|Picture Credit: wikipedia.org
The World Bank, based in Washington, is a multilateral institution that lends money to governments and government agencies for development projects. For more than twenty years, the Bank has imposed stringent conditions, known as "Structural Adjustment Programs," on recipient countries, forcing them to adopt reforms such as deregulation of capital markets, privatization of state companies, and downsizing of public programs for social welfare. Privatization of water supplies, fees for public schools and hospitals, and privatization of public pensions are among the most controversial Bank reforms. While the Bank insists that "fighting poverty" is its first priority, many critics believe instead that it is responsible for rising poverty. Many also criticize its cozy relationship with Wall Street and the United States Treasury Department. The stormy resignation of World Bank Vice President and Chief Economist Joseph Stiglitz in late 1999, and his subsequent public comments, suggest that the Bank is not as benign as it claims to be.
Between 2009 and 2012, the World Bank spent billions of dollars funding coal-fired power stations in the global south. But coal stations are toxic to local environments, and are the cause of many health problems, including asthma and tuberculosis. In the US, pollution from coal stations has caused over 13,000 premature deaths, leading to domestic restrictions of their use. How will the World Bank’s new president, Dr. Jim Yong Kim, an expert in human health, address these controversies? (Global Policy in Brief)
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The World Bank’s Doing Business Report has been criticized by a global coalition of Civil Society Organizations to contain major methodological flaws. Such shortcomings threaten to undermine not only the report’s credibility but also the World Bank’s effectiveness in achieving its goals. Experts argue that a comprehensive overhaul of the existing indicators in the report will be necessary if it is still to serve as a useful instrument to assess the contribution of business to global development. Moreover, there is a need for the report to better align with moves towards a paradigm of greater country-owned and led development. Improved alignment will ensure that a country’s particular circumstances and political choices are not overlooked. (eurodad)
Following complaints from affected communities, a review of International Finance Corporation (IFC) lending practices reveals gaps in the mechanisms to oversee third-party lending institutions. IFC is the lending arm of the World Bank that currently channels approximately 40% of its lending portfolio for development projects through other banks or microfinance institutions. Although financial intermediaries are expected to comply with IFC’s standards, there is no due diligence for ensuring environmental and social “do no harm” practices are met, turning the process into a mere “box ticking exercise.” The IFC expects their sub-clients to keep records of their operations but feel that greater oversight at that level is unnecessary. IFCs impact on development is potentially extended through financial intermediaries; however success is hampered since 60% of IMF funded sub-clients fail to meet these safeguards. (IPS)
The 2011 ceasefire in Burma and the establishment of a new government have led to investments from the World Bank starting in 2012. The first round of funding targets community driven development projects that include conflict-affected communities. However, the Bank has ignored warnings from civil society groups concerned about the lack of inclusive consultations and impact assessments prior to project approvals. The Bank is now considering a $440million loan aimed at creating the “foundations for future economic growth”. This type of swift program implementation puts economic development ahead of political settlement in a region still sore from injustices experienced during decades of conflict. Rather than investing in government-led development projects, efforts on fostering political stability through transparent consultations with communities will ensure effective aid programs based on current needs. (Bretton Woods)
The World Bank has voted to approve funding for an electric transmission line that would link Kenya to the controversial Gilgel Gibe III dam in Ethiopia. The bank has previously refused to fund the dam itself due to lack of transparency. While the transmission line will greatly enhance the energy security in the region, the failure to address the accusations of abuse and environmental concerns may lower the credibility of the World Bank’s project. (IPS)
Published only days before the World Bank confirmed the appointment of the American candidate, Bretton Woods Project highlights four major issues that a credible new president should tackle. Next to putting an end to the rigged appointment process, the new president should steer away from its neoliberal, unaccountable and unrepresentative ways. A good place to start would be the containment and reform of the International Finance Corporation (IFC), the bank’s private sector arm. This institution is a major facilitator of land grabbing and one of several of the bank’s subsidiaries that is irreconcilable with any legitimate conception of development. (Guardian)
The fervent and ongoing speculation and debate as to who should become the new President of the World Bank has thrown up a number of candidates – most notably Ngozi Okonjo-Iweala who would become the first African, and the first female to lead the Bank. The Bank’s relationship with Africa has been marred by controversy. Many have seen it as detrimental to the continent. This All Africa article argues against electing an African as a sop to sentimentality, and instead urges a deeper skepticism of the Bank’s aims, methods, and future in Africa. (allAfrica)
In the past, the nomination and election of the World Bank’s President has been largely influenced and dominated by the US. However, CEPR Co-director Mark Weisbrot argues that this election process is undergoing meaningful changes. The nomination of Jeffrey Sachs opened the doors for the nomination of candidates other than “a [US] political insider or a banker.” The nomination of Nigerian Finance Minister Ngozi Okonjo-Iweala by several African countries, for instance, represents an unprecedented challenge to the US government’s traditional domination. Although these developments ought to be welcomed, the Bank’s process is still deeply flawed and the majority of the world’s countries are not yet involved. (Centre for Economic and Policy Research)
The WB is the only provider of global poverty figures. Despite the global financial crisis and surging food prices, the Bank’s latest estimates suggest that the percentage of people living on less than $1.25 a day declined between 2005 and 2010. The Bank’s data incorrectly signals that the first MDG of cutting global extreme poverty in half has been achieved. This Share the World’s Resources article critically examines the issues regarding the WB’s latest figures, stating that the WB regularly use faulty methodology to come up with statistics that support their longstanding view that “liberalization and globalization [help] to reduce poverty worldwide.” (Share the World’s Resources)
The World Bank’s country classification system divides member countries into low, lower middle, upper middle and high income countries. Whether a country is low income or middle income affects many things, such as eligibility for concessional lending from multilateral banks, donor aid policy and trade access. To determine a country’s status, the Bank exclusively uses income per capita. But does this system accurately capture a country’s state of socio-economic development? This Policy Innovation article presents the controversies surrounding the Bank’s classification system and maintains that “it produces results that do not reflect real-world situations.” Author Seth Kaplan proposes a more sophisticated and less arbitrary country classification system that is gradual and measures levels of development rather than levels of income. (Policy Innovations)
In this blog-post from Voices of the South, former executive director of the Argentinean Centre for Human Rights and Environment (CEDHA) Jorge Taillant illustrates with a witty analogy why it is so important for the future World Bank’s (WB) president to be from a developing country. In soccer, so Taillant states, “when your front runners simply aren’t cutting the mustard, the coach looks to the bench for new and energetic blood.” The WB urgently needs its own Lionel Messi to come off the bench and work development magic. (Voices of the South)
As soon as World Bank president Robert Zoellick announced that he would step down at the end of June, rumors abound on his succession. Taking into account the well-known and controversial "gentlemen's agreement," "giving" Europe the IMF and the US the World Bank, it is not unlikely that either Hillary Clinton or Lawrence Summers will get the job. Jayati Ghosh argues that this developed world privilege has never been so unjustifiable. Not only has the time in which the G7 "ran the world" gone by, but the "conflicts of interest"-argument stating that recipient countries should not run the agencies has also lost legitimacy, particularly when Lagarde assumed leadership at the IMF and became involved in Eurozone bailouts. It is time that the Bank is run by "the best candidate" who can count on support from the developing world. (Guardian)
In 1982, the western-backed military in Guatemala killed 440 civilians and displaced 32 communities along Rio Negro to make way for the Chixoy Hydroelectric Dam, a World Bank funded project. The World Bank continued to support the project despite knowledge of human rights abuses. It argued that its Articles of Agreement did not require consideration of human rights in its funding decisions. This Al Jazeera article examines what the World Bank must change during its safeguard review process in order to meet international law standards. (Al Jazeera)
The Department for International Development’s (DfID) latest review of its policy towards the World Bank (WB) expresses its accord with the bank’s ideology and practices. It ignores persistent fundamental flaws such as loan conditionality and the bank’s hierarchical decision-making structure. According to this article, if the bank’s idealistic mandate is ever to be fulfilled, it is time for the DfID to leave behind minor issues and concentrate on the bank’s major structural deficiencies. (Guardian)
The dollar’s role as the international reserve currency has been called into question by economists and policy makers as a result of the 2008 financial crisis which pushed the world into recession. This World Bank report believes that by 2015 emerging markets will account for half of global economic growth. The international economic order will necessitate a shift away from the dollar and towards other currencies for the purposes of trade. (Wall Street Journal)
The World Bank’s internal auditors have released a scathing report blasting the bank’s performance over the past decade in East Timor. The report critiques the bank for its unsatisfactory support of education and its strict adherence to procurement rules, which stalled the construction of health clinics that were badly needed. World Bank officials acknowledge that some polices were ill-advised. (New York Times)
The World Bank keeps investing in corporate water privatization. Through its funding arm, International Finance Corporation (IFC), it invested $139 million in Veolia Voda - the Eastern European branch of Veolia which is the world's largest private water corporation. Even though privatization of water "has been an epic failure in Latin America, Southeast Asia, North America, Africa and everywhere else it's been tried," the World Bank chooses to encourage the profit driven, short-sighted projects in Eastern Europe. By doing so, the World Bank and the IFC promotes water as a commodity even though the UN has declared it to be a basic human right. (AlterNet)
The World Bank claims to be willing to take strong action to stop investments in companies registered in tax havens. Yet it fails to make sure that the International Finance Corporation (IFC) stops supporting companies that operate in such areas, making the World Banks ambitions seem hollow. Each year more than $600 billion bleeds out of poor countries in tax evasions. As institutions mandated to support development of poor countries, both the World Bank and the IFC have the obligations to make sure their investments are not supporting economic leakages in afflicted countries. (Eurodad)
Considering the influence the World Bank possesses, its recently released report on land grabbing is in most ways a disappointment. It has the ability to access both governments and corporations in a way that journalists or NGOs never could, but yet the conclusion of the report lacks both edge and new information. The Bank claim originality, but "if the World Bank really wanted to lift the veil of secrecy [around land grabbing] it would start by putting legal documents in the public domain". Their fail in doing so clearly indicates the hidden agenda of the World Bank's own interests in private land investments. (Grain)
When discussing African growth, the World Bank prefer to use the concept of GDP instead of speaking of human development. When solely looking at the general African GDP, World Bank representatives claim that the continent is not getting poorer - on the contrary they claim the African GDP to be at a much higher level today than it was 15 years ago. But using the GDP automatically means excluding factors like environmental quality and how the capital is distributed amongst citizens. The World Bank cannot ignore the fact that in spite of capital intensive natural resource extractions, African economies continue to suffer extreme distortions and social inequality. (Pambazuka News)
The World Bank has announced a new voting structure that gives emerging economies like China, India, and Brazil a greater say in the decisions of the 186-nations institution. China was the biggest beneficiary as it is now the 3rd largest share-holder, behind the US and Japan, at 4 percent. The South African Finance Minister has expressed his disappointment in the restructuring, saying the results have diluted the voting power of sub-Saharan countries. Many question the Bank's claim that this new arrangement gives developing countries an enhanced share of voting rights at 47 percent. Most of those who have received increased voting power are emerging economies, near the upper tier of the global system, and increasingly close partners with the powers-that-be. (Al Jazeera)
The International Finance Corporation (IFC), the private sector lending arm of the World Bank, is in the final stages of crafting its Sustainability Policy and Performance Standards. The latest draft has removed certain language that was making progress on human rights and other critical issues. This article reveals major abuses in past IFC funded projects. More importantly, it highlights the need for stronger standards to protect people and the environment. (Bretton Woods Project)
Internal reforms with potentially far-reaching consequences are underway at the World Bank. The reform proposals were developed without public consultation and in a very short period of time, allowing only limited discussion with shareholder governments and stakeholders. Not surprisingly, the planned reforms reinforce existing bank approaches, particularly its focusing on financing infrastructure and the private sector. The Bank also intends to expand its role as a "knowledge provider" (do we really need more of the Bank's biased "knowledge?"). Among the most radical changes is a proposal to provide a new "risk framework," which supposedly will change the way the Bank selects and evaluates its investment projects. (The Bretton Woods Project)
World Bank President, Robert Zoellick, has made a strong statement on Haiti reconstruction and aid. But it remains to be seen what the Bank will actually do after years of negative influence on the islands economy. Zoellick highlights cash-for-work programs so Haitians can themselves be paid for reconstruction of their country. Debt-relief is also mentioned - Haiti is stifled by a debt burden of nearly $1 billion (The World Bank).
This review of the World Bank provides a critical assessment. In response to the global economic crises, Bank lending to middle-income countries increased while funds to lower income countries did not change at all, in spite of the difficulties these economies are facing. The review also assesses the Bank's role in gender empowerment as well as environment and climate change projects. (Heinrich Boell Foundation)
The World Bank Group has spent almost US$18 billion on health, nutrition and population projects in the past ten years. However, the Independent Evaluation Group has found little results from all this spending. In addition, the Bank's International Finance Corporation seeks the privatization of essential services in water, education and health - despite all criticism. This article discloses the doubtful investments and identifies risks for developing countries. (Bretton Woods Projects)
The conditions attached to World Bank's loans, including the requirement that governments cut public investment in agriculture have deepened the global food crisis. The World Bank has relied on privatization and deregulation for investment and growth in the agricultural sector. This has not helped small farmers, but instead made them unable to compete and to produce enough food to feed their own people. (Bloomberg)
World leader's proposal to reform the World Bank includes only small changes in the voting system and prevents major change in the Bank's governance structure. An alliance of developing countries and over 80 NGOs propose a reform of the World Bank based on the principle of "parity," which means equal voting share for borrower and non-borrower countries. (Bretton Woods Project)
This article argues that the World Bank's revised poverty estimate gives a rosy picture of reality. While the Bank has made some improvements, its calculations are neither reliable over time nor comparable between countries. Further, the new poverty line of US$1.25 per days is still too low. In the US – the base country of the Bank's estimate – a person would need far more than US$1.25 to afford a "minimally decent life." (Columbia University)
Revised poverty data from the World Bank reveal that previous figures underestimated the number of poor people by over 400 million. Now, the World Bank estimates that 1.4 billion people live under a new poverty line of US$1.25 a day. Even though the number of poor is 40 percent larger, this World Bank Press Release still claims that the revised data points to "big successes in the fight to overcome extreme poverty." Further, the new data show striking regional differences in development progress. In East Asia poverty has fallen from nearly 80 percent in 1981 to 18 percent in 2005, whereas poverty in Sub-Saharan Africa remains at 50 percent.
In this speech, World Bank President Robert Zoellick proposes a "New Deal for Global Food Policy," which should not only focus on malnutrition and access to food, but also take into account broader development issues. Zoellick says the World Bank could push for a "Green Revolution" in sub-Saharan Africa or boost investment in agribusinesses. His plans reflect an endless trust in global market solutions, without acknowledging how these forces may be responsible for the global food crisis the World Bank proposes to solve. (World Bank)
This Independent article reports that the World Bank vowed to halt deforestation in Bali last month, but is simultaneously funding the cattle ranching industry in the Amazon. This industry actually propels forest destruction, by cutting down large swaths of forest to make way for cattle. Research shows that the strain placed on the Amazon could wipe out the forest - the world's most important eco-system - by 2030.
Argentina, Brazil, Bolivia, Ecuador, Paraguay, Uruguay and Venezuela are all backing the initiative to establish the Bank of the South. The bank is an alternative to the World Bank and the IMF, whose unpopularity is growing in the South American continent. The founding countries say the bank will reduce their dependence on rich countries and international financial institutions while providing necessary alternative funds. Although experts approach the initiative with caution, some welcome the competition in the developing lending market. (BBC)
The World Bank seeks to play a key role in the UN climate conference in Bali. The Bank prides itself on being a "clearing house on carbon trading" and on being committed to reducing carbon emissions through specialized energy lending programs. Critics protest the Bank's involvement given the World Bank and IMF's subsidies to the oil industry and their lack of investment in renewable energy production. (Bretton Woods Project)
This report from EURODAD criticizes the effects of the World Bank's Good Practice Principles (GPP) on loan conditionalities for poor countries. Intended as a means to reduce conditionalities, the principles have only reduced non-legally binding conditions. The frequency of legally binding conditions remains the same. Further, the GPPs have done nothing to alter the World Bank's practice of forcing poor countries to deregulate their economies and open up their markets to competition from abroad.
As poor countries turn to other sources for credit, World Bank President Robert Zoellick seeks to reverse the Bank's current reputation as an almost irrelevant institution. With the slogan "Inclusive and sustainable globalization" Zoellick emphasizes the benefits to the US and Europe of free trade and cooperation with middle income countries such as China and India. He justifies collaboration as a means to better influence and control these economies so that their growth seems less threatening to richer countries. Critics wonder whether this is an appropriate objective for an institution that supposedly aids poor countries. (Wall Street Journal)
For decades, NGOs have criticized the World Bank for primarily representing the interests of rich countries and obstructing development in poor countries. This Harvard Business School paper argues that NGO campaigns have succeeded in bringing some accountability to the Bank. For example, citizens can now report World Bank violations of social and environmental safeguards to a complaint mechanism. But, the report calls the reforms "cosmetic" as the Bank has not reformed its core structures and policies.
Following the turmoil surrounding former World Bank chief Paul Wolfowitz and national budget problems, many rich countries have lowered their contributions to the Bank. Governments increasingly channel aid funds through their own development agencies, rather than through the International Development Association of the World Bank. World Bank chief Robert Zoellick maintains that the Bank is still an important financial institution and the only one that can "analyze overall needs, share information, set priorities and avoid duplications and contradictions in aid programs." But many governments question the future relevance of the Bank. (International Herald Tribune)
This article from the Inquirer gives a detailed analysis of the trends in international economic policy following the neo-liberal Washington Consensus. The discussion covers the World Bank's Poverty Reduction Strategy Papers, neo-liberalism and neo-structuralism. The article also looks at "global social democracy" as represented by economists Jeffrey Sachs and Joseph Stiglitz, a take on global economics that values equity before growth. Although this view is a radical departure from the original Washington Consensus, Sachs and Stiglitz still argue that economic globalization can bring benefits. The author argues that globalization as the most recent stage of capitalism is merely an attempt by capitalists to overcome their "crisis of overaccumulation, overproduction and stagnation," that does not benefit the poor countries.
The article presents an in-depth picture of the World Bank's pro-corporate and pro-capitalist mindset.A significant amount of World Bank funding goes to the private sector and large corporations. This happens at the expense of local, small scale entrepreneurs. Corporate demands for profit override the social and economic safeguards of local communities. Further, World Bank economic reform packages are designed to create corporate friendly governments to govern corporate friendly capitalist economies. (Focus on Trade)
According to documents recently made available to the public, the Bush administration repeatedly curtailed efforts by the World Bank to address the issue of global warming. The article argues that Paul Wolfowitz, the former President of the World Bank, got personally involved and removed the words "climate change" from a bank progress report and ordered the text to "shift the focus away from global warming." (Independent)
This Los Angeles Times article discusses how the World Bank disregards environmental matters such as climate change, due to the influence of its biggest supporter, the United States. Kristalina Georgieva, the World Bank's strategy and operations director for sustainable development, stated that the issue of climate change is politically very contentious and said that it will take at least two years before the World Bank includes carbon emissions into its decision-making process.
A World Bank report titled "Population Issues in the 21st Century: The Role of the World Bank" claims that the priorities of some least developed countries, of donor countries and of aid organizations are changing as fertility rates have decreased in many poor countries, and governments are placing more emphasis on economic issues over health issues. As a result there is a shortage of funds disbursed for matters such as "family planning, reproductive health programs and contraception." (allAfrica)
On May 22, 2007, after two months of negotiations, Argentina, Brazil, Bolivia, Paraguay, Ecuador, and Venezuela reached an agreement on Banco del Sur which will begin functioning in 2008. The members created the institution for two main reasons: to finance regional development projects in a more autonomous and efficient way than the US/EU-dominated World Bank and IMF and to couteract the effects of decades of deregulation and other neoliberal policies. So far, all parties have agreed to the equal voting rights but still have to decide on other issues of responsibility. Critics doubt that Banco del Sur will be able to single-handedly replace the international financial institutions. (World Press)
The relations between governments and multinational companies are quickly changing in Latin America. Countries like Bolivia and Venezuela are leaving the International Center for the Settlement of Investment Disputes (ICSID) as they believe it is not "transparent and impartial enough" due to the heavy influence of the World Bank and Washington. The World Bank has long used its supremacy to force governments to implement policies favored by transnational corporations at the expense of the poor. To change this situation, Bolivia raised its royalty rates on hydrocarbons leading to an increase in revenues while Venezuela raised the royalties on foreign investors making huge profits. (World Economy & Development In Brief)
Oxfam urges reform of the World Bank presidential appointment process, calling the resignation of former Bank President Paul Wolfowitz "a rare opportunity for change." The development agency argues that the next head of the Bank should be selected based on merit rather than unilaterally appointed by US President George W. Bush. The US government, however, shows little desire to change the status quo. (Guardian)
This YaleGlobal piece argues that the allegations of nepotism against World Bank President Paul Wolfowitz have exposed the underlying issue of "an outdated system of global governance" which grants disproportionate power to wealthy western nations. The US monopoly over leadership of the World Bank has muted criticism against Wolfowitz, as small countries dependent on the bank fear retaliation if they object, Europe looks to maintain control over the leadership of the IMF, and larger developing countries "seek quiet exit from the bank's grip."
An increasing number of Latin American countries – such as Venezuela, Ecuador, and Brazil – have paid off debts to the IMF and the World Bank in an effort to "break free" from the harsh conditionalities for debt relief imposed by the two institutions. Citing "doubts about the World Bank's credibility [and] legitimacy," Venezuela and Argentina have launched the "Banco del Sur," or Bank of the South, a more democratic and development-focused alternative where "voting power will be based on financial need" rather than economic or political power. (TomPaine)
This MercoPress article argues that the US and EU must "recognize the shift of economic power" toward Asia and Latin America or risk "forfeiting world economic leadership." The author warns that emerging economies will become increasingly frustrated with the US and European dominance over the World Bank and IMF and may create regional rivals. However, the article does not fully address the need for greater inclusion of poor countries into the power structures of the two institutions, a key issue for reform.
This Bank Information Centre article reveals that, in order to push for a resumption of its activities in Iraq, the World Bank tried to suppress the news that one of its employees was shot in the country. However, the World Bank is going against its own conditions for engagement which outline that the organization cannot operate in countries with ongoing conflicts and where staff cannot travel safely. The enormous attention given by the World Bank to Iraq in comparison to other countries suggests the president of the organization, Paul Wolfowitz, is using its role to promote US geopolitical interests.
World Bank President Paul Wolfowitz is trying to expand Bank-funded projects in Iraq and to use the organization's resources to achieve US military goals in the country. Most of the Bank's Board Members oppose this idea, which they say constitutes a waste of donor resources and a distortion of the Bank's mission. According to the founding articles of the World Bank Agreement, the organization cannot operate in countries with ongoing conflict. Further, the organization's staff is prohibited from traveling to Iraq for security reasons and this would make monitoring of the project very difficult in a highly corrupt environment. (Government Accountability Project)
Stating that "climate change is here and now," officials at the World Bank are hiring experts on adapting to global warming rather than preventing it. This Christian Science Monitor article reports that, although both tactics are necessary to prepare for climate change, many environmentalists view adaptation as the "poorer cousin" to carbon emission reductions.
This report published by Norwegian Church Aid, Danish Church Aid, Church of Sweden and Brot-fur-die-Welt finds that ever since African governments began liberalizing trade, food security has worsened on the continent. In particular, economic liberalization has harmed poor subsistence farmers. The author suggests that to achieve the Millennium Development Goal of halving hunger by 2015, the World Bank and local governments must abandon their present governance and liberalization policies.
Under the "central scenario" of the World Bank
's Global Economic Prospects 2007
world GDP will roughly double over the 2005-2030 period with developing country exports accounting for a significant share of the increase. While this growth could halve the number of people living on less than a dollar a day by 2030, the report also acknowledges that growing income inequalities and global warming could "jeopardize long-term progress." Along with reducing barriers to trade, the report calls for stronger international institutions to tackle the stresses on the 'global commons.' At the national level the Bank calls for government investments in education and infrastructure "to ensure that the poor are incorporated into the growth process."
This Bloomberg News piece reports on World Bank president Paul Wolfowitz' worrying praxis of staffing high-level positions in the Bank with individuals who are "short on expertise and long on political connections" to the US Republicans. New appointees replace 14 of the Bank's 29 highest-level executives who have resigned since the former US deputy defense secretary assumed the presidency in June 2005. Among them is the Bank's 30-year veteran vice president for the Middle East who stepped down after "resisting pressure to speed up the pace of lending and adding staff in Iraq." Concerns have now resurfaced that Wolfowitz serves "to provide political cover for the White House" in Iraq.
This Washington Post
piece reports on the 2006 'Annual Review of Development Effectiveness'
compiled by the World Bank's Independent Evaluation Group (IEG). While Bank management boasts about the World Bank's contribution to economic growth in developing countries, the IEG study stresses that in many countries growth has failed to reduce poverty because it has been very unevenly distributed, and also very volatile. The report criticizes Bank programs for failing to adapt to local conditions and for not considering the poor's vulnerability to price and currency liberalizations.
In September 2006, UK Secretary for International Development Hilary Benn announced that Britain would withhold £50 million worth of funding to the World Bank until the bank stopped imposing stringent demands of privatization and liberalization on poor countries. Times, London reports that Benn has now decided to release the money, saying that his concerns have been eased as the World Bank's November progress report showed positive results with "reducing the use of economic policy conditionality.'" Meanwhile NGOs call the decision "premature" and urge Britain to be tougher in next year's funding negotiations with the bank.
This Bretton Woods Project piece displays the increasing pressure on the World Bank to change the way it imposes economic policy conditions on poor countries receiving loans or grants from the Bank. In September 2006 the British government decided to withhold £50 million worth of funding to the Bank until it made "satisfactory progress" in improving its use of conditions. The Bank's own November 2006 progress report concludes that such progress has been achieved. Meanwhile NGOs around the world continue condemning World Bank conditionality. Also, the Norwegian government has gathered development officials from seven major donor countries "to discuss more appropriate and effective conditionality for the future."
As the world's largest center of development research, the World Bank's development economics vice-presidency (DEC) serves as a resource for academics, policymakers, and aid agencies. Although the DEC claims impartiality, this Bretton Woods Project article describes six ways in which the center promotes the "neo-liberal free-market paradigm," including manipulating data to support that paradigm and discouraging dissent.
Having himself been one of the main forces in putting corruption on the World Bank's agenda, Joseph E. Stiglitz in this piece makes recommendations for improving the bank's approach to combating corruption. Pointing out that bribe payments often come from Western based corporations, Stiglitz further calls on rich governments to tie tax deductibility for corporations to transparency in all dealings with foreign governments. Stiglitz also voices the concern of some critics that the corruption agenda is "itself corrupted" with rich governments using it to cut aid to countries that don't please them. (Project Syndicate)
The months preceding the September 2006 annual meetings of the Bretton Woods Institutions had seen "mounting tensions between [World Bank] president and the governments of its key donor countries." Governments worried that Bank president Paul Wolfowitz had pursued his anti-corruption strategy in an arbitrary and "high-handed fashion," suspending loans to several countries. This Times article reports that the issue caused embarrassment for Wolfowitz at the meetings. While approving his anti-corruption strategy, ministers insisted that the program needed continued oversight by World Bank member countries.
Focusing on youth, the 2007 annual World Bank
publication reports that the world population of people aged 12-24 has reached a record 1.3 billion, living mainly in poor countries. According to the report
, this "demographic dividend" creates a short "window of opportunity" for poor country governments to stimulate social and economic development, before this huge generation reaches middle-age. The report strongly emphasizes the importance of governments investing in better education, healthcare and job training thereby "expanding opportunities," "improving capabilities," and "offering second chances" to the young.
The British Department for International Development (DFID) will withhold £50 (US $95) million from the World Bank unless it stops demanding that poor countries privatize public services and liberalize trade as conditions for aid and loans. British NGOs would prefer DFID withhold all money to the Bank, rather than just a tiny fraction of the £1,3 (US $2,4) billion pledged over the next three years. But the NGOs welcome the move as a "partial victory" for their advocacy to have the British government put pressure on the World Bank to change its policy. (Inter Press Service)
Evaluating countries' economic, structural and public policies, the World Bank's Country Policy and Institutional Assessment (CPIA) plays a central role in the Bank's allocation of grants and low-interest loans to poor countries. This Bretton Woods Project article reveals how countries that fare well on the CPIA frequently have lower GDP growth, score lower on UN's Human Poverty Index, and perform worse on Transparency International's Corruption Perception Index, than countries with lower CPIA scores. This suggests that the Bank bases its ranking more on such criteria as ease of doing business than on an impartial assessment of countries' policies and institutions.
Examining the World Bank's 'Investment Framework for Clean Energy and Development,' nine non-governmental organizations reveal that the bank invests US$2-3 billion a year in greenhouse gas-producing fossil fuel projects, yet only five percent of its overall energy financing in renewable energy projects. The bank thereby fails "to reap the double dividend" of fighting both poverty and climate change with locally available renewable energy technologies. "Public funding for fossil fuels is a complete anachronism," and this report insists on a complete halt to the practice. Countries must redirect energy financing into renewable technologies through an "appropriate multilateral framework," and not the Western dominated World Bank. (Friends of the Earth)
The World Bank announced that it will merge its social and environment departments with its infrastructure department. The World Wildlife Fund applauds the plan, expecting large development projects to apply "world-class environmental standards." NGOs such as the Bretton Woods Project and the Bank Information Centre, on the other hand, warn that this move may relegate social and environmental concerns to the backseat in project planning. Environmentalists and independent analysts say they will closely follow the details of the reorganization. (Inter Press Service)
This article calls attention to the faults of the private sector lending arm of the World Bank, the International Finance Corporation (IFC). Although the IFC spouts rhetoric of "poverty reduction," it supplements already large and well funded projects for oil, gas and mining infrastructure to a far greater extent than it finances health and education projects. This 50 Years Is Enough Network piece calls for the elimination of initiatives that depend on the IFC and suggests that development projects should "focus on the community and its needs instead of profit and its dictates."
This letter to the trade ministers of the World Trade Organization on behalf of 131 organizations worldwide criticizes the Doha Round and suggests that more attention go to public policy priorities. Specifically, the letter finds fault with the undemocratic decision-making process among trade ministers and the overarching tendency to favor rich nations when imposing new trade laws. It proposes a new "aid for trade" plan that addresses adjustment costs and does not demand the liberalization planned under the Doha Round. (Our World Is Not for Sale)
US President George W. Bush's decision to nominate hawk Paul Wolfowitz for the position of President of the World Bank proved widely unpopular among international civil society organizations. While Wolfowitz has not enacted changes that further this discontent with his position, he has also not resolved the pressing problems at the World Bank. This Bretton Woods Project article suggests that Wolfowitz must actively pursue the elimination of corruption and debt and increase the autonomy that poor countries have over economic decisions in order to restore a meaningful role for the World Bank.
This Eurodad report critiques International Monetary Fund (IMF) and World Bank lending policies. The conditions that these institutions impose on already impoverished borrowers further the administrative and economic burdens of these governments. Eurodad suggests that the IMF and the World Bank reconsider the conditionality prerequisites for loan approval.
The International Monetary Fund (IMF) faces "a huge squeeze on the budget," and the World Bank approaches an even bigger crisis, INQ7 argues. Rich countries continue to dictate some of the Bank's most important decisions and poor countries increasingly turn elsewhere to obtain loans. After years of trying to reform the Bretton Woods institutions, some NGOs have changed their strategies and are now seeking to disempower the two institutions.
At the annual Spring Meeting of the International Monetary Fund (IMF) and the World Bank, the IMF's 184 member countries authorized proposals that will increase the influence of a few emerging economies, such as China and Turkey. However, the US will probably oppose any significant decrease of its 17% share in votes, since it benefits from being the Fund's only veto power. The World Bank discussed how poor countries could cope with the effects of climate change, produced by rich countries' industries. To cut their own greenhouse emissions, poor countries request financial support from the "polluters." (New York Times)
released by World Bank's Independent Evaluation Group (IEG) says that the Bank has not done enough to foster sustained export-growth and to tackle poverty in poor countries. While encouraging market liberalization, the Bank failed to address poor countries' vulnerability caused by their dependence on few export products. The report also encourages the Bank to consider the particular needs of every country in its recommendations. (Reuters)
After years of promoting market deregulation, the World Bank finally admits the limited effects of these policies on reducing poverty. According to a World Bank report, Latin America's high poverty and inequality can explain the region's bad economic performance over the last few years. The report encourages governments to assure a more equal income distribution. However, it remains unclear if the World Bank will back up its new thinking with real action. (Washington Post)
The image-driven anti corruption campaign of World Bank President Paul Wolfowitz has neither improved the transparency of the Bank, nor provided sufficient protection for internal whistleblowers. This article calls on the World Bank to publish a report on whistleblower protection grievances within the institution carried out by the Government Accountability Project. (Inter Press Service)