From poverty to power - Oxfam-Québec

5 THE INTERNATIONAL SYSTEM FINANCEwill be on the poorest people, before any major reform is recommended,is now official policy for both the Bank and the Fund – but too oftenthis analysis does not happen, or does not really influence the policythat the IFIs finally recommend or attach as a condition to a loan. 12While some progress has been made in reducing the overly specificand often damaging conditions attached to Bank loans, in the case ofPRSPs civil society organisations are consulted when it comes to ‘soft’items concerning public spending but are often not invited when thesubject turns to broader economic policy issues. For the first draft ofArmenia’s PRSP, for instance, a group of young economists from theEconomic Development Research Centre (EDRC), a civil societyorganisation, worked closely with the ministry of finance to set targetsfor reducing inequality as well as for increased growth. When thesecond draft was released in May 2003, these targets had been unceremoniouslydropped in favour of figures agreed with the IMF underthe PRGF agreement. 13An evaluation of the involvement with PRSPs of Oxfam’s civilsociety partners in 33 countries concluded that the design of theagreements was undermining both citizens’ organisations and theeffort to strengthen institutions such as parliaments and politicalparties. The report found that ‘consultation’ was a more appropriatedescription than ‘participation’ in almost all cases. Important stakeholders,both powerful ones such as elected politicians and powerlessones such as rural women, had rarely been involved; and donorsmaintained far too much control over policy content, employingconditionality and ‘backstage’ negotiation to the detriment of participationprocesses. 14When the World Bank surveyed poor-country government staff in2005, 50 per cent still felt that ‘the Bank introduced elements that werenot part of the country programme’, 15 and a 2006 study by theNorwegian government of IMF conditionality revealed that 23 out of40 poor countries still had privatisation and liberalisation conditionsattached to their IMF loans.There has also been some policy reform over the road at the IMF.In 2007, the Fund announced that it would be less conservative in itspolicy advice to low-income countries and would accept that theyneeded to spend in order to grow. However, while the Bank and the301