Even the most isolated and disinterested of us, would have heard of the IMF and World Bank Meeting that will be held in Singapore over the next week or so. The banners,newly painted signages, freshly metalled highways etc... it's obvious. The usual overkill of the Asian host!
I do confess that I know much more about the protest ( or non-protest in Singapore's case) than about the IMF and the WB. So after googling these two by-now ubiquitous acronyms,I now proudly declare that I understand the two institutions a wee bit more.
Hence, in accordance with the proud traditions passed down to me from my predecessors ( some say from Hippocrates, others say from Phua Chu Kang- anyway it is commonly known in surgical circles as "see one, do one, teach one"), I will try to enlighten the even less enlightened ones amongst you readers.
1.What's the Fuss about the Annual Meetings
The Board of Governors of the International Monetary Fund and the Boards of Governors of the World Bank Group normally meet once a year to discuss the work of their respective institutions. The Annual Meetings, which generally take place in September-October, have customarily been held in Washington for two consecutive years and in another member country in the third year. The Annual Meetings are preceded by the ministerial-level meetings of the International Monetary and Financial Committee (IMFC), the IMF's policy-guiding body, and the Development Committee, a joint IMF-World Bank forum.
2.IMF and WB were rather displeased with Singapore (ok, there were really pissed!)
Joint Statement From World Bank And IMF On CSO Participation In The Annual Meetings In Singapore
Press Release No. 06/193
September 7, 2006
The World Bank and International Monetary Fund have accredited nearly 500 civil society representatives from more than 45 countries to attend the 2006 Annual Meetings in Singapore, a record number. Jointly with many of these Civil Society Organizations, we have organized what promises to be a dynamic Civil Society Forum at the Annual Meetings, with more than 40 sessions planned on critical development issues.
In the interest of good governance, transparency and accountability, we urge the Government of Singapore to allow all properly accredited civil society representatives to attend our meetings. We have consistently opposed any restrictions on full participation and peaceful expression of views. Open dialogue with civil society is also important for the effective operation of our institutions.
The Singapore Government has informed us of their objection to the accreditation of a number of these civil society representatives, and has stated their intention to block those individuals' access to the Annual Meetings. These individuals have been cleared to attend the Annual Meetings by their respective governments and we have accredited them according to our standard procedure.
We believe that all individuals who have been accredited to the Annual Meetings should be allowed to attend, consistent with the Memorandum of Understanding between the World Bank/IMF and the host government. We strongly urge the Singapore government to act swiftly and reverse their decision on entry and access to the Meetings for these representatives.
3.IMF & WB are used to engagement with Civil Society Organisations (CSO) (they don't see what the fuss is about)
The IMF (& WB) seeks to engage with CSOs through information sharing, dialogue, and consultation at both global and national levels.
The IMF uses the term “civil society organization” to refer to the wide range of citizens’ associations that exists in virtually all member countries to provide benefits, services or political influence to specific groups within society.
Over the years, the IMF has become more transparent and has sought to become more accountable, not only to the governments that own it, but also to the broader public.
The IMF has become committed to:
- Being transparent about its work. Dialogue with CSOs is an important channel for communication.
- Fostering a culture of listening and learning. CSOs can highlight important issues, offer information to supplement official data, and provide insights that may differ from perspectives in official circles.
- Strengthening country ownership of policies, which is essential to successful stabilization and reform. Constructive dialogue with CSOs can help to build mutual understanding and to increase support for reform.
4. so.. What is the IMF?
The International Monetary Fund—also known as the “IMF” or the “Fund”—was conceived at a United Nations conference convened in Bretton Woods, New Hampshire, U.S. in July 1944. The 45 governments represented at that conference sought to build a framework for economic cooperation that would avoid a repetition of the disastrous economic policies that had contributed to the Great Depression of the 1930s.
Headquartered in Washington DC, it is governed by and accountable to the governments of the 184 countries that make up its near-global membership
4.1 How the IMF Promotes Global Economic Stability
4.2 How the IMF Helps to Resolve Economic Crises
4.3 How the IMF Helps Poor Countries
4.4 Where the IMF Gets its Money
Most resources for IMF loans are provided by member countries, primarily through their payment of quotas. Concessional lending and debt relief for low-income countries are financed through separate contribution-based trust funds. The IMF's annual operating expenses are largely paid for by the difference between its interest receipts and its interest payments.
The quota system
Each member of the IMF is assigned a quota, based broadly on its relative size in the world economy, which determines its contribution to the IMF's financial resources. Upon joining the IMF, a country normally pays up to one-quarter of its quota in the form of widely accepted foreign currencies (such as the U.S. dollar, the euro, the yen, or the pound sterling) or Special Drawing Rights (SDRs). The remaining three-quarters is paid in the country's own currency.
Quotas are reviewed at least every five years. The quota review that was concluded in 1998 led to a 45 percent increase in IMF quotas to SDR 213 billion (about $308 billion as of end-March 2006). The review concluded in January 2003 resulted in no change in quotas.
Special Drawing Rights (SDR): What is it?
The SDR is an international reserve asset, created by the IMF in 1969 to supplement the existing official reserves of member countries. SDRs are allocated to member countries in proportion to their IMF quotas. The SDR also serves as the unit of account of the IMF and some other international organizations. Its value is based on a basket of key international currencies.
4.5 Singapore in relation to IMF
Singapore’s quota is 862.5 million SDR representing 0.40% of the total.
This translates to 8875 votes which is 0.41% of the total vote.
Our Governor on the board is Lim Hng Kiang and the alternate is Heng Swee Keat.
Link to IMF Members' Quotas and Voting Power, and IMF Board of Governors
5.The World Bank; What is it?
The World Bank is a vital source of financial and technical assistance to developing countries around the world. It helps governments in developing countries reduce poverty by providing them with money and technical expertise they need for a wide range of projects-such as education, health, infrastructure, communications, government reforms and many other purposes
5.1 What is the difference between the World Bank and the World Bank Group?
The term "World Bank" refers only to the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA). The term "World Bank Group" incorporates five closely associated entities that work collaboratively toward poverty reduction: the World Bank (IBRD and IDA), and three other agencies, the International Finance Corporation (IFC), the Multilateral Investment Guarantee Agency (MIGA) and the International Centre for Settlement of Investment Disputes (ICSID).
5.2 Who owns the World Bank & how does a country become a member?
The World Bank is like a cooperative in which a 184 member countries are shareholders. Under the Articles of Agreement of the International Bank for Reconstruction and Development (IBRD), a country must first join the International Monetary Fund (IMF) prior to becoming a member of the bank. Membership in IDA, IFC and MIGA is conditioned upon membership in IBRD. For more detailed information on procedures for membership and subscription in each organization, go to General Information.
(My comments: Understooded? Must join IMF before joining IBRD ( which is one of 2 banks constituting the "World Bank". Must join IBRD before joining IDA,IFC or MIGA which are parts of the larger World Bank Group! Got it?) So that's how IMF and WB are related to each other other than that most of the people sitting on these boards are probably the same ones flying in on the same private jets!
5.3 Who runs the World Bank? What are the Boards of Governors and Executive Directors, and how are they selected?
The Board of Executive Directors and the President of the World Bank—who serves as chairman of the board—are responsible for the conduct of the general operations of the bank, oversee the work of the bank on a daily basis, and perform their duties under powers delegated to them by the Board of Governors. The directors meet twice a week in Washington, DC, to approve new loans and review bank operations and policies.
The Board of Governors is made up of shareholders—184 member countries—who are the ultimate policy makers at the World Bank. Generally, the governors are member countries' ministers of finance or ministers of development. They meet once a year at the Annual Meetings of the Boards of Governors of the World Bank Group and the International Monetary Fund to set the overall policies of the institution, review country membership and perform other tasks. Because the governors only meet annually, they delegate specific duties to the 24 Executive Directors, who work on-site at the bank.
According to the Articles of Agreement, the five largest shareholders, France, Germany, Japan, the United Kingdom and the United States, each appoint an executive director, while other member countries are represented by 19 executive directors who represent constituencies in several countries. Each of the directors is elected by a country or group of countries every two years. It is customary for election rules to ensure that a wide geographical balance is maintained on the board.
5.4 Who is the president of the World Bank, and how is the president elected?
Paul Wolfowitz is the 10th president of the World Bank. He is chairman of the bank's board of executive directors and also president of the five interrelated organizations that make up the World Bank Group. By tradition, the bank president is a national of and is nominated by the executive director of the largest shareholder in the bank, the United States. The president is elected by the board of governors for a five-year, renewable term. By a long-standing, informal agreement, the president of the bank is a United States national, while the managing director of the International Monetary Fund is a European.
(My comments: Now we know why everyone is always sucking up to our American and European friends!!)
5.5 Where does the World Bank get its money?
The World Bank raises money in several different ways to support the low interest and no interest loans (credits) and grants that the World Bank (IBRD and IDA) offers to developing and poor countries.
IBRD lending to developing countries is primarily financed by selling AAA-rated bonds in the world's financial markets. IBRD bonds are purchased by a wide range of private and institutional investors in North America, Europe and Asia. While IBRD earns a small margin on this lending, the greater proportion of income comes from lending out its own capital. This capital consists of reserves built up over the years and money paid in from the bank's 184 member country shareholders. IBRD income also pays for World Bank operating expenses and has contributed to IDA and debt relief. The WB maintains strict financial discipline to maintain the AAA status of our bonds and continue to extend financing to developing countries.
Shareholder support is also very important for the bank. This is reflected in the capital backing it has received from shareholders in meeting their debt service obligations to IBRD. It also has US$178 billion in what is known as "callable capital," which could be drawn from its shareholders as backing, should it ever be needed to meet IBRD obligations for borrowings (bonds) or guarantees. It has never had to call on this resource.
IDA, the world's largest source of interest-free loans and grant assistance to the poorest countries, is replenished every three years by 40 donor countries. Additional funds are regenerated through repayments of loan principal on 35-to-40-year, no-interest loans, which are then available for re-lending. IDA accounts for nearly 40% of its lending.
Now that you are even more confused than before you started, at least when you bump into some lost-looking suit in Marina area this week, you can drop some names like Bretton Woods; the World Bank Group ( and NOT just the World Bank); and with a straight face discuss the merits of increasing the quotas and SDR's and yes, do mention that you will be playing a round of golf with good old "Wolfy" at the club!
Dr.Huang Shoou Chyuan
(PS: By the way, I think they should allow the protests, esply the ones with the chicks.. I mean the chickens)
2.International Monetary Fund