Discussion Between Civil Society and the President of the World Bank

On September 12, 2002, the President of the World Bank, Mr. James D. Wolfensohn (JDW) participated in a videolink discussion with civil society organizations from Albania (Tirana), Belgium (Brussels), Ecuador (Quito), Ghana (Accra), and India (New Delhi). The purpose of this discussion was to learn about, and debate issues of concern to these organizations prior to the 2002 World Bank/IMF Annual Meetings in Washington D.C. Mr. Wolfensohn chaired the discussion and replied to questions from CSOs in each of the five countries. The one and half hour session allowed for three rounds of questions and replies from Mr. Wolfensohn.

Accra, Ghana (chaired by Augusta Sena Gabianu)

Ms. Augusta Sena Gabianu asked for clarification on the issue of conditionalities imposed by the World Bank (Bank) and the International Monetary Fund (IMF) in the "good" programs like HIPC, and in particular why civil society does not have enough knowledge of the details of these conditionalities? Another question concerned privatization of water utilities in Ghana, and why water, which is so important to life of the poor people goes into the hands of the private sector. A supplementary question asked what the Bank is doing about the issue of privatization of utility companies? The final question in this round was about the agricultural subsidies in the developed world, and the Bank's position in this regard.

JDW: Began by confirming the seriousness of the questions and especially the one on the HIPC initiative which would apply to any of the HIPC countries. He gave a brief background on the issue of conditionalities, explaining that the savings, which the countries get in the HIPC process, are specifically intended to flow towards the social sectors, and poverty reduction activities – such as health and education. He added that this positive conditionality had been instrumental in convincing many donors to allocate funds to the debt relief effort. JDW said that he was not familiar with the issue of conditionalities being a problem in HIPC or a subject of criticism. HIPC has reduced the debt of participating countries by 2/3 and has generated over $1 billion dollars in savings per year and this figure is expected to raise to $2 billion in the coming year. The greatest limitation with the HPIC initiative, has always been that it is not broad enough to cover additional countries. Currently the efforts of the Bank are to bring the 26 countries participating in the initiative to a completion point. The Bank is trying now to promote the "toping-up" of the program, so that the targets are met. Mr. Wolfensohn stressed that the Bank will be continuing its efforts in this respect, and that he will be discussing these issues at the upcoming Annual Meetings (September 28/29, 2002). He asked civil society to report any cases of problems and discrepancies with HIPC to the Bank offices in their countries, which will then be directed to the right managers.

Addressing the issue of water privatization, Mr. Wolfensohn stressed that there is a misunderstanding on this issue as the Bank has never insisted that water be privatized in its loans. The problem the Bank is trying to resolve is how can we get water to an entire population, and particularly the poor. The Bank has learned that water is one of the most misunderstood and political of public goods, as well as one of the worst managed, plagued by widespread waste in many sectors. He noted that the issue of water management would be key for the coming decade, and more important than who manages water - government or private companies - is the quality and coverage of the services. To conclude, he added that although there are many examples where privatization of water has benefited the poor, the Bank has no fixed policy on this as the best approach depends on the local context.

Brussels, Belgium (Chaired by Simon Stoker, Eurostep)

Helen Holder, HelpAge International asked: In the light of the Poverty and Social Impact Assessments (PSIAs) that the World Bank is currently piloting, what guarantees can the Bank make today that all civil society, including marginalized groups, will be included in these assessments and in future PRSP consultation, monitoring and implementation?

JDW: The Bank has brought the issue of participation and consultation to the center of its efforts both through the CDF and the PRSP concepts. One should understand that for many governments participation of civil society in the decision making process is still not widely accepted, since they argue that they were elected to represent the population in these processes. What the Bank has been successful in doing so far is furthering the view that consultations are an integral process of democracy. The Bank, however, is not a "world government" and thus cannot provide a guarantee that civil society will effectively participate in these poverty assessment processes as the final decision must rest with the sovereign governments. We will, however, continue to encourage governments to consult widely on their macro policies.

New Delhi, India (chaired by Mr. Sanjiv Kaura National Coordinator, NAFRE)

Mr. Sanjiv Kaura asked: How does the Bank intend to influence the government to continue improving education policy and programs in India, especially in the field of formal education?

JDW: The Bank has been making efforts to increase spending on education for some time now. India is a singular case because of its strong regional structure, where educational conditions and challenges can vary from state to state. The Bank's global objective is to reach the Millennium Development Goal on education which is universal primary education in the developing world by 2015. The Bank has proposed a 23 country fast track approach where educational budgets are increased in order to achieve the educational goals more quickly. Mr. Wolfensohn will be discussing this fast track proposal during the upcoming Annual Meetings (September 2002) and if governments agree to it, then donors will need to commit the resources.

Tirana, Albania (chaired by Anesti Kashta, Albanian Socio-Economic Think Tank)

Mr. Anesti Kasha stated that Albania is the first country in the Europe and Central Asian Region to have completed a PRSP which was approved by the Government and endorsed by the Executive Boards of IMF and WB. This process was characterized by an intensive participatory efforts throughout the country. At the same time, Albania has been involved in MDG initiative. How can the World Bank help these two initiatives be part of a consistent strategy which will better address the needs of the country? Further, how does the Bank see the relation of these initiatives with the Stabilization and Association Process?

JDW: The Bank works with governments to encourage consistent and integrated development strategies, which should be a result of broad consultations. In the end there needs to be consensus between the government, the civil society and the private sector on development strategies within a given country. The objective of the PRSP process is, precisely, to ensure consistency between these processes and to bring them together.

Quito, Ecuador (chaired by Xavier Bustamante, Natura Foundation)

Mr. Xavier Bustamante: In the light of political, economic and social crisis faced by many countries in the Latin American region, and knowing the results of the Johannesburg summit, what role will the Bank play in strengthening the sustainable development process in the developing world?

JDW: The crisis in Latin America has been the preoccupation of the Bank for some time now. The immediate crisis situations in Brazil and Uruguay have been addressed, and in Argentina the Bank is working closely with the government to address short and long term poverty reduction. The Bank is supporting these countries with social programs, while the macroeconomic framework is being addressed by the International Monetary Fund. The Annual Meetings 2002 will be used as the forum for a broader discussion of the issue. Mr. Wolfensohn will be traveling to the region in the next few months, and meeting with its leaders and with civil society to see how the Bank can help further in addressing these serious economic and social issues.
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Second round of questions

Accra, Ghana

A Ghanaian participant said that the Information Technology (IT) sector in the developing countries have few barriers protecting it. There is therefore a strong need to support the development of local capacity in the local markets. What is the Bank's policy to eliminate the situation where the development of local IT capacity is being impeded? The next question concerned the issue of successful public/private partnerships to pilot housing initiatives in Ghana, and what the Bank is planning to do in order to support this initiative? Finally, a participant asked how the Bank and other institutions guarantees the quality and accuracy of research data used in economic analysis, and whether the Bank is interested in supporting efforts to improve the quality of data by partnering with CSO researchers.

JDW: Mr. Wolfensohn stressed that one of the fundamental objectives of the Bank's IT efforts is specifically to develop capacity of local information technology in developing countries. For this reason, he asked specifics on whether Bank action is holding back the development of local capacity and content, as this would be totally in contradiction with the objectives of the Bank's efforts in the IT field. If so, these cases should be communicated to Bank offices so we can take needed action to reserve this process. Mr. Wolfensohn is not familiar with the specific housing program mentioned in Ghana, but requested more details through the local office, as he said there might be an interest by the Bank or the IFC to finance the initiative. If successful, these programs could be scaled up and implemented in other countries, particularly in Africa. Regarding the issue of quality of research data and role of civil society, Mr. Wolfensohn shared with the participants details of the network of 300 research centers, which the Bank has been involved in creating, through the Global Development Network (GDN) and in partnership with the Mellon Foundation.

Brussels, Belgium

As a follow up question to the first round, the Chairperson asked what the role of the poverty and social assessments (PSAs) is in terms of increasing inclusion of Civil Society in the macro-economic policy decision process.

Eva Hangstaengl, CIDSE asked: What are the Bank's plans to support the follow-up process to the Monterrey Financing for Development Conference, especially how the upcoming meeting of ECOSOC and the Bank and IMF could be made more efficient? Would the Bank support the proposal to focus that meeting on 1-2 burning issues, such as tax cooperation, which could be discussed in more depth and would lead to concrete conclusions/agreements between UN and WB to be monitored and implemented during the following year? Would the World Bank agree that a sovereign debt workout mechanisms (para. 60 of the Monterrey Consensus) be another of these issues to be jointly discussed and developed? This could include the experience of the Bank's International Centre for Settlement of Investment Disputes (ICSID) (IMF, Krueger 2001).

JDW: Poverty and social assessments are being carried out to specifically ensure that there is wide participation of all stakeholders in the poverty reduction programs. As he said before, there is a problem more with the use of the word "guarantee", however, as the ultimate decision and responsibility for promoting these consultations is governments to make. The Bank will, nonetheless, keep up the pressure for continued broad participation and convey to governments that it is in their interest to do so.

Addressing the issue of follow-up to the Monterrey process, JDW stressed that this issue will be on the agenda of the upcoming Annual Meetings of the Bank and the IMF and that he will be able to report back on the agreements within a couple of weeks. He also made a note on the continuing dialogue between the Bank and the ECOSOC, and stressed that the progress of this process is now in the hands of the finance ministers involved.

New Delhi, India

Mr. Kaura asked how the Bank is intending to address the issue of stigma and discrimination against people living with HIV/AIDS and how it is Bank planning to improve the governance over its projects in this area? The second question touched on the issue of common property rights, and how the World Bank going to secure transparency over the issue of land tenure in the projects it finances?

JDW: In addressing this question, Mr. Wolfensohn underlined his continued commitment to the battle against AIDS, he also stressed that the issues of stigma and discrimination will have to be dealt with internally in each country by its people. That will take time and requires effective educational efforts in order to change ingrained attitudes. He noted the Bank's primary role in pioneering the support of HIV/AIDS programs in India, and informed that the Bank is now supporting a second AIDS program there. On the issue of common property rights, he pointed out the different approaches applied by such countries as Zimbabwe, China, and Russia. Regardless of what approach is being implemented, the Bank recognizes that property rights for the poor is an essential element for poverty reduction. It also recognizes that it is an extremely political issue with many nuances and country contexts. He stressed that the Bank's approach is to work closely with the governments to distribute resources and transfer property rights to the poor people.

Tirana, Albania

Mr. Genc Ruli, President of Institute for Contemporary Studies stated that after September 11, there were two opinions circulating about continued international support to the Balkan countries: the first that the donors' attention will be focused on Central Asia, which will consequently reduce assistance to the Balkan countries. The second opinion is that assistance to the Balkans will not be reduced. What is your opinion/prediction in this regard?

JDW: Mr. Wolfensohn strongly stressed that the Bank does not intend to withdraw from the Balkans. He highlighted the situation in the region, which is still fragile, but emphasized the considerable progress that has already been made in promoting re-construction and governance. He reconfirmed that there are no plans for the Bank to diminish its presence. The increase in lending to the Central Asia republics results from the many years of very limited presence of the Bank in that region.

Quito, Ecuador

Mr. Segundo Andrado commented on the many successful examples of participatory development initiatives undertaken by indigenous peoples in Ecuador and elsewhere and asked how the Bank can improve the effectiveness of its lending operations in order to provide more direct assistance to indigenous peoples?

JDW: Mr. Wolfensohn stressed his personal admiration of indigenous culture and achievements and his commitment to increase Bank support to indigenous development efforts. The Bank has a great deal to learn from indigenous people and their traditional approach to sustainable development. In his view, the most important issue for indigenous peoples now is to consolidate the many significant gains made in countries such as Ecuador. There has been progress, but it is still fragile. He also mentioned the upcoming roundtable discussion of indigenous leaders with Bank staff to review the review of indigenous policies (OD 4.20), which is scheduled to take place in October in Washington, DC.

After the second round of questions, Mr. Wolfensohn made a more general comment on the extend of responsibility the Bank can take over the issues raised in the questions asked by the civil society participants during this discussion. He stressed that the while the Bank has been trying hard to address all these issues, it cannot take full responsibility for successes or failures of many of these programs and initiatives, as they involve other key actors such as governments and donor agencies. Feedback from civil society on Bank policies and programs is greatly appreciated by the Bank, but the Bank may not be able to give answers to all the issues raised during this discussion. What the Bank will do is take careful note of all the questions raised and encourages the CSO representatives to contact the local Bank offices to follow-up on these.

Third round of questions

Accra, Ghana

Nana Oye Mansah Yeboah I pointed out that the importance of private sector development was the key theme of the 2001 World Development Report. Small and medium enterprises constitute 80% of private sector in Ghana. What special programs the Bank has for small and medium enterprises in the framework of its poverty reduction efforts? The second question tackled the issue of Bank funding of solar powered multifunctional units in rural areas.

JDW: Informed that support for small and medium enterprises and micro credit efforts are major initiatives of the private sector arm of the Bank – the International Finance Corporation (IFC). He made note of the fact that the Bank has been making every effort to expand these programs, when possible, on a commercial scale. He suggested that all interested civil society groups should first contact the Bank's local offices in their countries for first-hand information on the programs operating in their countries. Answering the second question, Mr. Wolfensohn spoke about some good initiatives of the Bank with use of wind and solar energy and stressed the growing support for renewable energy within the Bank.

Brussels, Belgium

Ms. Sevdalina Rukanova, European Foundation Centre (and also on behalf of the JADE Network) asked: When the Bank talks about partnerships with civil society, the private sector and foundations, what structures and mechanisms does it plan to introduce in an effort to ensure timely identification of the best practices in these partnerships? How does the Bank intend to ensure that there is support for these successful partnerships when they are established?

Mr. Johan Bosman, KWIA - The final question from Brussels was: "Why is the World Bank undermining international standard setting processes for indigenous peoples' rights by supporting programs and projects under the WB's indigenous peoples' policy in countries where the government denies the existence of indigenous peoples inside the country?"

JDW: The timely identification and mainstreaming of best practices is an integral aspect of ensuring successful institutional partnerships. He stressed that no organization or government alone have the resources needed to promote sustainable development and therefore there is even greater need for good working partnerships in the global community. The Bank's experience in expanding and scaling up best practices has not always been as effective as it could be, but it is committed to intensify its work on it.

On the question of why the Bank funds government who don't recognize indigenous identity and rights, Mr. Wolfensohn responded that the Bank has a hard time since it is clearly on the forefront of supporting indigenous peoples. In these situations the Bank works with governments to be more open and inclusive of their indigenous populations. On the other hand, the Bank's role is somewhat limited and real change in perceptions and policies can only come from within the countries themselves.

New Delhi, India

Mr. Kaura said that the last 50 years in India are seen as the time of many shifting development promises and broken deadlines. Would the Bank be interested in helping to institute a public media accountability system in countries, so that national governments would be obliged to print in the local media a statement as soon as they achieve or break each of the promises or deadlines?

JDW: The idea of public accounting systems such as governance report cards is definitely a good one, and there are growing local experiences emerging around the world. Neither the Bank nor governments can or should avoid following through on their service delivery promises and deadlines, and they should also be adopted at the global level. As with the other issues brought up though, while the Bank can encourage governments to adopt these mechanisms of accountability, government have the ultimate responsibility to implement them in consultation with civil society.

Tirana, Albania

Ms. Diana Culi, Albanian Independent Forum of Women asked the Bank's view on if the recently concluded Johannesburg Summit on Sustainable Development changed the perception of development in the future?

JDW: see final response from JDW below.

Quito, Ecuador

Mrs. Mónica Hernández, Fundación Alternativa and Mr. Boris Cornejo, Fundación Esquel asked the questions in this round. They asked how the Bank could help the country strengthen the civil society sector in Ecuador in an effort to improve the difficult political, economic and social situation there. One of ways the Bank and other donors could help is to support micro-credit initiatives geared to low-income entrepreneurs. Would Mr. Wolfensohn be willing to discuss this issue with the civil society during his upcoming visit to the region? The final question concerned the widening digital divide between the rich and the poor countries as a result of the globalization and modernization processes. How the Bank plans to close this gap, especially involving young people?

JDW: Mr. Wolfensohn spoke about numerous information technology initiatives the Bank is supporting worldwide, including the distance-learning centers the Bank is setting up in the developing countries through GDLN and other initiatives of the World Bank Institute (WBI), as well as the Development Gateway, which is encouraging the development of local content and web technology in countries throughout the world. The issue of closing the digital divide is of particular interest to Mr. Wolfensohn and he stressed that it is also a growing priority for the Bank. JDW also reiterated his intention to meet with CSOs during his upcoming trip to Latin America.

Mr. Wolfesohn began his concluding comments of the videoconference by reflecting on his recent participation in the World Summit on Sustainable Development. While he shared the initial apprehension of many people as to the possible results of the Earth Summit, he was impressed by the openness and breadth of the dialogue. The most positive outcome was the growing consensus on the part of both developing and developed countries on the need for a new balance and partnership, since this also builds on the momentum begun at the Monterrey Conference.

However, all of these international agreements will not prove effective unless the agreed plans and programs are properly implemented. Implementation, he underlined, is the key for achieving the Millennium Development Goals. Now the developed countries need to provide financial support for implementation of all the agreed targets and programs, as well as reduce the level of agricultural subsidies and open their markets to the developing world. In short, the time has come to take action and deliver on the commitments made.

Mr. Wolfensohn then wrapped up the videoconference by thanking all participants again for their questions and participation. He also promised to have Bank staff follow-up on the specific issues raised during the discussion.

List of participants in the discussion