Today, the Development Committee, a joint ministerial committee of the boards of governors of the International Monetary Fund and the World Bank, issued a communiqué from its October 5 meeting in Istanbul, Turkey, the group’s second meeting of 2009. Yesterday, the IMF issued a similar communiqué in advance of the meeting.
The Development Committee emphasized the impact of the recent financial crisis on the developing world, noting that an additional 90 million people are at risk for extreme poverty. The Committee expressed concern that recent progress towards the Millennium Development Goals, set to be reached in 2015, is in danger of reversal. They also encouraged members to “avoid protectionist measures,” acknowledging that the “revival of world trade and investment will drive growth.”
The Committee lauded the World Bank Group, including the International Bank for Reconstruction and Development (IBRD) for nearly tripling its commitments this year to $33 billion. They also recognized the International Development Association (IDA) and the International Finance Corporation (IFC) for their contributions of $14 billion and $10.5 billion, respectively.
The IMF received praise from the committee for “the new SDR allocation, the more-than-doubling of the IMF’s medium term concessional lending capacity to $17 billion, the reform of IMF facilities for low-income countries, and the streamlining of IMF structural conditionality.” The Committee noted that IMF member countries are “delivering on promises to triple the IMF’s resources.”
The Committee committed to protecting spending on “health, education, social safety nets, infrastructure and agriculture” in low income countries, while “maintaining debt sustainability.” Accordingly, the Committee promised to provide the IDA with necessary resources. They also discussed the creation of a “crisis response mechanism” for low-income countries.
The Development Committee also “committed to pursue governance and operational effectiveness reform” to “ensure that the World Bank is relevant, effective, and legitimate.” They also promised to move towards “equitable voting power” with an increase of “at least 3% of voting power for development and transition countries.” This increase will supplement the previously promised 1.46% increase. The Committee expects to reach an agreement on voting before its April 25, 2010 meeting in Washington, D.C.