IF-EYE Newsletter

Issue #18

Friday, June 15, 2007

Welcome to the June 15, 2007 issue of the IF-EYE – the Bank Information Center’s bi-weekly synthesis of key developments concerning the international financial institutions.

This issue highlights the Annual Meetings of the European Bank for Reconstruction and Development (EBRD) and the Inter-American Development Bank (IDB). It also shines light on continuing concerns over the World Bank presidential selection process. The United States has nominated Robert Zoellick to the position, and World Bank member governments appear to be lined up to follow the US' lead - in spite of longstanding calls for a more democratic, merit-based process.

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: The 48th Annual Meeting of the Board of Governors of the Inter-American Development Bank: A Civil Society Perspective
4. SPOTLIGHT: Report from the 2007 Annual Meetings of the European Bank for Reconstruction and Development
5. SPOTLIGHT: Bush nominates Robert Zoellick as next World Bank President; other governments seem to accept ‘one horse race’
6. New at BIC: BIC welcomes Middle East/North Africa Program Manager Amy Ekdawi

1. IFI Updates

Jubilee Act introduced in US Congress

7 June 2007 | US Government

Representatives Maxine Waters (D-CA) and Spencer Bachus (R-AL) introduced the Jubilee Act H.R.2634. If passed, the bill would cancel the debt of approximately 67 impoverished countries in the Global South. Read more on the Jubilee USA website.

World Bank to pilot carbon fund for avoided deforestation

June 2007 | World Bank

The World Bank is preparing to announce a new $250 million fund aimed at using carbon finance to reduce emissions from deforestation. According to recent news reports following the G8 summit, world leaders have encouraged the Bank to move forward with plans to create a Forest Carbon Partnership Facility (FCPF), which would leverage private investor money and donor contributions to help countries develop strategies for avoiding forest degradation and secure payment for forest-related emissions reduction, through the creation of tradable carbon credits. Deforestation and poor land use management are responsible for approximately 20% of global greenhouse gas emissions each  year.  While many environmentalists recognize the need to provide incentives for the protection of the world's remaining forests, there are concerns that moving too fast with emissions credit trading schemes will enrich Wall Street investors, multilateral banks and elite governments positioning themselves to profit from the burgeoning market, without guaranteeing any real, long-term benefits for the planet and forest-dependent communities.  Read more on BIC's website.

Assessment of controversial Camisea project appears to omit impacts on people and the environment

11 June 2007 | IDB

An environmental and social impact assessment commissioned by the Inter-American Development Bank (IDB) to justify the expansion of the controversial Camisea gas project in a highly sensitive part of the Peruvian Amazon appears to omit fundamental criteria including damage done to biodiversity and health impacts on indigenous communities. Revelations of these weaknesses came during a public hearing at the IDB’s headquarters in Washington D.C. Civil society groups are calling for a truly independent audit of the project, among other things. Read more on BIC's Latin America webpage.

World Bank ‘sees green’ in G8 declaration

6-8 June 2007 | World Bank, G8

While civil society groups have expressed disappointment at the G8’s failure to take any bold steps on climate change during the recent summit in Heligendamm, Germany, the World Bank has praised the meeting outcomes and applauded the emphasis on market mechanisms to combat climate change. Read more about the G8 summit and civil society statements on the BIC website.

Asian Development Bank releases draft Energy Strategy for comment 

7 June 2007 | ADB

The Asian Development Bank has opened its draft Energy Strategy for public comment through July 27, 2007. The paper requires the ADB to assist its member countries to meet energy security needs and help them transition to a low carbon economy. However, according to critics it does not convey exactly how ADB investments will facilitate such changes, nor clearly commit the institution to renewable energy projects. Many are also concerned by the paper’s lack of transparency provisions. Read more on BIC's ADB webpage.

World Bank and China Export Import Bank team up on lending to Africa

4 June 2007 | World Bank, China Exim

Both the World Bank and International Finance Corporation (IFC) have recently agreed to intensify their work with China’s Export Import Bank. The collaboration will focus on large infrastructure. Many see the move as an attempt by the World Bank Group to avoid growing competition from its Chinese counterpart. Read more on BIC's Africa webpage.

US House Committee Chairmen call on Bush to seek "right mix" of skills in next World Bank President

29 May 2007 | US Government

Stressing the importance of a merit-based selection process, Representatives Frank, Obey, Rangel and Lantos emphasized that the best candidate for the job need not be American. Their statement comes after a May 22 hearing of the House Financial Services Committee on the effectiveness of the World Bank. World Bank Executive Directors are expected to make a final decision on the next president at the end of June. Read more on the BIC website.

IDA 15 Deputies prepare for upcoming Mozambique meeting

28-30 June 2007 | World Bank

The second Deputies meeting of the World Bank’s 15th International Development Association replenishment process (IDA 15) will take place in Maputo, Mozambique June 28-30, 2007. The process will secure commitments from donors to provide resources for low-income countries supported through IDA, the Bank’s concessionary lending arm, to cover the period 2008-2011. Bank member country representatives participating in the process, known as IDA Deputies, identified fragile states, development effectiveness and the comparative advantages of IDA as key themes for discussion. African civil society leaders are also expected to attend the meeting.  Read more on BIC's IDA 15 webpage

2. Civil Society Highlights

New report: Coping with Climate Change and Environmental Degradation in the Niger Delta of Southern Nigeria

June 2007 | Nigeria's Community Research and Development Centre (CREDC)

Report analyzes the impacts of climate change in the Niger Delta and the adaptation strategies being undertaken by Niger Delta communities. Read the report on the Oil Change website.

Campaigners call on G8 nations to declare vulture fund profiteering illegal

June 2007 | Jubilee Zambia, Jubilee USA Network, Jubilee South, Erlassjahr.de, Jubilee Australia, Eurodad, Afrodad, Oil Change International, PAPDA, CADTM

Read the statement on the CADTM website

Who should be the next World Bank President? Take the Social Justice Committee poll

June 2007 | Social Justice Committee

Since the World Bank was established, its Board of Directors has always accepted the candidate nominated by the United States as its president. However, this need not be the case. According to the Bank’s Articles of Agreement, any member country may nominate presidential candidates. Let the Government of Canada know who you want as the next President of the World Bank by voting on the Social Justice Committe website. Results will be sent to Canadian officials. Take the poll

New guide: World Bank's Indigenous Peoples Policy

June 2007 | Forest Peoples Programme (FPP)

New "Forest Peoples Program Guide to IFI Standards: An Independent Community Guide to the World Bank's Indigenous Peoples Policy (OP/BP 4.10)" summarizes some of the key provisions of the World Bank's safeguard policy on indigenous peoples. It is based on the FPP's own reading of the policy's mandatory requirements on Bank staff and borrowers. The guide aims to inform affected peoples, their representative organizations and their supporters about the policy. It intends to help them to improve, monitor, question or challenge Bank projects if they believe the Bank is not following its own rules and has not respected the rights of affected communities. Read the guide on the FPP website.

Petition on World Bank governance reform gains momentum

June 2007 | Various organizations

The urgent recommendation to World Bank and IMF Executive Directors on leadership selection reform at the World Bank and the International Monetary Fund currently has over 600 signatures.

Read the petition on the New Rules for Global Finance website.

3. SPOTLIGHT: The 48th Annual Meeting of the Board of Governors of the Inter-American Development Bank: A Civil Society Perspective

23 May 2007 | by Vince McElhinny, Latin America Program Manager, Bank Information Center

The Inter-American Development Bank’s 48th Annual Meeting and the Third Continental Summit of Indigenous Peoples and Nations were both held in Guatemala in March. The IDB announced a new wave of initiatives over the course of the five-day meeting, including: Opportunities for the Majority, a Clean Energy Initiative, a Water and Sanitation Initiative, expansion of the InfraFund to finance more infrastructure feasibility studies, debt forgiveness to five IDB borrowing countries, and subscriptions to a trade finance facility, among others. The Bank’s unmitigated optimism about these new programs left many wondering why so little was said about the results of older programs launched with similar zeal at past Annual Meetings.

Major announcements and developments included:

• The Venezuelan Finance Minister's announcement that the newly inaugurated Banco del Sur will open its first office in Caracas by mid-year. The bank has already confirmed $1 billion in operating capital, which its expects to grow to $7 billion this year. 
• The U.S. decision to sign a memorandum of understanding paving the way for China’s accession to the Directorate of the IDB – in recognition of China’s growing influence in Latin American investment and trade. The Governor of the People’s Bank of China and IDB President Moreno signed an agreement to guide negotiations toward China becoming the Bank’s 48th member country and third Asian member after Japan and Korea.
• The Board resolution on Multilateral Debt Relief and Concessional Finance Reform, which provides $4.4 billion in debt to the five Fund for Special Operations (FSO) countries, while at the same time ensuring the sustainability of the FSO and Intermediate Financing Framework (IFF) window. The IDB forgave $1.4 billion for Honduras, $1 billion for Bolivia, $984 million for Nicaragua, and $467 million for Guyana. The plan also includes $525 million in debt relief for Haiti beginning in 2009 after the country meets a series of technical requirements.

Read more, including details on IDB President Moreno's meeting with civil society representatives, the Sustainable Energy and Climate Initiative (SECCI) and the Infrastructure Fund on BIC's IDB webpage.

4. SPOTLIGHT: Report from the 2007 Annual Meetings of the European Bank for Reconstruction and Development

20-21 May 2007|EBRD

The European Bank for Reconstruction and Development (EBRD) held its Annual Governors Meeting in Kazan, Russia May 20-21, 2007. The EBRD chose Kazan, the capital of Tatarstan Republic, as the site of the meeting to symbolize its new emphasis on investing in more distant, “frontier” regions of Russia. The simultaneous NGO Programme attracted a wide array of civil society organizations from Russia and abroad.

While many questions were left unanswered by the Bank, NGOs succeeded in raising issues of critical importance to civil society in Russia and elsewhere, including:

• Human rights were at the forefront of the concerns voiced by Russian NGOs. The government’s restrictions on civil liberties and recent legislation targeting NGOs have made it very difficult and sometimes dangerous for civil society to operate in the country. The Russian NGO community asked EBRD to use its leverage to promote transparency, democracy and free speech in Russia. Although the Bank’s charter affirms its commitment to the principles of multiparty democracy and respect for human rights, and the Bank invests 38 percent of its portfolio in Russia, Bank officials made no commitments to pressure the Russian Government to change its policies toward NGOs.  It only promised to continue the dialogue with Russian human rights advocates.
• The disbursement of EBRD’s record net profits of Euros 2.4 billion was also a major issue of contention and political debate. Some member governments, including the United States, argue that the profit should be distributed to member countries as a dividend. Many NGOs advocate that the profits should be used to create a targeted energy efficiency fund to promote transition impacts in the regions—the core mandate of EBRD.
• The EBRD’s revision of its Environmental Policy was another central item on the agenda. The Bank disclosed a Discussion Paper on the policy shortly before the meetings, which presented options for revision of its environmental and social policies. Among those options is a proposal to adopt a broad framework, comprised of an Environmental and Social Sustainability Policy and Performance Standards similar to those of the International Finance Corporation.  It quickly became apparent that there may be strong disagreements within the Bank over the language and content of the new environmental policy. The definition of project boundaries, indigenous peoples consent, and a two-pronged project classification system were highlighted as areas for civil society support and input.
• Mongolia's signature of an MoU with the EBRD, ADB and the World Bank Group to develop the country's mining sector also spurred debate about the impact of mining on development. 

Read more on BIC's EBRD webpage.

5. SPOTLIGHT: Bush nominates Robert Zoellick as next World Bank President; other governments seem to accept ‘one horse race’

The White House’s nomination of former US Trade Representative Robert Zoellick to be the next World Bank President, and the widespread assumption that the choice is a fait accompli, serve as an important reminders that the lessons of the Wolfowitz scandal have yet to be learned. 

Recent revelations of secrecy, nepotism and patronage at the highest levels in the Bank have exposed the need for a fundamental overhaul of the Bank’s governance structure, beginning with greater openness in the presidential selection process and transparency in Board operations. In weeks past, numerous experts, Bank employees, public personalities, and newspaper editorial boards echoed the call for an open, democratic and merit-based process for choosing the next Bank president. But now, no one seems to be contesting the Bush administration’s continued control of the presidency. How the Bank’s member countries go about replacing Wolfowitz will be an important litmus test of their will to practice what they preach. If not now, then when?

Even the Boards of the Bank and Fund tacitly admitted the flaws in their leadership selection processes by convening special committees in 2001 to devise procedures for open, competitive processes based on merit, not national origin. But the US and Europeans have jealously guarded their naming privileges, ignoring all calls for reform.

Now is the time for governments to put forward alternate names for the post. The Board gave member countries a June 15th deadline to propose candidates. If other countries allow the US nomination to go ahead unchallenged, they will be complicit in the continued poor governance of the institution. The World Bank’s Board of Directors will make a final decision at the end of June. Thus far only a handful of countries, including Brazil, Australia and South Africa, have publicly called for a more open process, and none have yet proposed candidates.

While some groups have raised concerns about Zoellick's track record and management abilities, a discussion of Zoellick's qualifications should not take place until there is genuine competition for the job.

Meanwhile. Zoellick has begun a ‘listening and learning’ tour of Africa, Europe and Latin America. During his first stops in Ghana, Ethiopia and South Africa, Zoellick made it clear that as World Bank president he would continue to support the Bank's focus on Africa and the recent Governance and Anticorruption Strategy, as well as infrastructure development and regional integration on the continent.

Read a compilation of public statements on Zoellick on BIC’s website, as well as more on his tour of Africa. Read the latest banter on the selection process on worldbankpresident.org.

6. New at BIC

BIC welcomes new Middle East/North Africa Program Manager Amy Ekdawi! Formerly the Co-Director of People's Advocacy, Amy will launch BIC's new work in the MENA region. Amy has worked with civil society organizations in the USA and Egypt, her native country. She is a community organizer, an activist, a trainer and a program designer. She was also a founder and board member in many organizations including the United States- Egypt Friendship Society and the Alliance of Egyptian Americans. Amy also represents the Coptic Orthodox Church in the Social Justice and Advocacy Commission of the National Council of Churches of Christ of USA. She is also a member of the advisory committee for the Arabic version of Women’s e-News. Contact Amy at: aekdawi@bicusa.org.

BIC is growing! BIC is now hiring for several exciting positions based in Washington, Bangkok and Lima/Peru. Read more on the BIC website