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Executive summary
The World Bank and the International Monetary Fund
(IMF) call for democracy, openness and accountability
in the developing countries where they work. But their
own activities fall far short of such an ideal. The loans
that they make to poor countries lack transparency,
and their board structures are far from democratic.
Their leaders are only selected from the United States
and Europe, and never from the developing world.
Instead of one country member, one vote, power is
allocated according to how wealthy the countries are.
This means that poor nations – where the World Bank
and IMF wield the most power – have the least say in
the way the institutions are run and the decisions they
take. The US is the only country with enough votes to
block board decisions on its own. By contrast, the
world’s poorest countries cannot block a decision
even if they all join together.
Many of the richest countries – including the US, UK,
Germany, France and Japan – each have a seat to
themselves on the boards. Meanwhile, poor countries
are bundled together in large groups represented by
one individual. For example, in each of the boards of
the World Bank and IMF, just two board members
represent a total of 44 African countries. It is a
near-impossible job to be familiar with, let alone fight
for, all the issues that are important to all the countries
they represent.
Rather than supporting democracy, the World Bank
and IMF can often undermine it. In its February 2003
budget, the government of Ghana announced
increases in the tax on imported rice and poultry. This
was part of a broad approach to improve the lives and
businesses of Ghanaian farmers, and to counter the
heavily subsided imports from the US and Europe.
Although the tariff increases were well within the limits
set by the World Trade Organisation – a body
established to expand trade within a set of
international agreements – they were suspended after
a series of hurried meetings between the IMF and the
government. This increase in tariffs would have been
against all previous advice given to the government by the IMF and other donors. The Ghanaian parliament
has yet to be informed about the suspension.
Decisions that can transform the lives of hundreds of
thousands of people – for worse, as well as for better –
are frequently made behind closed doors. For
example, when the World Bank provided funding for a
dam in Lesotho in 1998, the communities involved
knew little about the deal struck between their
government and the Bank. Partly because they
weren’t able to feed in their views, the project has led
to problems over access to water and land.
Christian Aid believes that both institutions can play a
role in supporting growth and development around
the world. But it is calling for a change in the way in
which they work, bringing them into line with what we
expect from modern, international organisations.
Firstly, poor countries must have a bigger say in
how they are run. They should have more seats at
the table; and rich countries should have
correspondingly fewer. The voting power of poor
countries must also be strengthened.
Next, the leaders of the World Bank and IMF should
be selected on merit, regardless of nationality: these
posts should not be reserved for the most powerful
countries. Money must also be made available to
increase staffing levels and capacity in developing
countries’ offices at the World Bank and IMF.
Finally, all board decisions affecting developing
countries should be written up in detail and published
within two weeks, in print and on the internet, allowing
people to monitor who votes for what. Details of those
decisions must be widely publicised in the countries
where they will come into effect, and scrutinised by
national parliaments.
Only then will poor countries and their peoples have a
proper say on the work of the World Bank and IMF,
contributing in turn to programmes that are more
effective in promoting growth and poverty reduction.
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