Africa
World Bank as Santa Claus 

The Santa Claus image however deceives - time was running out on the agencies. It is almost 2001 and guarantees were for the year 2000. The debt relief thus is on track again, after heavy critics of World Bank and IMF inefficiency. 

One positive year 2000 trend can however be noted clearly in World Bank and IMF funding. There is now a clear trend of focussing on poverty. While the development strategies of the agencies earlier have been utterly conservative, typically focussing on low government spending and mostly funding great infrastructure projects, in year 2000 the development policies for the first time are more balanced between the conservative approach and the reformist approach of poverty reduction and empowerment of women and of the poor.

World Bank and IMF policies have not jumped from one extreme to another however, rather started including alternative development views in their strategies. Thus, good governance still is a precondition to obtain funding, but good governance now includes good poverty reduction programmes, environmental assessment and gender sensitivity. The message definitively has changed. The latest IMF reports are hung up on the word 'poverty'. 

Programmes also definitively have changed. The "enhanced Heavily Indebted Poor Countries (HIPC) Initiative" aims at reducing debt, but the debtor countries need "to demonstrate the capacity" to "implement a full-fledged poverty reduction strategy, which has been prepared with broad participation of civil society" (World Bank quote). The 27 (!) announcements of debt relief and credits by the World Bank the last week before Christmas also clearly demonstrate this trend.

In Nigeria, the World Bank thus announced its support to "community-based poverty reduction" this week. The agency approved a US$ 60 million credit that will help the Federal Government of Nigeria and local communities increase their capacity to work together in developing poverty reduction activities. "The Community Based Poverty Reduction project will improve access of the poor to social and economic infrastructure and increase the availability and management of development resources at the community level," according to a World Bank statement. "Capacity building" and "poverty reduction" are keywords in the agency's statement.

Equally, in Senegal the bank on the same day announced that it had approved a US$ 30 million credit for "social development". The credit goes to a Social Development Fund Project that will "build and strengthen the capacity of poor communities to design and manage development activities that have an impact on their welfare. It will strengthen the national capacity to collect and analyse poverty data and monitor poverty trends effectively," according to the World Bank. Keyword: "poverty reduction".

Mali and Djibouti this week received credits to strengthen the education sector - also an important "reformist" development strategy. The World Bank approved a US $45 million credit "to assist the government of Mali provide equitable access to higher quality education," in a ten year program. The programme is within in "empowerment school" as it is "designed to support the government's strategy of increasing gross primary enrollment from about 56 percent in 2000 to 95 percent in 2010, while improving learning levels." 

Equally, the US$ 10 million credit for an education programme in Djibouti is mainly focussing on poverty reduction. The credit goes to support Djibouti's educational development strategy. There will be direct "interventions to reduce poverty which will focus on reversing the extremely low enrollment rate in education," says a World Bank spokesperson.

The enhanced HIPC Initiative
The credits to Nigeria, Senegal, Mali and Djibouti clearly demonstrate the inclusion of "reformist" approaches in World Bank policies. After decades of criticism from development scientists and developing countries, this inclusion may seem as if the World Bank is turning into Santa Claus. However, the funding of these projects (a total of US$ 155 million for the four of them) is modest, compared to the so-called "enhanced HIPC Initiative". Malawi alone receives US$ 1 billion in debt service relief.

The "enhanced Heavily Indebted Poor Countries (HIPC) Initiative" is basically a continuation of the structural reform programmes of past decades. Needed debt relief is given to the world's poorest countries if they reform governance. The new approach within the old frames of structural reform is an extra emphasis on government poverty reduction programmes as one precondition to debt reduction.

On Thursday (21 December), the World Bank and the IMF announced a comprehensive debt-reduction package for Malawi under the enhanced HIPC Initiative. Total debt service relief from all of Malawi's creditors will be worth around US$ 1 billion. The conditions to receive the full amount of assistance under the initiative are twofold: the implementation of financial and economic reform and poverty reduction. 

"The improvement of public expenditure management and governance, through quarterly expenditure reporting on spending in high priority areas and through the separation of fiscal management and audit functions under new legislation" (World Bank) still remains a basic condition, as in the last millennium. But poverty reduction is not downplayed.

A comprehensive debt reduction package for Madagascar of US$ 1.5 billion is parallel reading. Structural reform (with another name, of course) and poverty reduction are the basic conditions. Also "Madagascar will receive the bulk of the assistance under the enhanced HIPC Initiative when it satisfies" these conditions, according to the World Bank.

Niger received US$ 890 million in debt service relief under the same initiative. It "reduces significantly Niger's annual debt service obligations, freeing about US$ 40 million per year over the coming years for expenditures on basic health care, primary education HIV/AIDS prevention, rural infrastructure and other programs geared at poverty reduction," according to the World Bank. 

Rwanda received US$ 810 million in debt service relief two days before Christmas. Especially in Rwanda, with its disastrous recent history, poverty reduction is central in World Bank and IMF conditions. 

Also The Gambia received US$ 91 million in debt service relief ten days ago, under parallel conditions. Guinea received US$ 800 million in debt service relief on 22 December. Guinea-Bissau received US$ 790 Million on 15 December. Outside Africa, likewise many countries (from Russia to Argentina and Viet Nam) received debt relief these same days.

After (finally) releasing all these resources, the World Bank and the IMF announced, with proud and some right, that "a milestone" had been achieved for the world's poorest countries. "In this millennium year, the [IMF and World Bank] have been determined to play their part in tackling one of the most pressing challenges of our time-helping the poorest members of the world community to share in the prosperity enjoyed by so many," the two leaders Horst Köhler and James D. Wolfensohn announced two days before Christmas Eve. Poverty reduction - it's not only right, it also feels good, it might seem. 

This Christmas, Mr. Köhler and Mr. Wolfensohn probably will celebrate with their famlies thinking they have done something good for the world. They have. But let's hope they also understand this is just a tiny beginning. Poverty reduction must be priority number one if real change is to be made. 

We are talking about real lives and real people. Millions. A billion? Living in utter poverty. Merry Christmas! 

By Rainer Chr. Hennig, afrol.com

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