Platform Summary

1994 marked the 50th anniversary of the founding of the World Bank and the International Monetary Fund (IMF), institutions which have been promoting and financing inequitable and unsustainable development overseas that create poverty while destroying the environment. These organizations are also profoundly undemocratic in that they have consistently denied citizens information about, and involvement in, major decisions affecting their respective societies.

For more than a decade, citizens' groups in the United States, in collaboration with partner organizations in the Third World and Eastern Europe, have lobbied the IMF and the World Bank, as well as the U.S. government, for reforms in the operations and policies of these institutions. Despite these efforts and the growing chorus of criticism from the U.S. Congress, governments and U.N. agencies, the IMF and World Bank continue to resist fundamental and meaningful change.

To mark the 50th anniversary of the Bretton Woods conference at which these institutions were founded, a diverse group of U.S. organizations established the 50 Years Is Enough Campaign. (Now the 50 Years Is Enough: U.S. Network for Global Economic Justice). "50 Years Is Enough" was chosen as the slogan to express the strongly held belief by growing numbers of people around the globe that the type of development that the World Bank and IMF promote could not be allowed to continue.

Above all, the Network calls for the full participation of affected women and men in all aspects of World Bank and IMF projects, policies and programs. This requires far-reaching changes in the lending policies, internal processes and structure of the World Bank and the IMF. Only when these reforms are implemented will these institutions be able to play a positive role in support of equitable and sustainable development. This will require the following:

1. Openness and full public accountability of the Bretton Woods institutions and the systematic integration of affected women and men in the formulation, implementation, monitoring and evaluation of World Bank and IMF projects and policies;

2. A major reorientation of World Bank- and IMF-financed economic-policy reforms to promote more equitable development based upon the perspectives, analysis and development priorities of women and men affected by those policies;

3. An end to environmentally destructive lending and support for more self-reliant, resource-conserving development;

4. The scaling back of the financing, operations, role and, hence, power of the World Bank and the IMF and the rechanneling of financial resources thereby made available into a variety of development assistance alternatives; and

5. A reduction in multilateral debt to free up additional capital for sustainable development.

1) Institutional reform to make openness, full public accountability and the participation of affected populations in decision-making standard procedure at the World Bank and the IMF.

While modest steps have been taken toward greater openness at the World Bank, they have been inadequate to allow for meaningful participation of affected populations and have had no positive effect on project quality. Even when consultative mechanisms are called for by current World Bank procedure, this requirement is often sidestepped by staff. For example, acting against the requirements for Environmental Assessments, the World Bank regularly fails to consult with affected communities and continues to lend for environmentally destructive projects. Likewise, the secretive process through which structural adjustment programs are designed and implemented continues to undermine democratic participation and the local relevance and effectiveness of the reforms themselves.

Despite a World Bank policy that states there is a presumption in favor of disclosure of information, in practice the Bank has restricted almost every type of information regarding its projects and policy-based lending. The World Bank's new information policy, rather than requiring the public availability of project and program planning documents, has established a system of new information documents for each project that could potentially obscure important facts and analysis.

The 50 Years Is Enough Network therefore calls for:

• Full openness and systematic consultation by the World Bank and IMF with local populations potentially affected by the policy reforms, programs and projects they support.

  To be relevant to the needs of local populations, adjustment programs must be designed locally by all relevant sectoral ministries with the active participation of a broad range of representatives from civil society. The IMF should be further required to consult social and environmental experts at every stage of program development to ensure that adjustment policies do not increase hardship on the poor or destruction of the environment.

  At the World Bank, more time must be allocated early in the project cycle to allow for sufficient local consultations so that affected people can participate in project development. To ensure that women as development actors are fully represented in this process, and to address the historical exclusion of women from decision- making structures at local, national and international levels, specific mechanisms need to be established for their full inclusion.

• Full disclosure of information at the World Bank and IMF.

  Citizens must have full access to all Bank and IMF documentation required to make informed and effective input into the program-development process. This calls for the revision of the institutions' respective information policies to ensure the release of key internal papers, including project and program documents, from the early stages of the planning process.

• Legal and structural changes at the IMF to permit an increase in its openness and accountability.

  The IMF's Articles of Agreement must be adjusted to allow greater participation of government ministries and civil society in program design. At the same time, an independent evaluation unit must be established at the IMF to review, on a country-by-country basis, the impact of the implementation of IMF-required or -recommended policy prescriptions on poverty, economic development and the natural environment.

2) A shift in the nature of economic-policy reform programs and policies to support equitable, sustainable and participatory development.

Economic "stabilization" and "structural adjustment" programs imposed on client countries and their citizens by the IMF and World Bank have failed to lead to sustained and equitable growth or, in most cases, to increased productive investment. Instead, they have increased external debt and caused great social, economic and environmental destruction while further impoverishing poor and working people.

As wages and the poor's access to resources have decreased and women, in particular, continue to be excluded from decision-making concerning macroeconomic policy, they--and the children they support--have been further marginalized and impoverished. The widening gap between the rich and poor accelerated by adjustment policies represents one of the greatest sources of instability in the world today. The World Bank's so-called "poverty lending" and social-investment programs do not address the widespread and structural problems of poverty and inequality exacerbated by adjustment programs.

The 50 Years Is Enough Network therefore calls for:

• A halt to World Bank and IMF structural adjustment programs as currently constituted so as to limit further damage to poor and working people and the environment.

  Non-project, policy-reform lending should be more limited and must no longer be conditioned on the adoption of policies designed in Washington without the benefit of informed local input. Adjustment programs must, in fact, derive from and support the perspectives and priorities of local populations. Debt relief, which also should not be conditioned on the adoption of such programs, should replace non-project lending as the principal means of providing countries with desperately needed foreign exchange.

• The reorientation of World Bank and IMF lending for economic-policy reform to support development that is equitable and sustainable and that addresses the root causes of poverty.

  To be effective in achieving these objectives, lending for economic reform and for parallel project investments must serve to: a) strengthen a wide variety of productive activities of the rural and urban poor; b) increase rather than diminish local self-reliance, broad-based local demand, and worker's rights and wages; c) promote broad-based sustainable food production by increasing access to land, credit and other productive resources for small farmers and microenterprises; d) directly address women's lack of access to resources and decision-making structures and promote equity in the development process for all disadvantaged groups; e) ensure environmental sustainability by decreasing the rate of natural-resource extraction, increasing regulatory oversight and promoting end-use efficiency in the energy and water sectors; and f) allow for increased investment in much needed physical and social infrastructure, especially in health care, education and economic opportunities for women and girls.

3) An end to all environmentally destructive lending and support for more self-reliant, resource-conserving development that preserves biodiversity.

The World Bank and the IMF have been oblivious to local conditions and the longer-term implications of their lending for the global environment, local ecosystems and natural-resource bases, as well as for local social structures. More than half of the Bank's $24 billion annual lending is directed to projects and programs in the environmentally sensitive areas of energy, agriculture, forestry and transport, and the institution's record in these areas has been characterized by needless environmental destruction and social disintegration. Billions of dollars have been lent in support of projects that have turned forests into wastelands, generated energy in a highly inefficient and polluting manner, and displaced peasants from subsistence plots given over to cash-crop export production. These projects have also forced the resettlement of millions of poor men, women and children, who now face a diminished standard of living. Furthermore, the World Bank's environmental lending often serves to perpetuate the externalization of environmental costs.

The 50 Years Is Enough Network therefore calls for:

• The reorientation of all World Bank and the IMF lending to ensure consistency with the agreements reached at the 1992 United Nations Earth Summit.

  All structural adjustment programs and relevant World Bank-supported projects must take into account and promote the objectives of Agenda 21 and the Biodiversity and Climate Conventions and should be evaluated for consistency with the funding policies and program priorities established under those conventions. In addition, the World Bank and IMF must incorporate into their planning and decision-making processes the value of natural resources and ecosystems to be depleted and/or degraded by their policy prescriptions and, in the case of the Bank, project-lending portfolio.

• An immediate moratorium on the preparation of any World Bank-supported project involving forced resettlement in countries that do not have in place policies and legal frameworks that will lead to income restoration for those who will be resettled.

  No project involving involuntary resettlement should be considered until there is hard evidence that alternatives have been examined, rehabilitation measures have been created in consultation with local communities, and monitoring systems are in place that will ensure full compliance with World Bank guidelines.

  Specific measures must be taken which will hold World Bank staff accountable for violations of the Bank's involuntary resettlement policy. In addition, the Bank should comprehensively provide mitigation and restitution to those people forcibly resettled by 146 projects that it has financed and that are already underway. It is also critical that the Bank, in cooperation with borrower governments, prepare economic rehabilitation programs for all the populations displaced by projects it has funded since 1980 in violation of its policy guidelines.

• A moratorium on World Bank funding for the construction of large dams.

  This moratorium should stay in effect until a comprehensive review is carried out of the impact and performance of past lending for such dams, a mechanism is established to ensure that the findings are applied to future loan considerations, and all conditions applying to the lifting of the moratorium on projects involving forced resettlement are met. Furthermore, individual projects must not be financed until a comprehensive river basin management plan is in place that addresses appropriate alternatives and that is developed and implemented with local populations.

• Substantial shifts in World Bank lending towards alternative, cost-effective, resource-conserving energy, water-supply, transportation and sanitation projects.

  Water projects must support conservation, demand management, improved efficiency in irrigation, the re-use of treated wastewater, the transfer of "clean" technologies to developing countries, and the extension of basic supply and sanitation coverage to unserved populations. Similarly, energy lending must support least-cost investments in end-use efficiency and conservation.

• A shift in World Bank lending away from agricultural export production and operations which directly or indirectly accelerate forest destruction.

  Agricultural lending must be fundamentally redirected away from the current industrial agriculture model. Rather, it should increasingly support smallholder food production that builds on local knowledge and resources while increasing local household and food security, local self-reliance and biophysical, social and economic sustainability.

  The World Bank should extend its commitment not to finance logging in primary moist tropical forests to all primary forests, including temperate and boreal forests, and should not finance activities which indirectly support logging. The Bank must take a proactive approach to avoid adverse effects on forests stemming from infrastructure and other development projects and the promotion of policies that accelerate forest exploitation.

4) The scaling back of the financing, operations, role and, hence, power of the World Bank and the IMF and the rechanneling of financial resources thereby made available into a variety of development assistance alternatives.

Both institutions have failed dismally in the management of programs whose ultimate goal is the improvement of human well-being around the globe. The World Bank's loan portfolio has seen only marginal improvement, and two programs that it either fully or largely manages and that it finances with taxpayers' money -- the International Development Association (IDA) and the Global Environment Facility (GEF) -- have been ineffective in achieving their mandated purposes. Previous capital increases have strengthened the World Bank's capacity and inclination to overfund ineffective implementing institutions and to finance large-scale destructive projects and programs void of local input and control.

Capital and quota increases have also strengthened the power of the IMF and the International Bank for Reconstruction and Development (IBRD - the World Bank's hard-loan window) to leverage economic-policy changes against the will of local populations, undermining more equitable, sustainable and democratic development. The IMF continues to focus on narrow policy measures aimed at correcting short-term balance-of-payments problems without regard for the long-term impact of such measures, demonstrating a total disregard for the people and environment of borrower countries.

The 50 Years Is Enough Network therefore calls for:

• The denial of future capital requests for the IBRD and the IMF's Enhanced Structural Adjustment Facility (ESAF).

  This is the first step in downsizing the two institutions and limiting the damage that they do. With less money available in smaller loan packages by the World Bank, countries will be more inclined to look inward for solutions to their respective development problems, relying more on local efforts, resources, skills, knowledge, creativity and commitment. At the same time, ESAF -- which was established to expand access by low-income countries to concessional IMF resources to support "especially vigorous adjustment programs" -- has been underutilized, as its lending terms are not attractive to the poorest countries and it has promoted unproductive economic-reform programs.

• A narrowing of the policy-making roles of the World Bank and the IMF.

  Given the IMF's disregard for the social and environmental impact of its operations, other institutions in the North, in conjunction with government ministries and representatives of civil society in client countries, should determine appropriate programs of economic reform that take longer-term goals into account. The IMF's role should be restricted to providing technical assistance on fiscal and monetary policies and mobilizing capital and debt relief required to support the achievement of these programs. The World Bank's role in leveraging economic-policy reforms must also be limited, with its non-project lending reduced to 10 per cent of its total loan portfolio, consistent with its original mandate.

• The establishment of an independent IDA, legally, operationally and financially separated from the World Bank.

  IDA suffers from all the problems of the IBRD, but, because it receives taxpayers' money from member governments, it need not be under World Bank management to garner funds to lend to its borrowers, the world's poorest countries. It should continue as a concessional financing mechanism with a more democratic governing board which has a better balance between developed and developing countries, as well as representation from various constituencies affected by the institution's lending. The new IDA should incorporate an effective, full-disclosure information policy, an ombudsoffice and an effective appeals mechanism. It could also operate a second soft-loan or grant program, available to all World Bank borrower countries, that would fund projects directly benefitting the poor and requiring subsidized credit.

• The establishment of a Global Environment Facility that is legally, operationally and financially independent of the World Bank.

  An official evaluation of the GEF pilot phase has found the Facility to be ineffective in dealing with climate change, biodiversity, international waters and ozone depletion, largely because of its top-down, non-participatory approach and its failure to adopt a valid strategy for using its funds to maximum advantage. A majority of GEF projects are attached to regular World Bank loans which often are at odds with the goals of the GEF. On paper, the restructured GEF establishes a functionally independent Secretariat. This must be put into practice. Other essential reforms which the new GEF Council must institute are full public access to information on GEF and associated projects, guaranteed participation of citizens' groups and affected communities during the project cycle and in the Council, and agreement on a strategy for effectively using GEF funds to protect the global environment. Unless these reforms are agreed to and fully implemented, the GEF should not be allowed to fund new projects and government contributions should be conditioned on the reforms being carried out.

5) A reduction in multilateral debt to free up additional capital for sustainable development.

The international debt crisis has now dragged on for a dozen years. The debt burden of developing countries now stands at US$1.7 trillion, of which US$278 billion, or roughly 17 per cent, is owed to the World Bank and the IMF. The poorest countries, mostly in sub-Saharan Africa, are simply not able to meet their debt payments, while in many economically better-off nations development has been stymied while interest payments are made. Although the IMF and the World Bank have large liquid reserves, they refuse to reduce or reschedule the debt owed them, taking no responsibility either for projects that have failed or for stabilization and adjustment programs that have led to severe economic recession and an exacerbation of national debt burdens.

The 50 Years Is Enough Network therefore calls for:

• The immediate cancellation of 100 per cent of the outstanding debt owed the IBRD and IMF by the Severely Indebted Low-Income Countries and 50 per cent of that owed by Severely Indebted Lower-Middle Income Countries.

  The World Bank and IMF should use their respective liquid and gold reserves (US$17 billion and US$35 billion, respectively) to write off this debt without applying structural adjustment conditionality.

• The write-off of World Bank loans made for projects and programs that have failed in economic terms, particularly those which have had severe adverse impacts on local populations and the environment.

  The World Bank has acknowledged a considerable number of current projects in its portfolio as failures. The loans already disbursed for these projects should therefore be scrutinized by an international tribunal chosen by the Bank's Board of Executive Directors to determine just measures of debt cancellation and relative responsibility on the part of the Bank and borrowers. This tribunal should also establish criteria for determining failures among completed projects, as well as appropriate measures of debt cancellation. Such a policy shift would go a long way toward introducing greater accountability in the World Bank and improve the quality of lending.

• An international agreement to ensure that future borrowing by governments from the IMF and World Bank is based on the informed consent of its citizens to accept and repay the debt.

  An international convention should establish standards for future debt obligations to be legitimate and enforceable under international law. The convention could require: publication of basic details of the loan agreement; availability of documents for public review for 60 days before signing; publicized, open hearings to solicit citizen input; approval by the legislative body responsible for appropriations; public signing of loan agreements by the responsible officials; and the use of the loan for agreed purposes. The IMF and the World Bank would be obligated to ensure that these standards are met, and a loan obligation found by the relevant court of law to be out of compliance with the standards would be considered unenforceable.

The 50 Years Is Enough Network is dedicated to increasing the awareness of the U.S. public, the media and policymakers of the pressing need for far-reaching change at the Bretton Woods institutions. As the Network platform incorporates essential reforms that the World Bank and IMF so far have refused to consider, it aims at the same time to limit the power of these institutions and to promote a public exploration of new structures that could deliver more relevant and appropriate assistance.

As a first step in that process, the Network's immediate objective is a denial of the Administration's funding request for the IBRD and for ESAF and a moratorium on future contributions, while, in the longer term, removing IDA and the GEF from World Bank management. The Network will support the immediate reallocation of foreign aid funds toward a greater diversity of official, non-governmental and private assistance institutions with a better record in promoting equitable and sustainable development.