ONE Reacts: World Bank & IMF Meetings
Washington, DC (Friday, October 14th) Anti-poverty group The ONE Campaign criticized the lack of action from the G20 Finance Ministers and World Bank and IMF Annual meetings. The meetings made clear that the economic forecast looks disastrous, yet there was no major action to keep the most vulnerable economies from falling off the brink. This lack of action raises serious questions about the current architecture’s ability to respond adequately to today’s challenges, adding pressure to an already fractious G20 leaders’ meeting in a few weeks’ time.
Elise Legault, Canada Director at ONE, noted: “Despite these frustrations, the silver lining was an increase in Canada’s commitment to share more Special Drawing Rights with countries that need them more than us. We hope this will be followed by more efforts to share SDRs and unlock new development investments.”
Sara Harcourt, Senior Policy Director for Development Finance at ONE, said: “Global finance chiefs rightly identified the scale of the global economic crisis hammering low- and middle-income countries. But they only took modest steps in response to a crisis that demands bold and ambitious rather than incremental change.
“At a time of unprecedented economic pressures, the inert response to the global challenges ahead of us is frightening. The world is burning while leaders are dragging their feet and can’t decide if they should turn on the sprinklers or not.
“The G20 need to pick up the slack urgently and make real headway on their commitments at the Leaders’ summit next month. Above all, if we are going to have any hope of addressing the current crisis – and this scale of challenge in the future – we urgently need to modernize the institutions at the heart of that effort.”
So far, the Annual Meetings have delivered a mixed bag:
- The Resilience and Sustainability Trusts’ has become operational. Australia, Canada, China, Germany, Japan, and Spain are the first-round contributors, totaling SDR 15.3 billion (~$20 billion). To date, three countries (Barbados, Costa Rica and Rwanda) have reached staff-level agreements, which are awaiting Board approval, for RST support for climate action.
- There has been some indication that the next steps for CAF (Capital Adequacy Frameworks) reform plan will be unveiled by the G20 and, positively, the US government is pushing for a plan by December. This plan needs to be delivered and translate into urgent action to deliver the 100s of billions needed.
- The lack of progress on Zambia’s restructuring and Chad no longer being eligible for official debt relief due to rising oil prices is sorely disappointing.
Harcourt continued: “In particular, we need to see a clear roadmap on how the recommendations of the G20’s expert panel will be implemented for MDBs, how the $100bn in channeled SDRs will be achieved, and how the Common Framework is going to be made more effective. These have got to be at the top of the agenda when the G20 Leaders meet in November.”