From: Tsegai Emmanuel (emmanuelt40@gmail.com)
Date: Mon May 17 2010 - 13:53:02 EDT
Africa Has Less Say After Changes in World Bank
Voting<http://www.truthout.org/africa-has-less-say-after-changes-world-bank-voting59570>
Monday 17 May 2010
by: Hilaire Avril | *Inter Press
Service*<http://www.ipsnews.net/news.asp?idnews=51457>
Paris - The World Bank has described its recent increase of 3.13 percent in
the voting power of emerging economies as a reform "to enhance voice and
participation of developing and transition countries". But the shift has
actually decreased a third of African countries’ share of votes.
Eighteen sub-Saharan countries have thus lost a measure of their already
modest influence in the institution’s decision-making process. Nigeria and
South Africa are hardest hit, their voting powers having been decreased by
about 10 percent.
Only oil-rich Sudan - whose president has been indicted by the International
Criminal Court on suspicion of war crimes - has seen its share of votes
increase.
The World Bank, internationally mandated with financing development
projects, has long been criticised by civil society and recipient countries
as unrepresentative of those it claims to be helping. Sub-Saharan Africa,
the target of many of its "poverty reduction" programmes, retains a total of
less than six percent of the institution’s voting rights.
Finally responding to critics, the Bank has in recent years indicated some
intention towards reforming its governance and making it more inclusive of
its purported beneficiaries. Its Istanbul Declaration of October 2009
committed to "protect the voting power of the smallest poor countries".
But on Apr 25, it shuffled voting rights to increase the share of China (by
1.64 percent), South Korea (0.58 percent), Turkey (0.55 percent), Mexico
(0.5 percent), and Singapore (0.24 percent). According to the Bank’s own
economic definitions, South Korea and Singapore are high-income countries,
whereas Mexico and Turkey are upper middle-income countries.
Criticising the adjustments, head of research for anti-poverty campaigner
Oxfam, Duncan Green, noted in a blog entry titled "The World Bank breaks its
promises on Africa’s voting power" that "the reform reflects the shift in
global GDP (gross domestic product), and so benefits the big emerging
economies, not the slower growing economies in Africa".
Adds Sebastien Fourmy, who follows global financial institutions at Oxfam’s
French chapter: "This reform is an attempt at making nice with the main
emerging world players, such as China and Brazil, in the hope that they will
contribute a larger share of the Bank’s funding.
"This comes at a point where Europe has growing difficulties in meeting its
financial commitments to development," he explains. "European countries have
therefore agreed to a minor reduction in their voting powers but most are
still clinging to their chairs."
"And, of course, the United States remains the only member with the power to
veto the Bank’s decisions," Fourmy confirms. This is because the Bank’s
voting system weighs votes according to countries’ shares of the world’s
GDP.
South Africa’s finance minister, Pravin Gordhan, reportedly said his country
was disappointed with the reforms as sub-Saharan countries’ say was
diminished despite ongoing pressure that the Bank should boost the voices of
developing countries in decision-making at the Bank and the International
Monetary Fund (IMF).
World Bank president Robert Zoellick admitted that, "the change in
voting-power helps us better reflect the realities of a new multi-polar
global economy where developing countries are now key global players". Yet,
endorsement of the shift in voting power was "crucial for the Bank’s
legitimacy", according to Zoellick.
The British watchdog initiative called the Bretton Woods Project, which
monitors the World Bank and the IMF, said in a recent report that: "a closer
look shows that the World Bank will continue to be overwhelmingly dominated
by rich countries.
"Developing countries represent over 80 percent of the world's population
and the Bank's membership. They are where almost all of the Bank's
activities take place" -- and yet, "its governance remains illegitimate and
outdated," the report argued.
Fourmy agrees: "In the end, the fundamentals of decision-making at the Bank
have been carefully preserved."
Moreover, "even if votes were effectively reformed in favour of its poorest
members, decisions will still be taken by consensus rather than votes. Out
of the 24 administrator countries that usually craft consensus decisions at
the Bank, only two are from sub-Saharan Africa," explains Fourmy. "There was
talk of including a third one but that idea has not been mentioned in a
while," he adds.
"We hope that emerging economies whose voting rights were increased are
going to bear increasing responsibility in the funding of development but
that remains to be seen," says Fourmy. "So far, none of them have expressed
clear commitment or a detailed vision of their approach to development
assistance."
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