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Down to Earth IFIs Update

No. 10, November 2000

New research says Indonesia doesn't need IMF or World Bank

As the IFIs threaten withdrawal of funds again, new research by Down to Earth raises questions about whether Indonesia needs the money of the IMF and World Bank at all. With debt payments of US$3 – 5bn next year, many believe there is no choice for the Government of Indonesia (GoI).

However, ten alternative sources of finding billions of dollars in Indonesia are identified and the implications considered of each. Anyone of these of would mean that GoI could say no to the IFIs and reclaim economic sovereignty.

See also this month’s IFI Factsheet on Debt and Alternative Funding.

World Bank proposes world commission on mining

Bank president James Wolfensohn surprised NGOs recently by suggesting that he would consider establishing a new world commission to look into concerns about the oil, gas and mining industries.

Responding to a call from Friends of the Earth International for a ban on World Bank financing for projects in the extractive industries, Wolfensohn said he was willing to look into a mechanism to "look at the pluses and the minuses, and see if together we can come up with something that will either lead to an exclusion or to an inclusion on certain terms of what we are doing."

Wolfensohn suggested this could be similar to the World Commission on Dams (WCD), the multi-stakeholder body set up two years ago in response to campaigns against the World Bank's involvement in destructive dam projects. This body, whilst controversial in a number of aspects of its founding and execution, has generated much interesting material on the impacts of dams, and is likely to endorse a number of approaches that NGOs have been suggesting for some time. Groups will then have to work to ensure that funding agencies, governments and companies accept and implement the proposals. Strategy discussions have begun to take place between NGOs most closely involved in the oil, gas and mining campaign and others who are veterans of the WCD processes. It does not appear that any new commission will be established in the near future, but many options for clarifying and limiting the World Bank's aggressive promotion of extractive industries are being considered.
(Source: Bretton Woods Project Newsletter, Autumn 2000 available at

World Bank review of environment policy

The World Bank has recently been undertaking consultations for its review of environment policy. The final strategy is to be released next year. Whilst this will not have the status of a binding policy, it will influence the Bank's overall positioning on sustainable development issues. The draft strategy has suggested three objectives: improving health by reducing peoples' exposure to environmental dangers, enhancing livelihoods by supporting sustainable management of natural resources and reducing vulnerability to environmental risks such as national disasters and climate change. A number of people consulted about the strategy have emphasised that it does not adequately address what the Bank will do in all its modes of operation, for example as a lending institution, think tank and imposer of national policy conditions. Its approach to reducing vulnerability to risks such as climate change is limited to the unambitious agenda of improving information flow and aiding adaptation to new conditions.

The delayed Operations Evaluation Department Report Environment Review, a major input to the strategy, has recently been released. It contains many criticisms of the current environmental performance of the Bank. The draft strategy document and the OED report are currently being discussed in an online forum.

World Bank completes consultations on forestry review

The series of eight Regional Consultations on the World Bank's forest policy have been completed. Reports of these meetings and a document summarizing the main issues are now on the web. The Operations Evaluations Group has submitted a report on the International Finance Corporation’s compliance with the Forest Policy. The Bank circulated an Issues paper, drawing out some of the lessons from the OED and Regional Consultations. It has also now started discussion of a preliminary draft of a new forest strategy and policy, in bullet point format, based on the findings of all these reviews. A Technical Advisory Group, including governments, companies and NGOs has met once to discuss this draft strategy and policy. The Bank has also agreed that its new forest policy safeguards will also apply to structural adjustment loans, but it is currently unclear what this would mean in practice.

Links and websites

Short briefings on World Bank and IMF

A series of NGO briefings on a wide range of policy, project and institutional issues relating to the World Bank and IMF. Commissioned by the Bank Information Centre from authors worldwide, at the request of the Central and Eastern European Bank watch Network.

Profiling Problem IFC Projects

A series of short case studies of projects backed by the International Finance Corporation. They raise serious issues about the extent of IFC attempts to introduce development impact analysis and safeguard policies.

Globalizing Poverty, the World Bank, IMF and WTO

A special report from The Ecologist magazine with leading authors discussing the problems with global economic institutions.

Dubious Development

Friends of the Earth report examining private sector lending of the World Bank Group.

A Makeover for the Bretton Woods Twins?

Heinrich Böll Foundation compilation of responses to the Meltzer Commission proposals for reforming the World Bank and IMF.

Resistance to IMF

World Development Movement report on protests against IMF policies across the world.

Background to Globalization

A non-technical discussion of the political and economic aspects of globalisation.

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This IFI update is published by Down to Earth, the International Campaign for Ecological Justice in Indonesia.

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