FOR IMMEDIATE RELEASE
Heads of Exclusive Global Institutions Call for “Inclusive Capitalism”
IMF Promises Consultation with Civil Society from Ecuador But Hosts Consultation in Washington D.C.
Washington, DC – Leaders from the world of finance and politics met in London this week at a conference on “Inclusive Capitalism.” The heads of the IMF and the Financial Stability Board (FSB) both called for more ethical behavior in the financial sector. IMF Managing Director, Christine Lagarde, declared that unethical behavior depletes “the treasury of trust” and “could again destabilize the global economy.” Mark Carney, FSB Chairman, offered similar remarks stating that “for markets to sustain their legitimacy, they need to be not only effective but also fair.”
Jo Marie Griesgraber, Director of New Rules for Global Finance – a DC-based NGO which promotes pro-poor reforms in finance, welcomed this message, but replied:
“Inclusive capitalism will require inclusive institutions to govern it. As it stands now, the global institutions responsible for governing the financial system – the IMF, FSB, G20 and OECD – remain exclusive. There have been limited improvements. Participation by non-G20 governments and civil society organizations in these institutions is grossly inadequate.”
A 2013 report assessing these institutions ranked the governance all these bodies 2.5 or less out of 4. The IMF reform process has become a symbol of the global economic governance problem. In addition, many global institutions struggle to adequately include public input into their consultations and decision making processes. Where there is public consultation, the private sector often crowds out public interest groups.
“The FSB does a great job of posting consultations and publishing the public responses, but we’ve found that more than 90 percent of responses are from the financial industry” added Dr. Griesgraber. “The IMF messaging on inclusion, inequality and redistribution is constructive. We look forward to seeing the evidence of its implementation.”
“Now the IMF needs to deliver on Lagarde’s words through its policy advice” said Matthew Martin, Director of Development Finance International. “If the IMF is serious about inclusive growth, it should be advising countries to introduce progressive tax policies that reduce income inequalities and create adequate space for social spending.”
Ecuador and Civil Society Participation
Today, the IMF announced that it will resume Article IV consultations with Ecuador. Deputy Managing Director of the Fund, Min Zhu, promised the IMF staff will engage with many representatives from civil society. However, the consultation period he announced will take place over the next few weeks in Washington DC. This will make participation of Ecuadorian civil society and smaller private sector representatives difficult, if not impossible.
While the IMF has had some success at including public input, it is evident that it continues to operate in a way that considers civil society engagement irrelevant or unnecessary.
Notes to Editor:
New Rules for Global Finance is a 501(3)c non-profit organization that promotes reforms in the rules and institutions that govern international finance; in order to support just, inclusive and sustainable economic development.
For more information, please visit www.new-rules.org.