Bank dictatorship

The latest Human Development Report from the United Nations focuses on democracy – or the lack of it – around the world. It turns the spotlight not just on governments but on international institutions, pointing to the crisis of public confidence in the legitimacy and effectiveness of the International Monetary Fund (IMF) and the World Bank.

* The IMF and World Bank are dictating domestic policy more and more, through conditions attached to their loans. In the 1980s borrowing countries were required to meet between 6 and 10 performance criteria; in the 1990s this rose to 26.

* Although developing countries are deeply affected by IMF and World Bank decisions they have little influence on their decision-making. Nearly half of the voting power rests in the hands of seven countries [Japan, France, Britain, Saudi Arabia, the Russian Federation, Germany and the US].

* The minutes of executive board meetings are not published; votes are not taken and so cannot be recorded or publicized. This means that citizens of member countries (or interested outsiders) cannot hold executive directors or their governments accountable for their policies in the IMF or World Bank.

* The heads of the World Bank and IMF are chosen according to a political convention whereby the US and Europe nominate their candidate for each respectively. ‘Other countries and critics,’ comments the report, ‘rightly brand the process as undemocratic and insufficiently accountable.’

Deepening Democracy at the Global Level Human Development Report 2002, United Nations.

New Internationalist issue 352 magazine cover This article is from the December 2002 issue of New Internationalist.
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