2009/06/23

World Bank, IMF Heads Skip Summit on Global Crisis

Inter Press Service (IPS)

When a major international conference on financing for development took place in the Qatari capital of Doha last November, the heads of both the World Bank and the International Monetary Fund (IMF) skipped the meeting.

"It's a shame," responded a livid Miguel D'Escoto Brockmann, president of the 192-member General Assembly.

"The two Bretton Woods institutions are controlled by a member of the United Nations, who is anti-United Nations," D'Escoto complained at the time, implicitly referring to the United States, which has a political stranglehold on the world's two key international financial institutions.

And as the United Nations readies for a three-day global summit on the financial crisis Jun. 24-26, history will monotonously repeat itself.

Both World Bank President Robert Zoellick and IMF Managing Director Dominique Strauss-Kahn will be staying home "boycotting" two consecutive international conferences on the global economy.

The United Nations has been told they are unable to attend the summit because of other commitments, although both are expected to send deputies.

"This is really regrettable," Roberto Bissio, executive director of the Third World Institute and coordinator of Social Watch, a network of civil society organisations in over 20 countries, told IPS.

He said that when Strauss-Kahn announced his decision not to go to the Doha summit last year, many non-governmental organisations (NGOS) wrote to him saying that "this sent the wrong signal about the seriousness with which the IMF takes the challenges that we face, and how it perceives its role as a partner in solidarity with the international community of nations and organizations".

"It would certainly undermine the IMF's claims to leadership in global financial crisis response efforts," Bissio noted.

He was also critical of the fact that virtually all of the political leaders of Western nations, including the United States, Britain, France and Germany, are skipping the U.N. summit beginning Wednesday.

Asked for his comments, D'Escoto told IPS that both the World Bank and IMF heads were formally invited for the summit.

"Obviously, according to their priorities, other things were more important. But that does not surprise me - or surprise anyone," D'Escoto added.

Dean Baker, co-director of the Washington-based Centre for Economic Policy and Research (CEPR), is not surprised either.

"The IMF and the World Bank remain too much under the control of the United States to act as realistic bodies to set economic policy with the interests of the developing countries in mind," he said.

On the other hand, the United Nations has been structured to make it inconsequential in world affairs, he added.

"The most realistic prospect for developing countries to gain a serious voice is through regional blocs, like Mercosur in Latin America," Baker told IPS.

"That may be a long road, but it is difficult to see any other path," he added.

Asked about the summit, Social Watch's Bissio said the countries of the world will be meeting at the highest level to discuss the financial crisis and its impact on development.

This, he said, is taking place at the unanimous request of last year's Doha meeting on financing for development.

"I am surprised that both the leaders of the IMF and of the World Bank are not attending," Bissio commented.

He said the participants in the summit are also basically the same countries that are members of the Bretton Woods institutions, whose reforms are one of the key subjects on the agenda.

This situation is apparently paradoxical, yet there seems to be a coincidence between this downgrading of the presence of the Bretton Woods Institutions at the U.N. and the low level of representation announced by the G7 countries, the seven economies that have an overwhelming majority of the shares and the votes in the IMF and the World Bank, Bissio pointed out.

The seven major economies include the United States, Britain, France, Germany, Italy, Canada and Japan.

This may produce some short term political gain, slowing down the push for reform of the Bretton Woods institutions by developing countries, Bissio said.

"But by refusing to engage in a meaningful transparent debate (at the U.N.) they claim to serve, those two institutions are undermining their credibility," he noted.

Asked whether the U.N. summit will provide at least some answers to the global financial crisis, Baker of the Centre for Economic and Policy Research said: "I don't anticipate anything much to come from the summit."

He said it will be primarily a series of photo-ops where everyone commits themselves abstractly to positive steps, but nothing concrete is likely to get done.

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