Responses: Owen Tudor - Head of EU and International Relations, Trades Union Congress (World Bank)

1.
It is premature to examine the impact of the measures taken by the World Bank, as the arrangements for some of the measures have not yet been put in place. The WB strategy hinges primarily on the success of its new facility - Vulnerability Finance Facility, under which it intends to provide assistance. The Bank has asked developed countries to make contributions – about 0.7% of the value of their stimulus packages to the Vulnerability Finance Facility. So far, the response has not been very encouraging. It is useful to ascertain the position of the UK Government in this regard. 
The Rapid Social Response Program (RSR) is to focus on social interventions facilitating access to basic social services and safety net programs. Targeting of pregnant women, lactating mothers and children for special attention and treatment is welcome. It is hoped that these programmes will be rolled out to more countries in future and the necessary resources will be secured through donors. The TUC appreciates that the British Government has pledged £200m to the programme.

2.
The World Bank and other international financial institutions, in the past, have not been very effective in communicating its policies, strategies and practices to its clients, especially to LICs. The conditionality attached to the use of WB facilities has often been a source of considerable confusion and led to hardships to poorer sections in society. Even after the recent reforms, there is still confusion on the significance and application of pre-conditions, conditions, prior actions, benchmarks etc. It is necessary for the Bank to improve its communication strategy and clarity in its relations with its clients in LICs – both governments and other agencies relying on its financial support. In this regard, we appreciate the new emphasis on transparency and predictability.

The crisis has had a disproportionately high impact on vulnerable and disadvantaged sections in society, especially women, older workers and people with disabilities.  The World Bank needs to encourage governments to put in place special programmes to identify their needs and address them. Some of the Programmes could be easily integrated into the existing schemes designed to promote equality, such as the Bank’s Gender Mainstreaming Strategy.

3.
The TUC is pleased with some of the recent reforms introduced to lighten the burden of conditionality. However, it is too early to assess their impact, as it will be some time before the reforms are bedded down and their effects felt in developing countries. While appreciating the need for accelerating processes, we take the view that it might also be necessary to consider disbursements on a case-by-case basis. Not all developing countries have the same absorptive capacity or the adequate administrative machinery to implement development programmes effectively at short notice. Some of the assistance needs to be used for building capacity through training and education in consultation with governments, trade unions and other civil society organisations.

Budget support should be considered an acceptable option, especially, for the Least Developed Countries. It could be stipulated that budget support be used for facilitating access to basic public services to the poor. 

The World Bank does not have an unblemished record in its collaboration with other development agencies, even with the IMF. The TUC, in this regard, notes that a number of recent reviews have emphasized the need for harmonisation and co-ordination. It is important that the WB implements its programmes in close collaboration with other development agencies and makes use of their knowledge, expertise and skills where appropriate.

4.
We believe that there is need and scope for the World Bank Group, especially, International Finance Co-operation, to provide support through the private sector to cushion the impact of the recession on developing countries. This could be achieved through financial support and advice to banks, other financial intermediaries and businesses to cope with the consequences of the economic and financial crisis. The TUC welcomes the IFC initiative to set up a Global Trade Liquidity Programme to finance international trade contracts in developing countries with a view to arresting the downward trend in trade flows. The IFC Global Trade Finance Programme has recently provided substantial assistance to Pakistani banks in crisis. The IFC needs to expand its support to other sectors in difficulty. It can also play a leading role in providing appropriate advice, especially to avoid job losses and attendant hardships to workers in companies in difficulty. However, there is little evidence as yet to suggest that the IFC has increased its interventions in response to the crisis on a scale commensurate with the magnitude of the current crisis.  

The Multilateral Investment Guarantee Agency (MIGA), too, should play a constructive role in collaboration with developing country governments in securing more foreign direct investments and also in preventing and/or minimising divestment due to the current unfavourable investment climate.
The TUC reiterates the need for the respect of core labour standards in all interventions by the World Bank Group in line with its commitments.