foreign reserves while maintaining low inflation, a small fiscal deficit, and liberal investment and trade policies.

One of the primary goals of the newly installed SBA program is to significantly expand the oil sector through pumping investments, stimulating oil output, and liberalizing oil imports. The extent of the IMF’s reach in Iraq’s oil sector is substantial and will have critical long-term effects for the economic development of the country.

Read more (BIC website)

5. Announcements and Resources

Friends of the Earth International has launched its annual photo competition, which will gather photos from around the world on the theme of Inspiration, Hope and Possibilities for a Better World. The best shots will feature in Friends of the Earth International's 2009 wall calendar, greeting cards, and other materials.

The deadline for entries is April 1, 2008.

Find out more about the photo competition (Friends of the Earth International website)

6. New at BIC: Job openings at BIC!

Development Director: BIC is seeking a Development Director, who will serve as the chief fundraising officer for BIC. The Development Director will work closely with the Executive Director and Regional Program Managers in identifying and pursuing funding leads for BIC’s Asia, Europe, Latin America, Africa, Policy, and Information Services programs. The Development Director will be expected to: Develop and execute both short and long-term fundraising efforts of BIC; take the lead in framing, preparing, and maintaining grant proposals and reports to donor foundations; and identify and pursue potential funding opportunities, and strengthen existing donor relationships.

Internship: BIC is looking for an intern (full-time) for its Europe and Central Asia Program. This a paid internship based in Washington, DC. 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.

Get full details of these positions on BIC's jobs and internships page (BIC website)

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