Event Summary by the Brookings Institution Office of Communications
September 9, 2003

Panelists at a Brookings press briefing this afternoon previewed upcoming World Bank and International Monetary Fund (IMF) meeting in Dubai and the World Trade Organization (WTO) ministerial conference in Cancun.

Brookings Senior Fellow Lael Brainard called the gatherings "two of the most important pow-wows of international economic ministers." The World Bank and IMF session is scheduled for Sept. 20-22, and the WTO ministers meet Sept. 10-14.

"It'll be very hard to get concrete results," said Brainard, recalling the last IMF meeting at Doha. "Very little concrete progress has been made?There has only been missed deadlines and no progress on the centerpiece of agriculture."

Brainard was referring to the issue of agricultural subsidies and their effect on the international economy, particular by developing nations.

"The big items [on the agenda] are the subsidies that are paid by rich countries to their farmers," said Brainard. She pointed out that "each cow in the European Union receives more in government subsidies a day than half of the world's population."

Michael Kremer, a senior fellow at Brookings, discussed the World Development Report, which the World Bank plans to release on Sept. 22.

"There are lots of problems in social service provisions in developing countries," said Kremer. He cited absenteeism among teachers in education and health-care employees in developing countries. Kremer, who contributed to the report, said that during a random visit in India, 23% of the teachers at one school were absent, as were 43% of health workers at a nearby hospital. Similar absentee rates could also be found in Indonesia and Uganda, Kremer said.

"A theme running through [the report] is that we really don't know in what ways to deliver social services and we need to learn more about what works?The systems are messed up and more money is needed. The ideal situation, which the report points out, is to have some sort of compact where the money is provided but is only provided to governments which are willing to reform those systems."

Senior Fellow Ralph Bryant made the case for "the importance of collective surveillance in national governments policies."

"It is the single most promising way for national governments-and the world as a whole-to foster prosperity management, meaning both preventing crises and promoting a healthy evolution of the world economy," Bryant said.

Guest Scholar Lex Rieffel and Visiting Fellow Andrew Powell discussed the role of the IMF with in Argentina, which defaulted on its debts in 2002.

"Argentina wants to have a growing and strong economy, and it will be easier if it has access to global capital markets," said Rieffel.

In order to begin restoring Argentina's economy, said Rieffel, "the government of Argentina must produce a credible economic reform program. It reflects an effort to get its own house in order."

Powell also urged a deliberate approach. "I think that there is still a lot of creative thinking required in terms of the international financial architecture needed to understand exactly what the position of the IMF is in terms of dealing with countries whose economies suffer."

The issue of the United States and Iraq figured prominently in this discussion, and panelists predicted that the same would be true at the upcoming international conferences.

"The U.S. foreign aid budget and the most recent request to Congress for $87 billion?puts a real squeeze on other areas. Will the U.S. be able to fulfill its promises in other areas, like HIV/AIDS and the Millennium Challenge Account? Very unlikely," said Lael Brainard.

Ralph Bryant criticized the narrow outlook of the United States. "The United States should eschew a sort of self-serving national attitude and espouse a self-reflective and enlightened perspective," he said. "It is the U.S. and other powerful nations that have the greatest stake in the healthy evolution of the world financial situation."

Lex Rieffel said Iraqi debts would be a likely topic at the upcoming meetings. "Should most or all Iraqi debts be forgiven? My answer is no?But the outcome of debt restructuring is not in doubt: There will be a substantial-even huge-reduction of debt, because the capacity of the Iraq economy will be severely limited for years to come."

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