Guyana: Experience of Economic Reform under World Bank and IMF Direction (PDF)

Driving Under the Influence: Senegal's PRSP Process (PDF)

Tight control by the World Bank and IMF resulted in ineffective economic reform and poverty reduction programs, according to two new studies from the Social Justice Committee and Halifax Initiative Coalition, Canada. Control of the policy process by these institutions tended to stir resentment in the societies the programs were supposed to help, because of low level of country ownership and civil society participation in program design and implementation.

The studies of economic policy in Senegal and Guyana, two heavily indebted poor countries, identified that problems with economic reform and poverty reduction programs in those countries were due mainly to: - excessive control by the World Bank and IMF of the direction, scope and timing of economic reform and poverty reduction programs, - the low level of actual country 'ownership' of economic policies and poverty reduction strategies, and - lack of processes of empowerment and capacity-building of affected citizens.

The papers point to the need for greater country autonomy in charting development paths and for greater civil society involvement in the process. In particular, the papers highlight the continuing lack of full disclosure of relevant information and the informed consent by people affected.

The Guyana study, by Derek MacCuish, describes the relationship between the financial institutions and the government to be one of tension and mutual distrust, with policy decisions taken in a context of conditions attached by the financial institutions to debt relief and financial aid, rather than one of mutual respect, shared perspective, and agreement on objectives. The reform process has tended to be technocratic and directed by the financial institutions at the expense of national ownership and the strengthening of civil society capacity. This contributes to a reluctance to involve and empower civil society organizations, which remain isolated from decision-making processes and without effective avenues of engagement.

This isolation weakens key programs like the Poverty Reduction Strategy, and depriving it of legitimacy in the eyes of civil society. Reforms in major economic sectors were launched without adequate social impact assessment or public accountability, while reductions in government spending sought by the financial institutions were pursued at the expense of policies of social stability and job creation. The study of Senegal?s Poverty Reduction Strategy process, by Wendy Philips, indicates that it suffered from a lack of government capacity, and a highly protracted and limited participatory process that fell short of being country owned or country driven. The Senegalese government responded primarily to the demands of the financial institutions, resulting in a process that conformed to the macro-economic prescriptions of the institutions at the expense of local social priorities and democratic participation. The Senegal study concludes that progress toward poverty reduction and national control over development would be strengthened through increased support to local governments and civil society organizations to build capacity to carry out and engage in poverty reduction policy initiatives.

For info, contact Derek MacCuish at the Social Justice Committee - sjc@web.ca