Follow Us:

After having participated in the Annual Summit of the International Monetary Fund and the World Bank, I summarized my takeaways as a personal reflection exercise.
My conclusions might be of interest to you.

First of all, the people of Bali were great hosts, making an equally pleasant and productive stay possible with a smile.


# Integrative Character of the Annual Summit

The civil society protests in parallel to the Annual Summits in Washington during the 2000s were a painful expression of how non-inclusive both institutions have acted back then. Under the leadership of Dominique Strauss-Kahn, the IMF accelerated its transformation by increasing its transparency and accountability towards internal and external stakeholders.

By now, the civil society is prominently represented during the CSO seminars, which became an integral part of the summit. The language used, the actions proposed and the urgency claimed throughout the whole summit would have been impossible a few years back. It is, as if the whole IMF-WB summit turned into a CSO-inspired event. An important step forward.

Both, the IMF and the World Bank transformed into a platform that generates evidence on constructive and destructive causal drivers of globalization, multilateralism and the distribution of wealth. They are contributing to the creation of a new “language” (terminologies, definitions, taxonomies) that is needed to assess the violated societal reciprocity within the global village. That significant shift in focus deserves acknowledgement.

# Independence & Accountability

During the 2017 annual summit, both institutions were searching for orientation on how to deal with an unfit POTUS in the White House. By the time of this annual summit, clarity has been gained: full-throttle ahead towards multilaterally tackling urgent and relevant matters of global scale. This clarity implies tangible emancipation from the US, a country that has used the Bretton Woods institutions for its geo-strategic interests in the past.

This is a step away from the US and towards the representation of universal values in a multilateral world. What remains unanswered is how to manifest equidistance to the geo-strategic agenda of rising superpowers like China in a multipolar world, while increasingly including them for necessary activities to meet the objectives of a multilateral agenda.

In short, under the leadership of Jim Yong Kim and Christine Lagarde, the World Bank and the IMF transformed into contributing, reflective institutions, serving an agenda for the greater good. Exemplarily, the IEO (Independent Evaluation Office) can be named. Installed almost 20y ago to assess the efficiency and effectiveness of IMF missions, the IEO under Charles Collyns just recently turned into an effective, sometimes painfully effective, challenger stone of the IMF.

If national governments were held as diligently accountable and were as outspoken in their reflections of successes and failures, multilateralism would be easier – more transparent and reliable – to coordinate. Separating the global village through national borders is an increasingly outdated, dysfunctional form of how to govern 7.5 billion people.

# Human Capital Crisis

The narrative for all the challenges the IMF, World Bank and their associated institutions intend to tackle has been coined as „human capital crisis“. It is most prominently summarized in the new World Development Report 2019 (WDR) that shows the way from multilateral agenda setting to progressive universalism.
The 1% is fighting for immortality, the 99% are fighting for survival. A recent OXFAM study concluded that ca 82% of all wealth created in 2017 went to the top 1%. Three WDR conclusions:

The increasing importance of human capital and lifelong learning
The need for expanding social protection globally, by enhancing systems to make it available to everybody, covering formal and informal labor markets
The need for revenue mobilization and redistribution to finance the above. Fiscal space could be found i.e. through higher taxes on sugar and tobacco, carbon taxes, etc.

# Digital Literacy and Oligopolies

The challenge between meaning well and doing well in order to tackle the human capital crisis can be exemplarily shown by the summit seminar of the Indonesian Minister of Information Technology and the Managing Partner of PwC for the region. Their introduced working hypothesis: increasing the digital literacy of Indonesians will help closing the rising inequality gap in the country. PwC supports the government with the digitalization of further parts of the society, initiating co-operations with platform companies like Tencent et al. Keywords like disruptive technology, innovation, deregulation, digital education were being used.

The unaddressed issue: as long as level playing field for the platform economy is not established locally and globally, the winner takes all logic continues to apply. Thus, PwC actually supports the Indonesian government to further facilitate inequality as the rising bottom runs on lower upwards dynamics than the top. I highlighted that during the open debate to the minister. Disbelief was the response. After the event, the PwC MP came to me, agreeing with my assessment, implicitly saying that commercial interest prevail. An unethical point of view.

Indonesia is just one example. We see the same happening in Africa. The new Worldbank VP for Africa calls for a moonshot project to digitalize the continent (access to internet for all, online bank account for all, etc.).

Supranational action is required to establish a global anti-trust regime. As long as this is not happening, any local digitalization initiative is further „feeding the beast“.

There is more to say about the lively debate on a supranational regulatory framework and global Fintech sandboxes, but we spare that for another time.

Please share your point of view and enter the debate.