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IMF Civil Society Newsletter

Islamic Republic of Iran and the IMF

Iraq and the IMF

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Republic of Yemen and the IMF

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The IMF and Good Governance -- A Factsheet

The IMF And Civil Society Organizations -- A Factsheet

The IMF and the Millennium Development Goals -- A Factsheet

The IMF's Poverty Reduction and Growth Facility (PRGF) -- A Factsheet

Poverty Reduction Strategy Papers -- A Factsheet

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Transcript of a Townhall Meeting with CSOs
Dubai International Convention Centre
Abu Dhabi Meeting Room
September 21, 2003
5:40 p.m.

MR. BARGHOUTHI: All right. Let me please welcome everybody to this Town Hall Meeting. My name is Mustafa Barghouthi. I am the President of Palestinian Medical Relief, and I am from Palestine. I did some work with the NGO Working Group with the World Bank before.

And I think we're going to have, today, a very exciting session and very interesting one. I would like to thank and welcome the participation of our four major participants today:

Minister Trevor Manuel, the Chairman of the Development Committee and Minister of Finance from South Africa; Chancellor Gordon Brown, Chairman of the International Monetary and Financial Committee; and Chancellor of Exchequer from United Kingdom; President of the World Bank, Mr. James Wolfensohn; and Mr. Horst Kohler, Managing Director of the International Monetary Fund.

We thank them a lot for giving us this time and opportunity to have this dialogue with the participants from civil society worldwide. As I understood, this is probably the greatest participation up till now of civil society in the Annual Meeting of the World Bank and International Monetary Fund, and this is probably the first time that civil society participants from MENA region participate.

So to us, this is an important and very serious achievement that we hope will expand and grow bigger. There is no doubt that when we talk about nontraditional and creative governance in many countries, and necessity of adoption of more democratic and participatory values at the level of each country, that it is also applicable at the global level, too, and that's why we believe that the participation of civil society and NGOs have a lot of importance, and we do believe that the participants today will have a lot to offer and a lot to contribute.

Since many of them are here from about 30 countries, as I understand, 90 representatives, and many of them are in very close contacts with the grass roots, with the people who are so much affected by poverty, especially in developing countries, the people who are the main beneficiaries or the main people who would be affected by different policies, so there are a wide range of issues that will be probably mentioned and raised today.

In our discussions, issues like wider participation and transparency was mentioned. The question of accreditation and access to such a meeting. The question of political problems and how they affect development in many regions of the world. The question of debt relief. The issue of what happened with World Trade Organization and the conference in Cancun. And the environmental and human rights issues. There are several issues that I'm sure many of the civil society people will raise today.

But let us start, if you agree, with a short introduction that will be given by each of the four major participants. We are suggesting because of the limitation of the time that each speaker will speak for two to three minutes and then after that we will be left with about an hour for what we hope will become a very interesting debate.

So if you agree with that, I would welcome first Mr. Minister Trevor Manuel to make the first contribution. Please.

MR. MANUEL: Thank you very much, Dr. Barghouthi. Good afternoon to all of you. I knew that we were waiting on Ann Pettifor to arrive. Now that she's here we can start. We have a program in South Africa which we call the NVESO (ph) program, and it's essentially we go into remote parts of the country as government led by the president often, and we sit and listen and then respond to the issues that people raise, and so, Dr. Barghouthi, I don't want to use any more time than this. I did say I want to listen and be afforded an opportunity towards the end of the hour to be able to articulate in response to issues that the community based organizations are raising. Thanks.

MR. BARGHOUTHI: Thank you very much. Mr. Jim Wolfensohn.

MR. WOLFENSOHN: Well, thank you very much, Dr. Barghouthi. I share the same instinct of my friend Trevor Manuel. I think you've all heard me talk before about what we're trying to do in the Bank and what I think we are achieving. In fact, I can tell that we're getting somewhere because I get a few smiles when I come into the room now. I'm not suggesting everybody smiles at me, but I do get a number, so I am delighted to be here with all of you and particularly delighted that there are members of civil society organizations from the region, so many of them and many that I've not met. So I look forward to hearing the observations and to responding afterwards.

MR. BARGHOUTHI: Thank you very much. Mr. Brown.

MR. BROWN: Well, let me first of all thank all of you for what you do in every continent of the world because I believe that what's been achieved in recent years, whether it be the steps forward that have been taken in debt relief or the achievement of the Millennium Development Goals as a statement, as a resolution on behalf of the world community has been achieved not by politicians or ministers in committees. It has been achieved by popular pressure which has been led by civil society, which has been led by many of your organizations. I do believe that you're not just a sounding board or an interest group; you are the conscience of the world and you're the driving force for what we have to do to tackle the problems of globalization.

I also believe that the message from Cancun to all of us is that globalization must be for everyone and not just for some, that we must replace what is a vicious circle of debt, poverty and economic underdevelopment by a virtuous circle of debt relief, poverty reduction and economic development and social inclusion, and I believe the challenge for us as politicians today at the IMF meetings, tomorrow at the World Bank meetings, but way beyond that is that the Millennium Development Goals and the Monterrey Agreement of 2001 were promises that have to be met. In other words, we made a promise that if there was reform, if there were removal of corruption, if there was transparency in the developing countries and emerging market countries, that if these things were done, we would honor our promise to provide the funds that were needed to tackle poverty, to tackle ill health, to tackle the problems of education, and it's a promise that I want to see us redeem.

And that's why in the few seconds I've got left I want to draw your attention not just to the pressure that we are putting for debt relief to be fully honored, and also the pressure we put today that the trade talks be resumed and the issue of agriculture be dealt with by the richest countries, but also that we look at new mechanisms for financing the development aid that will be at least a doubling of the monies that are now put on the table by the richest countries, and that's why I want to draw your attention to the international finance facility that we have proposed, that is gaining some support, which is the means by which the international community can be by frontloading aid, by offering sustained and continuous monies right through to 2015 make the necessary financial contribution leveraging in private finance, so that we can meet the Millennium Development Goals. And I will not only be pleased to answer any questions on the proposals that we're putting forward, but hope that around the world, there can be a movement that realizes that this is a new compact between rich and poor countries, this is not the world divided as it was at Cancun, but a world that can be united by our determination both to meet the Millennium Development Goals and to finance them properly, so that we can genuinely say by 2015 that we have halved poverty, that every child had the chance of schooling, that we had caught infant and maternal mortality in the way that we had promised, on the road to creating a fairer and more just world in which we all can bring up our children.

MR. BARGHOUTHI: Thank you very much. Mr. Kohler, please.

MR. KOHLER: At this IMFC meeting, we dedicated the full afternoon to discuss the role of the Fund in low income countries and as you know, the IMFC has 24 chairs representing 184 members, and there was no member representative of the Chair who didn't express appreciation for the role of the Fund and its work. And I want in this kind of initial statement to inform you about another incident in today's discussions in the afternoon.

Of course, we talked about Doha, and we all agreed that it's a huge disappointment that the talks broke down in Cancun. I said we should take it as a wake-up call for all participants that they have again to review their negotiating position and come back as soon as possible to the negotiating table in order to find a compromise, and this was accepted.

And then one of the Governors said it is really remarkable, in Cancun the talks broke down, but it was not the IMF who was the culprit.

(Laughter.)

MR. KOHLER: And I stated this as a historical moment.

MR. BARGHOUTHI: Thank you so much, and you made my job much easier. I want to thank you for that, but I think we have here many representatives of civil society. So we'll give the chance to different people. You can raise your hand and ask to speak. I would, though, since we have a lot of people, and we cannot allow each person more than one question, so I would like you to restrict to that, and in principle, we hope that each speaker will not speak for more than two minutes.

This session is on record, so the press can record what we are doing, but the press will not be allowed to ask questions because they have other opportunities and we want to restrict this to representatives of civil society. So I thank you all. I can see already many hands, and, please, I give you the floor. Please, could you please mention your name, your organization, and the country you're from, please?

QUESTION: My name is Paul Ladd. I work at Christian Aid in the UK. I'd like to thank you for your time for coming. I think it's very useful for us. I'd also like to thank you for your support of the MDGs and the extra initiatives that you're trying to pursue on financing. But my question today is about the issue of voice and representation of poor countries and the governance structures of the Bank and Fund. So my question is to Trevor Manuel. What has been achieved, do you think, in these past days or at these meetings to improve the voice and representation of poor countries? Has that been enough in your opinion and in the next two years, how can we keep this issue alive so we can achieve more to make the roles of the Bank and Fund more effective?

MR. BARGHOUTHI: Thank you. We will take two at a time.

QUESTION: Yes. My name is Omar Trabulsi from Lebanon. We have met as a small group of CSOs in the region and we have discussed a little bit areas of common interest and I want to first--so I am speaking on behalf of a number of organizations.

I want to start by saying that we are pleased to be here to have this opportunity to be present, to bring in the perspective of the CSOs, also to engage in a dialogue with the World Bank and IMF on issues of common interest. Also, we look forward for a long-term partnership and dialogue and this meeting, this forum, does provide for the beginning of that process.

We have a couple of questions that have to do with this process. One is about accreditation to this meeting. We would like to know more, because probably it is not clear for most of us, how we are here and what was the process, and also how can we make that process more transparent, more inclusive for organizations that have not been able to be here? That is one of the questions.

MR. BARGHOUTHI: Ahmad, I like to have one question from each participant, if you don't mind. Thank you.

QUESTION: Okay.

MR. BARGHOUTHI: Respond to the first question.

MR. MANUEL: Yes. Thank you very much for your question. The issue of voice and representation is, in fact--will probably take up 50 percent of the agenda tomorrow at the Development Committee and I'd like to believe an issue that will continue to dominate our discussions over the next two years at least.

I think we meet in an environment where the events of Cancun cast a very long shadow over the meeting because it talks directly to certain deficits that are obtained in the multilateral arrangement. On the issue of voice, in the construct of the Bank and Fund going back 59 years is in fact something that talks to--the voice issue talks to the very deep deficit.

As Africans, we have two constituencies, two Chairs at the table of 24, one Chair representing 21 countries and the other 23 countries. In an environment where some Chairs are occupied by single country constituencies, where none of those single country constituencies have programs, clearly you have an enormous problem.

But it's in the construct where the voice is a manifestation of the size of the economy, and for some developing countries, and I'd single out India and Brazil, the faster the economies have grown, the smaller the shareholding has become. So I don't believe that it's an issue we will resolve yet in Dubai.

But I'd like to believe that with the broad assistance and the conscience of the NGO community, we must continue to focus on this because we cannot have institutions as important to development, institutions as focused as what the Bank and Fund are, and perhaps ought to be even more so in respect of development, we can't have such institutions that are poorly representative of those who are the beneficiaries of programs.

And so it is a big agenda item and I think that all four of us at the table here, in some ways, Gordon and I representing the Governors, and Horst and Jim representing the institutions, would be in agreement that we need to do a lot more work to improve on voice. But have we done enough? Clearly, we haven't. We need to do a lot more in partnership.

MR. BARGHOUTHI: What about the participation question. Who would like--

MR. KOHLER: I would like, if you don't mind, to add something to this in order to possibly make it even a bit more lively. Voice. First, there is a culture in the IMF to try to come to decisions, and decisions about concrete projects or policy, in consensus.

This consensus-building culture has strengthened over time. The G-11, that is the emerging-market, developing countries' Chairs, are more and more self-confident to be very assertive in this consensus-building process. And in a way, I think it works. Most decisions by the IMF are taken in consensus. That's the first remark I want to say, to add to what Trevor Manuel said.

But then I have a second argument. The IMF is supposed to create more international financial stability, and in terms of crisis, the IMF needs money for this. You have to ask, where should the money come from? And you need to have providers of money, capital providers.

We had today a discussion triggered by representatives of smaller countries who contribute to what we call a reserve tank for the financing capacity of the IMF; that is, the General Agreements to Borrow. These representatives asked the Managing Director, are we really sure that the money we provide you is well used, because we have to testify to our Parliaments that it is used according to the rules and to the contract when they provided the money.

So if someone wants to say the IMF is one country, one vote, then you may have to realize, that there is no money. There is a financial institution where the people, or the countries, who are the creditors --I think with some rights and even obligation to their taxpayers -- request that there are rules where they can be assured that the money is not lost or not, say, used in a way that they feel it is not according to the rules.

Therefore, I just say this, that this voice discussion should not get without--should still be in touch with realism. I mean even the interest of the poor countries or the interest to preserve international financial stability. We need financing capacity and we need countries who provide this capacity. Within this cooperative culture of the IMF, its 24 Chairs, even--and this is remarkable--the representatives of the developing world stick to the vision that the money should be used in a revolving character. It should come back, so that there is an expectation that it is paid back; a loan.

MR. BARGHOUTHI: Would you like to add, respond--

MR. WOLFENSOHN: Let me add something on the--we could go on long about voice and representation in relation to the role that management can play as distinct from the shareholder role. We have taken considerable steps since this came up to try and build the capacity of the offices. I think that's something that we can do and which we're continuing to do.

But on the question of accreditation, I just take you back that the appearance of the NGOs at annual meetings for open discussion is a relatively recent experience. When we started, seven or eight years ago, to try and invite what turned out subsequently to be as many as 400 representatives who would come to meetings, we were instructed by the Board that any NGO or member of civil society could apply but that the National Directors needed to approve the invitation. That is true of business people. It's true of every visitor that comes, needs to be cleared by the National Representative.

Now I think that from what I heard of some stories this time, that it's probably time now to try and take another look at this with our Board, because I understand that there were some difficulties, some very late approvals and some appearance that maybe it wasn't as open or transparent as it should have been.

So I am prepared, having heard what's gone on here, to raise this--first of all, to review it and to hear from you, if you would, any instances that you have, and then take it up with the Board to see if we can get a more progressive set of rules and regulations.

I'm sorry that there were some problems this time but our Executive Directors feel, as I think you know, that they represent the countries and that they are the people who have the control over the invitations. They're not singling out just civil society. They feel that about everybody. But if there have been difficulties on this occasion, as I understand there have, I'd be glad to take it up and see what I can do.

MR. BARGHOUTHI: Thank you very much. That's a very good response.

We'll take three questions now and I will try to take from all around the table. So I will give you the floor, please. Yes?

QUESTION: Thank you. My name is Ana Quiros Viquez. I come from Nicaragua. We have some worries relating to (PRSPs) and PRGFs. One of the so-called improvements of (PRGFs) is that they are, in relation to ESAF, is that they will be determined by the PRSPs. But so far what we had seen is the opposite, that PRSPs have been limited by PRGFs. Especially we had seen this in the case of Nicaragua, and our officials are saying that PRSPs' performance is being limited by PRGF constraints.

We heard something similar this morning from the Ministers of Rwanda, Ethiopia and Bolivia and they stressed that the debt relief was not being an issue as important as they thought they should be in this meeting. When I asked yesterday in the session of the low-income--the role of IMF in the low-income countries about this, the answer was that PRGF was looking into the daily basis economy and the PRSP was the long-term perspective.

But I'm torn by this. I mean, we cannot do something on the daily basis that will go against our long-term goals. So what is really happening with PRGF and how PRGFs are supporting or going against PRSPs that we have been seeing in the past, or recently?

The other thing is, PRSPs are supposed to be country-owned and country-driven. But we had seen so many different--so many similarities over the different countries that have PRSPs that we see more a blueprint than something that is country-owned. And not so much on a live document because we had not seen changes over the at least two years that have been in Nicaragua, and we would like to see, or ask, what are you doing as the World Bank responsible for the PRSPs to make this really an alive document and a country-owned document?

MR. BARGHOUTHI: Thank you.

I might please ask the participants to, as much as they can, limit the time of their use because we want to give a big opportunity for many people who want to participate. Also I would like to ask our honorable participants to also try to make their answers as short as possible. And also please try not to use too many acronyms, if you can.

Riad?

QUESTION: Thank you. My name is Riad Malki and I come from Palestine. I wonder how the World Bank and the IMF adjust their operations in conflicting areas, as a person who comes from the Arab world where we have two conflicting areas. Iraq is a post-conflict area while Palestine is still a conflict area.

So I wonder how the work, the planning and the implementation is being really done. Obviously, working with occupying powers in Iraq is different than working with the occupying power in Palestine because the American forces are cooperating while Israeli forces, I don't think that they are cooperating in the same way.

At the same time, knowing that your own people are being--are not really allowed to operate freely in West Bank and Gaza, that your own projects are being destroyed and also that the local implementing agencies are not moving freely from one place to another within West Bank and Gaza.

So, of course, that really puts the following questions. One, how do you reconcile with such limitations? Do you operate through contingency planning? And to what level development being really sacrificed, you know, with emergency aid?

MR. BARGHOUTHI: Thank you. We'll take a third question, too.

QUESTION: Thank you. My name is Fletcher Tembo. I come from Malawi, but I work for World Vision International from the United Kingdom.

My question is particular to the President of the World Bank concerning human rights. What would the President say concerning developing countries that have signed up to conventions or rights--for instance, the convention of the rights of a child--but are having difficulties to accomplish those conventions? What would be the position of the Bank?

World Vision had written a report on this and filed it through the Bank and would want to see whether there is any advancement on this agenda.

MR. BARGHOUTHI: Thank you. Maybe we can get some responses now.

MR. WOLFENSOHN: Let me try the last one. I thought the report was excellent. We are a major advocate in relation to human rights aspects, particularly in relation to children.

But I think you came up with a very good idea in this report, which is where there is already a signature on the part of the country, and there's an agreement that they will adhere to human rights needs, that we should perhaps consider holding them to account in our own programs. And I have already written back to your organization saying I think the report is very good, and we will take a look at it in the specifics of your report.

On Mr. Malki's comment, we try and use our influence every way we can. I have spent eight years going in and out of the territories, and I also went to Iraq just before my colleagues were killed, and unfortunately we suffer pretty much along with you guys. I just got someone out of jail in Iraq. A Bank staffer was killed and three people injured (in the bombing). So we are making sacrifices, and we're not pulling out.

I think any fair observer in Palestine would say that we have done a rather good job over the last eight years. Certainly, that is the impression I get from all levels of your leadership. But we don't have the authority over either the American forces or the Israeli forces to force them to do things that they don't want to do.

Behind the scenes, we intervene consistently, in terms of trying to get better conditions for the people of both the territories and of Iraq, but we have no standing to be able to deal directly on political matters. Although I can assure you, when you ask the question, how do we use our influence, to the extent that we have influence, we are using it all of the time. And I am actually very proud of the teams that we have in Gaza, and West Bank, and in Iraq.

We are continuing our work in Iraq, and as soon as there is a program, we will be back there. So I think that is a question on which we have pride, rather than anything else.

And on the PRSP, the performance varies by country. We have reviewed recently every one of the countries, including with people on the ground, and I will look into the question of Nicaragua. I am unaware of any limitation put on by PRGF on PRSP, but if it does exist, I'll be more than happy to take it up with you.

In some countries, the participation of civil society is extraordinarily good; in other countries, it's less good, and it varies, depending on the government and depending on civil society itself. But the one thing I think that you have to give us some credit for is that we did invent the PRSP in order to open the participatory process, and it didn't exist six years ago and now it exists, and we're convincing many more governments to have participation.

Now, we're getting criticized because it's not quick enough and not as complete enough, and I am perfectly happy to sustain that. Ann Pettifor did the same to me on debt relief. And so I was a hero for two days, and now we're getting criticized.

(Laughter.)

MR. WOLFENSOHN: But I expect that, and we are taking up every individual case.

MR. BARGHOUTHI: Thank you.

MR. BROWN: Can I say that the biggest meeting we've had, in terms of time over the last days since the IMF, and the G-7, and others started to meet, was in relation to Palestine and the Palestinian Authority. And we had a 1 ½ hour discussion with Mr. Fayyad about resources for the Palestinian Authority about the appalling situation where poverty has risen above 50 percent and what we can actually do about it and not just to discuss short-term measures, but to discuss a long-term plan.

And in return for the transparency that he was promising in the budget statements, we would, as a group of Ministers and countries, take seriously both the short-term disasters that have befallen the area, but also work on a long-term plan together with them.

So I can assure you that our efforts are directed to forming, if you like, an economic part to a road map to peace in the Middle East, and that we need the economic and social dimension very clearly stated so that we can make progress. And with greater prosperity and an attack on poverty, we could help the peace process as well.

On Nicaragua, I know that what you are referring to is the fear that some people have, that having, in theory, abolished the structural adjustment policies of the past, that there is a contradiction between what is asked by some institutions and what is then asked by others.

But I think the importance of the Poverty Reduction Strategy Papers was it would be country owned, it would be community owned, and the resources would be there for countries to take action against poverty. And that's why today at our meeting, you'll be interested to know, that we agreed that there will be a review of the process, and obviously the issues that you raised can be dealt with.

There is also, I repeat, a question of funding. Because whichever we look, whether it is the funding of the World Bank and IMF programs, whether it's the Fast Track Initiative on Education, whether it's the debt relief that you and other countries require, whether it's the Global Health Fund or whether it's the financing of the Millennium Development Goals, there is absolutely no doubt that there is a funding shortfall, and that's why we must address ourselves to that, as well; otherwise we will not be able to meet (the goals) either for water or for health or for education or simply for poverty reduction the objectives that we've set. And that's why, to some extent, your question also comes back, not just to the processes of the IMF and the World Bank, which I think everybody agrees we've got to be careful to show we're working in the right direction and the intention is there, but equally back to issues of funding, which I raised at the beginning.

MR. KOHLER: Let me, Mr. Chairman, add to the Nicaragua question.

We are, in the IMF, in the process of aligning better the PRGF to the PRSP. Therefore, we look forward to any comment also from your side how we can do this. Our current activities are that we are looking more to what are sources of growth, how is the PRGF financing or program support aligned better with the budgetary process in the countries and such kind of matters.

But I also should inform you that our Independent Evaluation Office--and its head, Mr. Ahluwalia, is here--has a new project to examine the PRGF-PRSP process, and they will do it studying Tanzania, Guinea, Mozambique, Tajikistan, Nicaragua, and Vietnam. So they work on that, and they will consult with civil society, and I assume, Mr. Ahluwalia, the report is scheduled for next year, early next year.

But I would also like to put, say, a piece of information. The PRGF is, by its nature, at least up to now, short-term financing, a three years' financing facility.

The PRSP is certainly, and must be, a long-term concept. And here, maybe not every detail, it is absolutely harmonious how it fits together, but we are in the process of looking into this.

But I also would like to associate myself with Gordon Brown. We need more financing for development. PRGF financing is a loan. It's a concessional loan. Wherever I go, and whatever I see, we need more grant money for development, not just loans. That doesn't mean that I do not think that PRGF can be helpful, but we need more grant money.

And I am an advocate, seriously, that the advanced countries have to deliver more to this famous 0.7 percent of GNP target of official development aid and this shold be in terms of grant money.

We are, by the way, also supporting Gordon Brown in his suggestion of an international financial facility, but I, in turn, because of transparency and even honesty, I insist on this 0.7 objective. Why? Because the 0.7 objective is what parliaments in advanced countries approve every year in the context of their budget laws.

And you, if you want so--it's, of course, simplified--can use the concrete number of official development aid in these budgets as an expression of concrete solidarity. And the average of this solidarity over the advanced countries, OECD countries, is 0.25 percent, I think--so around the number of Germany. Some countries are at 0.7; many, unfortunately, are well below it.

The Monterrey Conference has made a step forward. This is very fortunate, and we should appreciate that but it's not enough. So my point is the IMF has not the right, not the ability to print money. Whatever we do is we can give loans, we can give concessional loans. That is the PRGF. But to be more effective in this development effort, we need more in absolute terms, of grant money, and we need also to look into the efficiency, the good use of this money, because--I give you another example.

It took me almost two years to collect the funding for Technical Assistance Centers in Africa because we had the idea that in Africa, in particular, we need to support them more with capacity building, technical assistance, how to run tax administration and all of this. It took me almost two years to get this money. It's around $20 million for three years--two years. And then we decided, two regional technical assistance centers in Tanzania and one in Cote d'Ivoire.

I went to Cote d'Ivoire and made a nice talk with the President, and two weeks after this nice talk with the President, the civil war broke out. So the plan was over.

MR. BARGHOUTHI: Thank you, sir.

I will take now four questions.

(Laughter.)

MR. BARGHOUTHI: And I see many hands, so please forgive me. I have to try to be balanced. I'll take the lady, please.

QUESTION: My name is Fauzia Saeed. I'm from Pakistan, a country that has been played around with like a football by international players, and used and abused many times as they will. The specific comment I want to make also specifically about Pakistan is that the government, the last and this government, initiated a process of decentralization, and I think because the civil society organizations have been demanding that for several years, they are really with the government on this agenda, and it has been successful to a certain extent, but the point about the World Bank I want to make is that the World Bank has been undermining that again and again, and I want to take this opportunity to point out. I know it is very difficult to say something like that because the Bank can always retreat and say, you know, we are just a Bank and all the bad things are because of your government and the good things are because of us.

(Laughter.)

QUESTION: But I want to say that the Bank should not really play into the politics of what is happening within the government. It should respect the law and not the desires fueled by the bureaucrats, especially the very ministries that deal with the Bank, and should respect the direction which the main government is going towards. So this point should be noted.

QUESTION: Thank you. I just want to pick up from what Mr. Brown was stating, that reduction of corruption and transparency--

MR. BARGHOUTHI: Tell us who you are, please.

QUESTION: Oh, sorry. Rola Dashti from Kuwait Economic Society. I'm from Kuwait. I just want to pick up, as I said, what Mr. Brown stated, that reduction of corruption and transparency by developing nations is a precondition for developed nations to meet their obligations of MDGs. Accordingly, I want to ask to what extent the World Bank and IMF can allocate some funds annually to assist CSOs in developing nations to build their capacity so that to become active agents of change to reach these preconditions?

Second thing I would like to ask, being a citizen of this region, does the World Bank have a policy to aid in confronting the challenges that have been raised by the gender report for MENA region, or would they stop only by issuing this report? Thank you.

MR. BARGHOUTHI: Thank you.

QUESTION: Nasam Qahoush, ICFTU, International Confederation of Free Trade Unions, Lebanon office. We thank you for giving us this opportunity really to meet with the panelists and we appreciate what the World Bank states in the report, better governance in MENA region, in which the World Bank indicated that restrictions in civil society organizations and human rights are among the obstacles to improve growth in the region. My question to Mr. Wolfensohn, please, since most countries in the region don't observe CLS, core labor standards, including freedom of association, what does the Bank plan to do to promote the CLS including freedom of association? Thank you so much.

MR. BARGHOUTHI: Yes, please, you.

QUESTION: My name is Ann Pettifor from Jubilee Research and the New Economics Foundation. I want to take up a point made by Mr. Kohler which is on the question of the representation of the developing countries, and we've produced a report this year called the Real World Economic Outlook, which is a counter report for the IMF's World Economic Outlook. Just by the way, the bad news is that it sold out in the week it was published; the good news is that the World Bank has it on its table, and it can be ordered from them.

But in that report, we echo what is said in the IMF's World Economic Outlook and also in (the World Bank's) Global Development Finance, which is that poor countries are now net lenders to rich countries, that the flows, the transfers are not North-South, that they are South to North. This is not reflected in the structure of the Fund. It is reflected in the structure of the international financial system, and the bias in that system towards rich countries, and particularly the United States.

In light of those transfers, should not the Fund review its structures and review the voice of developing countries in the institution? Thank you.

MR. BARGHOUTHI: Thank you. I'm still hopeful we will have another round of questions, so I would really ask the participants to try to speak as short as possible so that we can have another round. I see so many hands and this is a very lively discussion.

MR. MANUEL: Let me start by responding to Ann Pettifor's question. I don't think it's for the Bank and Fund. I think that we as the shareholders, we as countries represented there, must actually take these decisions, and I agree with you entirely. Africa has about 50 percent of its savings invested largely in the G-7 countries, and we are an underdeveloped region, and, you know, we have to be able to respond to that. If you start with a level of development to have voice, then clearly the most underdeveloped regions are going to remain poorly represented.

We have to rethink this issue and that's why I said to Paul, the issue is important, and it cannot be resolved here right now, but we have the shadow of Cancun which will help us rethink this issue.

You know there was one other issue I wanted to pick up on. Nezam, on the core labor standards, again, I don't know that you can ask the World Bank to do that. Within the UN system, it's the place of the ILO. Democracy must require government to take up these issues. I represent a country that has adopted all of the core labor standards, but it's not an issue for the World Bank. We can't ask the World Bank to take decisions or to govern countries.

If you ask that of the Bank and Fund, we will undermine democracy and we'll undermine the voice of people, and we must avoid that. That is my plea to the ICFTU. Thank you.

MR. WOLFENSOHN: Just quickly on Pakistan, I don't know that Pakistan's been played around with any worse by people outside Pakistan than by the Pakistanis themselves who seem to have done a pretty good job.

(Laughter.)

MR. WOLFENSOHN: And in relation to decentralization, it's something which we're promoting, not resisting. So I don't know what the particular issue is, but I'd be glad to take it up with you, but if you read our publications, it's very clear that we believe in decentralization as an act of faith.

On capacity buildings of CSOs, we have tried quite hard to get money from the board for grants to civil society. We have made some progress. It is a sort of confrontation which is very deep because, as Trevor Manuel said, government leaders think that they represent society and that the money should go back to them. Having said that, we've been able with the support of our board to have programs to develop civil society leadership through the World Bank Institute. We have developed a number of grant programs, and quietly that development is increasing.

On gender policy and on the role of governance, we came out with these four reports. I think it was useful to come out with these reports (on the MENA region). It was not wholly received with enthusiasm by some in the region, but they're out there, and I think that the thing that we can do within our framework is to get the issues being discussed, and you'll see that more and more discussion is taking place, but with gender and with governance, as Trevor said, on these issues, it is the people in the country that have to sort it out.

What we can do is to give a focus on it and give ammunition and make sure that the subjects are discussed, but I have to say that that is the role of civil society, not the role of the Bank. We're your partner, you know, but we can't govern countries.

MR. BARGHOUTHI: Thank you. Mr. Brown, do you want to respond?

MR. BROWN: Just very briefly, on the questions, first of all, on development funding, we try to give more to civil society organizations to build capacity and will do more. On transparency, I agree with what Rola says, that this must be a huge effort on the part of the international community to have far greater transparency in everything.

On the question of voice, for developing countries in particular, this was again discussed today. We are looking at this over the next year, and there will be a big debate on this, but I do think the principle that should guide our actions is not who happens to be richer or poorer at one particular time. It's not because either the North is lending more to the South or the South is lending more to the North. It's a basic right that people's voice should be heard, and I hope that that can underlie the way that we move forward, just as Cancun has raised the question through the WTO of, if you like, one country, one vote. All these issues are being raised, and we've got to look at them in the context of what's right, not who happens to be rich at any particular time.

And on the ILO, and the right to be a member of a trade union, in our own country, in 1997, we had to legislate that there be a right to be a member of a trade union after anti-union legislation in previous years, and I certainly think all these pressures through the International Labor Organization should continue and they certainly have our support.

MR. KOHLER: To Ann Pettifor I can just say we are in the process of concentrating even more on the analysis of capital flows, and then your point will come up.

MR. BARGHOUTHI: Thank you, sir. Okay. We have here, I'll start by taking one more. Please.

QUESTION: Thank you, Dr. Barghouthi.

MR. BARGHOUTHI: Can you mention your name, please?

QUESTION: My name is Rima Sabban and I'm from United Arab Emirates. I want to take it where Mr. Wolfensohn left it, for civil society in this region to work, and actually I want to speak on behalf of civil society in the Gulf region, in particular, where we really have a very peculiar situation: we are civil society and we are in rich countries. So we are overlooked by international sponsorship because we belong to rich society, and in these rich societies to get sponsorship, you always have to go to the ruling elites to get the sponsorship.

This means you're really going to address their issues more than your issues. So we are in a catch that we're not really gloomy and glowy. And here I want to really talk on behalf of women in this region. And I want to address the issue of women in politics and political representation, where in the world today, where all women in the world have gained the political participation, there are a couple or handful of countries and most of them are only Gulf countries that did not give women this right.

And today I feel really proud of the government of Dubai, of its ability of organizing such an impressive meeting, all the capabilities and their ability to overcome all the conflict that is around this meeting, and they did it and they were really successful at doing it, but, you know, and they're addressing women issues, especially in terms of education and in terms of helping women going in the work, but why when it comes to women representation in politics, this issue is not well addressed?

When we talked to World Bank representatives before this meeting that came here to the region, they were saying, you know, we cannot help much because you belong to countries that do not borrow from our organization, so there isn't much we can do for you. So what do you think, Mr. Wolfensohn?

QUESTION: Peter Basshard, with International Rivers Network, originally from Switzerland.

When it comes to the environment and development, there is today a general acknowledgement for the value of multistakeholder processes, and the most exciting such process that we've been involved in was the World Commission on Dams that was initiated by the World Bank and NGOs, chaired by a colleague of Trevor Manuel, Kader Asmal.

Now, the recommendations are being adapted to the national context in South Africa and some other countries, but NGOs feel that the World Bank has been too reluctant so far to work with the recommendations of the WCD. But now, there has been this announcement that the World Bank will reengage in so-called high-risk, high-reward projects, including large dams. And my question is how, in the absence of strengthened guidelines like those of the World Commission on Dams, can we trust that the negative experiences of earlier high-risk projects will not be repeated?

MR. BARGHOUTHI: Thank you. Please?

QUESTION: Thank you. My name is Belinda Calaguas, and I'm with Water Aid, though I am originally from the Philippines.

First of all, we welcome the key message in the World Development Report 2004, which was launched today, on Making Services Work for the Poor, that there is no one size that fits all in terms of developing services, public services. And we also welcome the remark by Nick Stern during the launch of the report that we should be cautious about private sector participation in water services.

My question is how is this rethinking in the Bank at the Washington office going to influence what it does on the ground through its loan programs for the water sector, many of which, at the moment, have PSP, private sector participation, as a goal of the reform process itself in water services, which we think narrows down the options for water sector reform?

Additionally, there is a movement amongst a group of stakeholders, including Thames Water, the Public Services International Trade Union Federation, et cetera, to review private sector participation experiences in water reform programs, and I would like to ask whether the World Bank would consider supporting this multistakeholder review.

MR. BARGHOUTHI: Thank you. Please.

QUESTION: Thank you for inviting us, and thank you for reviewing--

MR. BARGHOUTHI: Mention your name, please, and your country.

QUESTION: My name is Baquer Namazi. I'm from an NGO from Iran. I want to thank you for inviting us here, and I want to thank you for reconsidering the review process, because if you are seeking government permission to invite us, you are contradicting your own policy of independence of NGOs.

My question is, and I am happy that the World Bank is putting together a development package for Iraq, for the Iraqi people. There are also Iraqi people who have been forced out of Iraq. Half a million of them are in Iran. Does the World Bank have any program for those who have been pushed out of Iraq? Thank you.

MR. BARGHOUTHI: I will take one last contribution for this round, please. Mention your name and--

QUESTION: Basma Al-Qubati from Yemen. I will return to the speech of His Excellency about he said for the other speaker about the NGO, they should take responsibility; the NGOs should play roles in the society. It needs two things for that. First, we have to have a strategy, like a water strategy; a gender strategy in the society to build this NGO in the society. And the second one, especially for my country, we have to have debt forgiveness for my country, because now, we have to defend against terrorism in my country, and this will be a load for the budget for my country. And the money will go to defend against terrorism and then to go to support NGOs and development in my country. Thank you very much.

MR. BARGHOUTHI: I want to give one last contribution, please, one of you. You decide.

QUESTION: Thank you very much. My name is Odur Ong'wen from Kenya, and I just wanted to ask a question related to Cancun and mainly to Chancellor Brown, but I think the Bank and the Fund can also address it.

While the reasons for the failure of the Cancun talks were many--I happen to have been an official delegate there--I want to address one specific issue which I think is important for us here, and that is the issue of technical assistance. Every ministerial--whenever developing countries raise issues, particularly on new commitments, there has always been a promise that there would be technical assistance. And this was the same with the Singapore issues.

However, these turn out to having developing countries accept post-dated checks which eventually end up bouncing. And Chancellor Brown, your country, on its own and as part of the EU, was part of the Doha decision, which said that for these new issues to be negotiated, there would be technical assistance so that these countries could do impact assessment of undertaking these new issues.

And also, in the spirit of coherence, there was an understanding that the Bank and the Fund would be involved so that we could have a single basket for technical assistance for developing countries to be able to assess the impact of negotiating these new issues. But from Doha up to Cancun, very little happened in terms of this technical assistance. If there was any, it was about understanding these issues, not assessing the impact. So I would like to know what, now, with the failure of Cancun would developed countries do in terms of helping developing countries understand these issues, and what would be the role of the Bank and the Fund? Thank you.

MR. BARGHOUTHI: Thank you; thank you, sir.

Mr. Brown, would you like to start?

MR. BROWN: I'll deal with this trade issue and say what I think the way forward is. The voice of the developing countries was rightly expressed at Cancun. The fact that an agreement wasn't reached does not mean an agreement can never be reached. And I think the investment and competition issues arising from Singapore should now be taken off the table, and I think there would be general agreement that that is what is necessary. And I think on agriculture, there is a way forward, but it does require the richest countries to recognize both the cost of subsidies to themselves but the cost of subsidizing agriculture to the developing countries. And I believe that there is a way forward here. We should be pressing for that to be the basis on which there is a resumption of the talks, and I also believe that the voice that has been expressed by the developing countries is a voice that we have got to hear, not just in the WTO, but here in the IMF and the World Bank meetings as well.

We announced, as a UK Government, technical assistance in Cancun of $50 million. Horst Kohler has announced today that the IMF will provide assistance to countries for a transitional impact where there are trade reforms. So I think we can deal with that issue as well, but it will require all of us to go further and particularly the richer countries to go further than we did at Cancun, and I agree with those who say that it is possible if we do that for things to move forward.

But the bargain between developed and developing countries--let me just emphasize--means that we must also do more on health, on education and antipoverty programs, and we must make good the Monterrey commitment, which was if people made the reforms that they had agreed to, then, we would provide the money. And at some point, I will be happy to come back to a meeting like this or a bigger meeting. Depending on how many hundreds are invited to it, I'm very happy to come back and explain how I believe we can bridge that financing gap by working together to do so.

MR. BARGHOUTHI: Horst Kohler, do you want to say something?

MR. KOHLER: Chancellor Brown has already mentioned that I have offered to the IMFC that the IMF takes an initiative for financing temporary negative impact of trade liberalization in order to facilitate the talks. I think this is important.

Second, the IMF, together with the World Bank, is offering technical assistance in the framework of our integrated framework. And I, myself, was together with Jim Wolfensohn at the WTO this spring, where we explained our position and urged the developing countries themselves to sit down to develop a negotiating strategy to define what they need also from their perspective.

And I think a lot has happened. And I am sure more will happen, so that I am not pessimistic that the developing countries' voice will not be heard. Because within the IMF, within the World Bank, we are your advocates. That is clear. We are advocates that your voice is heard in these trade negotiations, and whatever we can do to enable you even better to make you be heard, we will do so.

MR. BARGHOUTHI: Thank you, sir.

Mr. Wolfensohn?

MR. WOLFENSOHN: A number of quick answers: on women in the Middle East, this is an issue we have been addressing along with the issue of education of girls for the last--since I have been at the Bank, anyway. We have to make progress quietly. But it is very purposeful. At every one of our meetings, as you probably know, we have women representatives from the Middle East. We have quite a lot going on in capacity-building. We have set up a network in relation to education of girls. We are working with professional women's associations.

What we can't do is to come out and change your laws or change your culture. But we can provide things like the gender report which can attract attention and allow movement to take place inside the country. That is just the limitation on us. If we were citizens of your countries, we would be able to do better. And in relation to the countries that we don't lend to, the fact is that we don't have a lot of leverage. But your government here has been very open in terms of allowing us to put out these publications, so I am quite hopeful.

On water, which are the next two questions, we start with the suggestion that's been confirmed in the Camdessus Report that water and power are central to the future of the planet. And the reason that we've come back into it, even though we don't like getting beaten up in high-risk projects, is because someone has to deal with the question of clean water and irrigation and the limitations on water. And I think we are likely to do it better than most people.

And we got the World Commission on Dams because we wanted to set a framework for our work. If you see, if you read it as I did, and if you spoke to Kemal, you will know that it is not a prescription for every project. It is not said that that is it. But in terms of the spirit of the Commission on Dams, we commit to it, and that is what we are going to do. We did not go through all of the problem just to ignore it. But it does vary country-by-country.

And on the water service in the private sector, if there is a review body doing it, we would be very happy to participate. And if Thames Water and others are doing it, I should make one point to you that two years ago, there were a lot of private water companies that wanted to get into things, and now, there are hardly any. So it's not really a current issue.

And on Iran and Iraq, we are not doing anything for the Iraqi expatriates in Iran. We are trying very hard to build a program of social services in Iran with some difficulties from our shareholders. But the fact is that we're moving ahead anyway on the social areas, and if there was a special concern about the half a million Iraqis that are there, I think we would be prepared to take a look at it. So long as it's within the social sector, I think we're okay to move and would be glad to take a look at it if you would like to deal with it.

On Yemen, the gender issue and the debt forgiveness issue, we have a big office, as you know, in Yemen. We are trying very hard to work with you and to reach out to civil society. It has not been a natural instinct of your government, but I do think we are making some progress.

MR. BARGHOUTHI: Thank you.

Mr. Trevor Manuel, please?

MR. MANUEL: Thank you, Doctor.

I think one of the issues that we need to focus on is the capability of states. Even developing states, we have to focus on the capability so that the correct choices are made. I think that if we look at the issue of water, for instance, what you find is that government needs to provide a series of services and sometimes make the wrong choices about bringing the private sector into some services that are better-placed in local government, for instance.

But because we deal with things by partitioning them, we take the wrong decisions. And I think governments need to be more responsive, and we need to look at development overall to avoid these kinds of errors. And I think the same issues apply when we are dealing with issues like trade negotiations. Our ability to talk to each other as people from the same region and so on I think would also assist in getting along the Singapore issues, et cetera.

We tend to place dependence--and this is the plea I am making to all of us--we tend to place dependence on the multilateral institutions to resolve issues that are actually sovereign issues. The World Bank and the IMF have a place, but their place is not to resolve issues that are actually in the context of the way in which services are delivered. The more we ask that of them, the less capable they are, the more we will fail, the more we will blame the Bretton Woods institutions, but it starts from misunderstanding what their role is.

And so, what we ask of them, I think, largely would depend on what we can deliver on, and sometimes, there are going to be constraints. And I empathize fully with the issues of gender underrepresentation. I don't understand it. I live in a country where at least 30 percent of our members of parliament are women, and I think that our country has been enriched by that fact. And so, you know, I am a campaigner for stronger representation of women everywhere. But I don't know that the World Bank or IMF, apart from drawing attention to the issue, should actually be asked to do it for us.

Thank you very much.

MR. BARGHOUTHI: Thank you. I want to--unfortunately, I hope I didn't upset many people, because there are so many of you who want to talk. But I will take the invitation of Mr. Brown, and I hope everybody would agree. Maybe we can arrange for another meeting and with even wider participation of civil society representatives. Sometime, we can discuss that with different representatives. But I think that would be a great idea, to have such a debate. And that would give better opportunity, because I think this was a very wonderful and extremely useful exchange, which I think both sides need a lot.

I want to remind everybody that there is going to be a transcript posted on the Internet and released today or tomorrow, so you can look at it if you like, and you can use it. I want to thank Minister Trevor Manuel. I want to thank Chancellor Gordon Brown. I want to thank Mr. Wolfensohn, who is a dear friend. And I want to thank Mr. Kohler for this wonderful participation, for your contribution. And I want to thank all representatives of civil society from all continents. I think most continents had the chance to be represented today.

So thank you all, and I hope we will have another session of discussion like that. Thanks a lot.

(Applause.)

MR. MANUEL: I want to thank Dr. Barghouthi for having facilitated this discussion.

(Applause.)

(Whereupon, at 6:50 p.m., the meeting was concluded.)




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