Goldenberg Commission of Inquiry Report - Mars Group Kenya

Nations (UN) specialized agencies. The UN is made up of about 184
countries. These countries are jointly responsible as to how these two
institutions are financed and run. Each country, for instance, has a
quota as to how much it should contribute to the institutions. These
contributions depend on the strength of each country’s economy. The
quota also determines the voting rights of each country.
69. Although decisions of the two institutions on loans to its members
are supposed to be based on economic factors, over the years political
considerations have increasingly, albeit unofficially, had a bearing on
their decisions regarding lending to certain countries. For instance in
early 1990’s the decisions of IMF and World Bank were largely influenced
by the attitude of the USA towards Kenya. As we stated earlier its
ambassador to Kenya, Smith Hempstone, was highly critical of the
political policies of Kenya and his sentiments were supported by his
country. USA has the highest quota in the financing of both the
institutions. Its attitude to Kenya clearly shows that economic and
political factors cannot be separated in dealing with lending to individual
countries by the institutions.
70. Below is a short statement in the website
http:/1www.imf.org/external/pub/ft/exrp/what.htm at page 24 which
spells out the role of the two institutions.
“The World Bank and IMF make support available to
governments in the development of their strategies, but
without directing the outcome. World Bank and IMF
management realize that this requires a shift in the
organizational cultures and attitude both in these
organizations and in partner institutions. This shift is
taking place. By coordinating early and maintaining open
lines of communication with country authorities –
particularly by providing available diagnostic information –
the World Bank and IMF can ensure that they help
countries in a timely and comprehensive way.
Each institution must focus on its areas of expertise.
Thus, World Bank staff take the lead in advising on the
social policies involved in poverty reduction, including the
necessary diagnostic work. The IMF advises governments
in the areas of its traditional mandate, including