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Presentation to the Joint Oireachtas Development Cooperation
Sub Committee
From Debt and Development Coalition Ireland
28 April 2005 at 12 a.m.
on
Accountability to the Oireachtas and the Public on Ireland's Participation
n the IMF and World Bank
1. Introduction
The government has produced an annual report on Ireland's Participation
in the IMF and the World Bank since l999. The Report comes under the Bretton
Woods agreements (Amendment) Act 1999 (section 10). Among the issues set
out in the legislation to be covered by the Report are:
(a) particulars of payments made under the Bretton Woods Agreements Acts
1957 - 1999
(b) particulars of any policy positions taken by Ireland at the Bank and
Fund
The Report is the main form of formal accountability from the government to the Oireachtas and to the wider public on how Ireland operates within the IMF and World Bank.
The fifth Report was published at the end of March 2005. We welcome the fact that these reports are produced annually and believe it is important to ask the question: how well is this mechanism operating as an accountability tool?
2. Fifth Annual Report on Ireland's Participation in the IMF and World Bank
The Report, which covers 2004, gives an outline of the financial relationship between Ireland and the IMF and World Bank. It also provides a useful outline of the process whereby Ireland works within these bodies. It explains the role of the Irish representatives in Washington who operate within the Canadian led constituencies at the IMF and World Bank. Particularly welcome is the information on the stronger linking between the Irish Embassies in DCI programme countries and Ireland's input to the IMF and World Bank at Washington level. According to the Report, 'this coordinated approach is a very effective mechanism for providing much weightier inputs on issues of mutual concern to World Bank Executive Board discussions'[1]. No information, however, is given within the Report to illustrate how this operates in relation to debates taking during 2004 e.g.:
the new debt sustainability framework : this is a new approach to financing for low income countries produced by the IMF and World Bank. It involves setting indicators for debt sustainability which will indicate what mix of concessional loans and grants is suitable for different countries, taking into account the likelihood the country can service any loans taken on. An aim is to ensure countries have the finance they need to meet the MDGs without running up unpayable debt. However, the approach does not directly factor financing for the MDGs into the analysis of debt sustainability. In terms of Ireland's position on the new approach, the Report states that Ireland's input on debt sustainability was informed by Embassies in DCI programme countries. No details are given, however, on the actual position taken by Ireland.
A further significant issue was the role of the IMF in low income countries.
The organisation is engaged in a review which will end in September 2005
with a policy position on the role of the IMF in low-income countries.
The review has been underway since early 2004 and a number of important
elements have already been discussed by the Board of Governors, including
conditions attached to loan agreements. There are widespread concerns
about the role currently played by the IMF in relation to achieving the
MDGs. Speaking at UCD recently, Professor Jeffrey Sachs, adviser on the
MDGs to Mr. Kofi Annan stated that the IMF is placing ceilings on health
spending in low income countries rather than highlighting to the international
community the financing needs of poor countries to meet the MDGs. According
to Professor Sachs: 'In the vast number of country programmes supported
by IMF since the adoption of the Goals, there has been almost no discussion
on whether plans are consistent with achieving them'[2].
No information is given by the Report on the specific positions taken
by Ireland on the role of the IMF in low income countries.
When we have raised with the government the need to make Irish policy at the IMF and World Bank public, we have been referred to the short speech given by the Minister for Finance at the annual meetings of these bodies. The policy statements in these speeches tend to be very general e.g. 'Additional financing will be required to allow for debt sustainability and create the stable conditions needed for growth.'[3] Obviously in a short speech, it is difficult to address issues in depth and certainly not the range of issues covered by the institutions. This is why an annual Report is needed which spells out positions taken on key issues.
Recommendations
We believe that the Annual Report does not adequately fulfil the requirements
of the legislation to 'give particulars of any policy positions taken
by Ireland at the Bank and Fund'. We would make the following recommendations:
- The government's annual report should contain a summary of the positions
taken by Ireland on key issues dealt with at the IMF and World Bank,
with respect to both policy (e.g.: debt policy, role of IMF in low income
countries) and with respect to Ireland's programme countries.[4]
- The Minister for Finance should make public what Ireland's priorities
are at the IMF and World Bank. This should include specific priorities
for the Spring and Autumn meetings of these bodies.
- There should be an opportunity for members of the Oireachtas to question the Minister for Finance following the publication of the annual report. This Sub Committee should consider inviting the Minister for Finance to discuss the annual report.
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[1] Dept. of Finance 'Ireland's Participation in the IMF and
World Bank' Annual Report 2004 pg 12
[2] 'Millennium Project 'Investing in Development: A Practical Plan to
Achieve the Millennium Development Goals' (Overview Report) 2005 New York
page 36
[3] Statement by Ireland at the Joint Annual Discussions 2004, Appendix
1 of Annual Report 2004
[4] For example, the stance that Ireland took with respect to Zambia reaching
completion point under HIPC a few weeks ago. Other programme countries
are: Ethiopia, Lesotho, Mozambique, Tanzania, Uganda.
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