Global Policy Forum

By Webster Malido

African countries have expressed their disappointment at the lack of progress in democratising the World Bank and the International Monetary Fund (IMF).

In a statement to the International Monetary and Financial Committee (IMFC) of the IMF Board of Governors, Angolan finance minister Jose Pedro de Morais said it was Africa's strong view that a serious process to reform the governance structures in both institutions needed to be developed to better reflect the global reality of the 21st century rather than the middle of the 20th century.

Speaking on behalf of 22 Sub-Saharan African countries, including Zambia, Angolan De Morais said the whole process of reforming the two institutions appeared to have lost momentum. "We would like to express our disappointment for the lack of progress in respect of governance issues in the Bretton Woods Institutions to reflect the calls made at various fora, including the Monterrey Summit on Financing for Development, the Development Committee and also at the last IMFC meeting," he said.

De Morais said while African countries appreciated the capacity enhancing decisions taken so far by the Executive Boards to address the heavy workload of the offices of the largest multi-country constituency of both institutions, they were reiterating their position that potential measures taken to address issues that are administrative in nature should not overshadow the need to address more fundamental issues. He said the most fundamental issues were those related to increasing the basic votes and providing additional chairs for sub-Saharan African countries.

De Morais said this could only materialise with the required determination and political will of all the governors of the two institutions. "It is our firm belief that the effectiveness of the sub-Saharan countries' participation in the decision-making process in the BWIs can only be enhanced through additional representation in the board of directors," he said. "We do also think that a decision in this regard does not need to be kept hostage to the conclusion of the current general quota review."

De Morais noted that the twelfth general review of quotas was concluded early this year without any increase in the IMF's financial resources and more importantly to a re-distribution of quotas. "We truly hope that the Thirteenth General Review of Quotas reconsider the quota formula as well as increase the basic votes," he said. "We remain concerned by the fact that as many as 44 countries of Sub-Saharan Africa are represented by only two chairs on the Fund's Executive Boards. In addition, the quota share and voting rights of Africa continue to decline, which further undermines the voice and effective participation of sub-Saharan countries in the two institutions.

And De Morais said African countries welcomed the progress made so far in alleviating the debt burden of Highly Indebted Poor Countries (HIPCs) that has allowed countries to enjoy increased social spending. However, De Morais said the only concern was with the pace of implementation of the HIPC Initiative which he said remains extremely slow. He noted that of the 38 countries that had reached decision point, only eight countries had so far reached completion point after the Initiative was established four years ago. "Indeed, inherent problems in the design of the programs have not facilitated its implementation and this is why we believe that a more flexible approach should be followed, when considering the challenges faced by countries in reaching the completion point," he said.

On governance and debt relief, De Morais said they were of the view that debt relief should not be unduly delayed solely because of concerns on governance. He said although good governance was critical to development, it was important to note that there were judgmental issues involved in measuring governance. He said even with the best of commitments from country authorities, strengthening institutional capacity to enforce good governance always took time. "We know that perceptions do not change dramatically, just as corruption and other vices could not be eliminated overnight," De Morais stated. "Besides, governance is a global problem affecting both the public and private sectors in developing and developed countries alike."

In addition, De Morais said it has been recognised that corruption in developing countries is often fueled by firms in developed countries. We urge, therefore, for a more flexible approach to the issue of governance, particularly when it appears to constitute a cog in the wheel of progress towards reaching the completion point, he said. De Morais said African countries welcomed the increasing number of creditors that were committing themselves to deliver debt relief on HIPC terms.

He said progress in the implementation of Poverty Reduction Strategy Papers, as well as social and structural completion point triggers, appeared to be impressive. He said it was clear that government ownership of the poverty reduction strategy was strengthening. However, De Morais said a number of studies seemed to suggest that absolute poverty, in some regions like in sub-Saharan Africa was actually increasing despite all such efforts. He said because of that, a better analysis of the sources of growth as well as of the factors that constrain growth was necessary to carry out. "In addition, we are of the view that there is need to synchronise PRSPs implementation, with the UN Millennium Development Goals, which points to the urgent need to accelerate the harmonisation of the areas of PRGFs and PRSPs," said De Morais.

FAIR USE NOTICE: This page contains copyrighted material the use of which has not been specifically authorized by the copyright owner. Global Policy Forum distributes this material without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. We believe this constitutes a fair use of any such copyrighted material as provided for in 17 U.S.C § 107. If you wish to use copyrighted material from this site for purposes of your own that go beyond fair use, you must obtain permission from the copyright owner.