G-20 Must Demand IMF Management Reforms
For Immediate Release
September 21, 2009
Contact: Jo Marie Griesgraber, New Rules for Global Finance
202-277-9390, This e-mail address is being protected from spambots. You need JavaScript enabled to view it
WASHINGTON, D.C., September 21, 2009 – The leaders of G-20 nations meeting in Pittsburgh this week must urge that the International Monetary Fund (IMF) undertake reforms of its management structures and processes sooner, rather than later, according to a leading advocacy group, New Rules for Global Finance. Reforms should make the IMF’s governance and policies better — not just bigger — that is, more inclusive, accountable and transparent, which will in turn produce changes that can result in improved outcomes for poor countries and poor people.
In April in London, G-20 leaders gave the IMF a lead role in combating the effects of the international financial crisis, especially in poor countries. The G20 also promised to triple the IMF’s lending resources by an additional $750 billion. However, many civil society organizations have expressed concern that this dramatic boost in the IMF’s resources and influence has not been accompanied by corresponding changes in the institution’s policies and practices.
Yet governments and societies, especially in developing countries which borrow from the IMF, lack the means to hold the IMF responsible for its actions. “Without greater accountability and transparency, we few means of demanding the IMF act in the interests of people suffering most from the economic crisis,” asserts Jo Marie Griesgraber, Executive Director of New Rules for Global Finance.
The IMF is currently engaged in a four-phase review of its decision-making structures and procedures. In one phase of this review, the IMF invited New Rules for Global Finance to lead a process of consultation with civil society leaders throughout the world to gather opinions and ideas about needed reforms. Over the past four months, New Rules has solicited written comments and conducted six video-conferences with civil society representatives in Latin America, Africa, South Asia and Central Asia.
A primary concern raised by CSO participants in the consultations was the skewed distribution of voting power on the Executive Board, which heavily favors a small number of wealthy nations. Indeed, the 24-member Executive Board consists of eight members who each represent a single country and 16 members who represent the remaining 177 countries. As a result, Executive Board members who represent multiple countries – in many cases some of the poorest countries of the world – are hard-pressed to establish relationships with their large and diverse constituencies.
Civil society participants also sought greater access to information about IMF decisions. Executive Board proceedings are made public only 10 years after they occur, making it impossible for individuals or groups to contribute to their representative’s decisions. Furthermore, the IMF lacks formal mechanism for outside groups to register concerns or complaints. Neither are there any periodic evaluations of the performance of either the Executive Board or the Managing Director.
The consultations are summarized in a report submitted to the IMF earlier this month. Civil society groups will discuss the report with IMF Managing Director Dominique Strauss-Kahn at the IMF-World Bank annual meetings in October. For a copy of the report or more information about the consultation process, see www.thefourthpillar.ning.com.
New Rules for Global Finance is a network of nongovernmental organizations that seeks to promote stable global financial systems which reduce global poverty and inequality by advocating technically sound approaches to be undertaken by global financial institutions, by advancing reforms of the governance and practices of these institutions, and by organizing non-governmental organizations, policy-makers and advocates to achieve these ends.
Click here to download the full report in English, French and Spanish.