Washington, DC — Efforts to give developing nations, and Africa in particular, a larger voice in World Bank and International Monetary Fund decision-making received a chilly reception at this year's spring meetings of the Breton Woods institutions.
"It's a battle," South African Finance Minister Trevor Manuel told allAfrica.com. "These battles are not 24 days in Iraq. These are tough, tough battles." Manuel is also chairman of the joint Bank-IMF Development Committee which advises the Boards of Governors of the Bank and the Fund on critical development issues.
Both the Bank and the Fund have a membership of 184 nations, but unlike the United Nations, member nations become "shareholders" of the two bodies according to their economic status. Consequently, the United States followed by Japan and Germany have the greatest voting power. Big shareholders like these nations have one representative seat on the 24-seat executive board, while poorer nations share regional seats.
In Africa's case, twenty-four sub-Saharan African nations share one seat, while the remaining 20 nations of sub-Saharan Africa share another. This gives them two representatives on the executive board.
"The key issue is driven by the unfairness of the Bretton Woods system," says Manuel. "On the one hand you've got a UN system - one person one vote. And on the other hand you have this kind of arrangement where 20 countries account for less than two percent of the votes. And that needs to be corrected."
At last September's meetings, the Development Committee asked its staff to begin drafting a paper, for consideration at this year's spring meeting, outlining possible ways of expanding the voice of developing nations. The paper, released to the press by the Development Committee this weekend, offers little, suggesting that better representation is not a priority partly because the poverty reduction strategy papers that developing nations must prepare before qualifying for loans gives them a voice in Bank and Fund programs that affect their countries.
In its very first section, the paper said it was proceeding with two basic assumptions: that the present constituency-based system of representation "has considerable advantages," and that there was "general acceptance" of "the principle underlying the distribution of quotas, shares and voting rights - that these should in large measure reflect the relative importance of member countries in the global economy."
The paper also contends that the two institutions are promoting "diversity in staffing" in an effort to better understand the concerns of developing nations. It is not clear from the paper at what level this increase in diversity is occurring although six new staff positions in the Executive Directors' offices for the two African constituencies at the Bank and Fund will be created.
Sign up for free AllAfrica Newsletters
Get the latest in African news delivered straight to your inbox
There will also be "enhanced" training and capacity building, says Manuel, for people at the local level "who need to be more familiar with systems and processes."
"Its a very, very important first step," insists Manuel who says just having the issue on the agenda and keeping it on the agenda is significant. "It is the recognition that the poorest countries are the least best serviced because of the constituency arrangement. But it's a difficult process."
In the end, it's the shareholders who will make the decision. But "the problem," says Manuel, "is that shareholders don't like giving up [power]...Nobody wants to give up anything...The interests are all vested and, in many respects, conflicting."
