World Bank and IMF meetings must not forget the poor in this financial crisis

Campaigns and Advocacy, Media Releases article written on the 07 Oct 2008

• The World Bank and IMF must tackle the food crisis that has left one billion people malnourished
• On climate change, the World Bank must base adaptation funding on community needs and channel more money into low-carbon technologies accessible by poor countries
• Reform of the World Bank must go further to ensure developing countries have a greater voice in decision-making

The World Bank and the IMF must cushion developing countries from the financial crisis that is threatening to hit them hard, while also tackling the challenges of food and fuel price increases, international agency Oxfam said today.
As Treasurer Wayne Swan heads to Washington on the eve of the financial institutions’ annual meetings, Oxfam said that nearly one billion people were now malnourished and 50 countries would remain at risk in 2009 due to price increases of fuel and basic food staples. This will make the effects of the financial crisis even more painful for poor countries.
Oxfam Australia Executive Director Andrew Hewett said the agency had written to the Australian Government stressing that the Bank’s work on climate change and internal reform of its voting power should be key issues for the four-day meeting that takes place in Washington DC from 9 – 13 October.
“This financial crisis means a triple whammy for poor countries,” Mr Hewett said. “The World Bank and the IMF must help cushion the harm that the global financial crisis will have on the world’s poorest countries. But it would be a mistake for them to turn their back on other urgent priorities such as tackling the food and fuel price crises. They also need to ensure poor countries have a seat at the table where decisions about their financial future are made.”
Mr Hewett called on the World Bank to update its five-year old agricultural strategy to reflect the new reality of the food price crisis. In the past, the Bank has pushed for a decreased role of the state in agriculture. This has clearly failed and the Bank needs to set out a new vision.
“The fight against global warming cannot be sidelined by the financial crisis either. The Bank has not thought enough about how to protect the most vulnerable communities from the impact of global warming,” Mr Hewett said.
The World Bank is also set to propose a new reform on the division of power within the institution – called the Voice Reform Package. The current ‘one dollar one vote’ structure – based on the size of a country’s economy – gives richer countries greater decision-making power.
The long called for reform would see developing countries have a greater representation on the Board of the World Bank. Although the reform is likely to lead to minor increases in some developing countries’ voting shares, it falls far short of true representation of developing countries in the Bank’s decision-making structure.
“Anything that comes up short of giving developing countries parity of the voting share will be insufficient. We need more than token change. Clearly, 21st century institutions cannot function on post-war rules,” Mr Hewett said.

For more information or to interview Andrew Hewett, please contact:
Laurelle Keough, Media Coordinator – Advocacy & Campaigns, on 0409 960 100