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TITLE: Urgent Sign-on Letter: World Bank Structural Adjustment Lending |
AUTHOR: |
DATE: February 22, 2001 |
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PLEASE PASS ON THIS SIGN-ON LETTER TO YOUR NETWORKS IMMEDIATELY
Dear Friends, The World Bank is planning to EXPAND its structural adjustment lending! Please add your signature to the letter below calling upon the World Bank to conduct broad and thorough consultations on its structural adjustment policy. Send your name, organization, and country to: Globalization Challenge Initiative prior to 12 noon on Monday, February 26, 2001. After decades of debate, controversy and protest about the social and environmental consequences of the liberalization, privatization, fiscal austerity, and subsidy-cutting conditions attached to adjustment loans, the World Bank plans to revise its operational policy on structural adjustment lending. It is not certain that the revision will address the substantive concerns of civil society organizations around the world, nor that the new policy will reflect some of the principles of participation, and national ownership promoted in recent vehicles such as the Poverty Reduction Strategy initiative. There are two risks inherent in the revision of the World Bank's structural adjustment policy. First, the Bank could use the operational policy revision to polish the tarnished image of structural adjustment loans, renaming them Poverty Reduction Support Credits (PRSCs) and Development Support Loans (DSLs). Second, the operational policy revision could remove the current language which restricts the amount of adjustment lending to 25 percent of the World Bank's portfolio averaged over 3 years. Adjustment lending is a cheap way to move large amounts of money and the Bank's soft loan window, IDA, has extra money to disburse. IDA would like to boost lending from $2.3 billion to $3 billion in FY01 and $3.2 billion in FY02. The plan to boost adjustment lending is particularly directed toward the poorer countries, especially Africa. The letter below proposes to the World Bank basic principles to achieve a broad and accountable consultation process, including the involvement of an external advisory group. In addition to signing yourself, please forward this letter to other groups and networks. In order to sign on to the letter, please send your name, organization, and country to: Globalization Challenge Initiative prior to 12 noon on Monday, February 26, 2001. Sincerely yours, Globalization Challenge Initiative SAPRIN Secretariat/Development Gap Friends of the Earth USA _______________________________
Ms. Joanne Salop Vice President, Operations Policy and Strategy The World Bank 1818 H Street, NW Washington DC 20433
Dear Ms. Salop: The undersigned groups believe that the World Bank has a fundamental obligation to carry out broad and thorough public consultations regarding its proposed operational policy on structural adjustment. Few other World Bank programs have had such far-reaching impact upon people, the environment, local institutions, and national economies, or have generated such controversy over so many years. Furthermore, the adoption of a new operational policy provides a significant opportunity to ensure coherence between the practice of economic-reform lending and the principles of pro-poor economic growth, national ownership, and civil-society participation, which are identified as the objectives of the Bank-supported Poverty Reduction Strategies, the Bank's Comprehensive Development Framework, and are upheld in the World Development Report 2000. The World Bank set an important standard of transparency and participation with the practice of broad consultation on the revision of its information-disclosure policy and its resettlement policy. It is important that this standard be met with regard to an issue as central to the Bank's operations - and as contentious - as structural adjustment. Indeed, the World Bank has recognized that one of the major reasons for failure of structural adjustment programs is the lack of resolve on the part of governments and their citizens. Therefore, failure to carry out meaningful consultation over the new policy could raise serious concerns about the World Bank's good-faith commitment to participation and further alienate critics of adjustment operations. A review of a preliminary draft of "Adjustment Lending: Retrospective and Implications" suggests that the World Bank and many civil-society groups would define the issues of the adjustment debate quite differently. For this reason, we propose that the World Bank immediately share responsibility with an external advisory committee to define more precisely the terms of consultation over the operational policy proposal, including the selection of countries for direct consultations, the schedule, the agenda for the consultations, the participants to be invited, and the mechanisms for accountability to issues raised by civil society groups. Although the details of the consultation process might be designed with such an external group, we hope that the process will observe the following general principles: Focus on the proposed policy: We believe that it is essential that the consultations occur around the proposed new operational policy itself, not simply around the retrospective study or any other discussion document. However, the World Bank could invite comment on the retrospective study in advance of consultations, which might inform the draft of the new policy. Adequate timeframe: The breadth and complexity of the issues raised by structural adjustment, as well as the number of people affected, suggest that the entire consultation process should be carried out over a minimum of one year, with the possibility of extending the timeframe as necessary. In the case of country or regional consultations, a complete schedule should be posted as early as possible, and documents made available in local languages to local/regional groups who might participate at least four weeks in advance of a consultation. Accountability: The World Bank should ensure that the points of discussion in each consultation process are accurately documented and then shared with the participants in the consultation for comment prior to submitting it to Bank headquarters. At a global level, we encourage the World Bank to develop a document that synthesizes the major issues of concern raised through the consultation process and offers the institution's response to each issue, together with an indication of proposed modifications to the draft policy. Broad-based participation: Consultations should build upon existing global and country-level networks, particularly those that have been active on adjustment-related issues. In individual countries, consultations should involve representatives of grassroots organizations that are directly affected by structural adjustment programs, as well as civil-society organizations, academics, and parliamentarians. We urge that any direct consultations be facilitated by a third party mutually agreeable to the World Bank and civil society groups. Access to information: To facilitate the broadest possible participation, the draft policy and at least the executive summary of the discussion document should be translated into at least all major UN languages, preferably before any consultation begins. In individual countries, the documents should be translated into the local language of that country. All documents and minutes of all consultations should be also accessible through the World Bank website. Diversity of country experiences: Consultations should be carried out in all major regions of Bank operations. In selecting individual countries, we urge the World Bank to include a mix of both low-income and middle-income countries, as well as countries that demonstrate both "successful " and "unsuccessful" adjustment performance records. Furthermore, if civil-society groups request a consultation in a country where one is not scheduled, they should be encouraged to meet with the World Bank Resident Representative, who can report the results of the meeting to headquarters. Outreach: The Bank should not rely only upon its website to disseminate information about the consultations. Instead it should actively engage its resident missions, through NGO liaison officers, to conduct outreach to civil-society groups and disseminate key documents several months in advance of the consultation. The Bank should also involve its civil-society unit in conducting outreach at a global level. Involving the IMF: The consultations are likely to raise issues and concerns that are equally relevant to the programs of the International Monetary Fund as they are to the World Bank. Therefore, we urge the World Bank to invite IMF staff representatives to all consultations. If their participation is not possible, we urge the World Bank at a minimum to share the key documents summarizing the results of consultation with the IMF staff. Finally, we urge the World Bank not to preempt the consultation process by taking irreversible action with regard to the Poverty Reduction Support Credit, its new structural adjustment loan program to low-income countries that produce a Poverty Reduction Strategy Paper. An open, transparent, and participatory process designed in accordance with the above principles would go a long ways toward building confidence in the World Bank's commitment to the ideals of poverty reduction, participation, and national ownership. We would be pleased to meet with you to discuss the proposal for an external advisory committee and the above principles at greater length. Sincerely yours, Bank Information Center, Washington, DC, USA Friends of the Earth USA, Washington, DC, USA Globalization Challenge Initiative, Washington, DC, USA' World Vision International, New York, USA American Jewish World Service, New York, USA
cc: Executive Directors to the World Bank END |