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Africa: Issues for the World Bank
AfricaFocus Bulletin
Apr 11, 2012 (120411)
(Reposted from sources cited below)
Editor's Note
Despite the tilted voting structure and the likely victory
of the candidate nominated by U.S. President Obama, the
contest for the new World Bank president, who will be chosen
next week by the World Bank board, has been the subject of
unprecedented open debate. Any of the three candidates
would, in different ways, break the mold of selection of a
white male American economist or foreign policy veteran.
But, of equal importance, and much less discussed, any of
the candidates would also head up an institution with a
contradictory mix of old practices and new ideas, despite
the demise of the market-fundamentalist "Washington
consensus."
The examples of contradictions between analysis by
specialists and the practice embodied in country loans and
advice are too numerous to mention. See, for example,
http://www.africafocus.org/docs10/ag1010a.php, on a sharply
critical World Bank report on land grabs in 2010, or the
current evaluation by the bank's own Independent Evaluation
Group on climate change (http://www.worldbank.org/ieg/climatechangeII/index.html),
which stresses energy efficiency and renewable energy
infrastructure in contrast to the high-profile World Bank
emphasis on carbon offset financing.
This AfricaFocus Bulletin contains three recent articles
from the Bretton Woods Project, focusing on current issues
on the World Bank agenda, including climate change and
gender. The regular updates from the Bretton Woods Project
(http://www.brettonwoodsproject.org/)provide a very useful
critical view of the World Bank and other international
financial institutions.
Another recent article criticizes the bank's estimates of
poverty as over-optimistic and "econocentric."
http://www.brettonwoodsproject.org/art-569952
Another AfricaFocus Bulletin published today, not sent out
by e-mail but available on the web at http://www.africafocus.org/docs12/wb1204b.php, features
excerpts from the new book by World Bank chief economist
Justin Yifu Lin, on the "New Structural Economics." Lin
argues that sustainable growth rates of over 8% are
attainable for many developing countries, including African
countries, if they strategically plan to move up the
industrial production chain as China moves into higher-wage
production areas.
The best place to follow the contest for the World Bank
presidency is http://www.worldbankpresident.org
Other sources on the World Bank presidency contest include:
"My call for an open, inclusive World Bank," By Jim Yong Kim
Financial Times, March 28, 2012
http://tinyurl.com/8yjxa6e
"What Should the World Bank Do?" by Jose Antonio Ocampo
Project Syndicate, April 4, 2012
http://tinyurl.com/7r353kp
"My vision for a World Bank that serves everyone,"
By Ngozi Okonjo-Iweala
Financial Times, April 9, 2012
http://tinyurl.com/74zg6of
Okonjo-Iweala and Ocampo appeared earlier this week at
events of the Center for Global Development in Washington,
for which webcasts are available at http://www.cgdev.org/content/article/detail/1426093/
Kim's "listening tour," which has taken him to Addis Ababa,
Beijing, Shaoxing, Tokyo, Seoul, New Delhi, Brussels,
Brasilia, and Mexico City, is covered in the U.S. "Treasury
Notes" blog (http://tinyurl.com/7vc8jsh). He goes to Moscow
after his interview with the World Bank board today.
For a good summary critique of the process, plus a succint
outline of substantive issues to be confronted, see
Peter Chowla in the Guardian for Apr 13, at
http://www.guardian.co.uk/commentisfree/2012/apr/13/world-bank-glimmer-possibility-change
For previous AfricaFocus issues on economic issues, visit
http://www.africafocus.org/econexp.php
Update
The authors of the Diagnostic Study of the Lord's Resistance
Army, which was excerpted in a March 14 issue of AfricaFocus
Bulletin have just published an article in the Journal of
Eastern African Studies with a military assessment of the
requirements for successful military action against the LRA,
incorporating elements of the assessment that were excluded
from the final Diagnostic Study for political reasons. They
conclude that "Given that unsuccessful military operations
against the rebels have typically resulted in LRA
retaliations against civilians, the paper urges caution in
pursuing such options and awareness of likely civilian
consequences. First, do no harm."
An abstract of the study, by Ronald R. Atkinson, Phil
Lancaster, Ledio Cakaj, and Guilaume Lacaille, is available
at http://www.tandfonline.com/doi/abs/10.1080/17531055.2012.669591
591. The full paper is available to people at institutions
subscribing to the journal, or by payment of a singlearticle
fee. The corresponding author may be contacted at
atkinson.uganda@gmail.com.
++++++++++++++++++++++end editor's note+++++++++++++++++
New World Bank president: what's on the agenda?
5 April 2012, Update 80
Bretton Woods Project
http://www.brettonwoodsproject.org/art-569964
An unprecedented competition for the Bank presidency, with
two experienced developing country candidates nominated in
addition to the US candidate, has raised demands for reform
of the Bank's approach to middle-income countries, human
rights, environmental issues and the private sector, among
others.
On 23 March the Bank board closed nominations for the
successor to Robert Zoellick, who had announced his
intention to stand down at the end of his first term in June
(see Update 79). Three candidates were put forward: the US
government nominated Dartmouth College president and
American national Jim Yong Kim; South Africa, Nigeria and
Angola nominated Nigerian finance minister Ngozi OkonjoIweala;
and Brazil nominated former Colombian finance
minister José Antonio Ocampo. Although American professor
Jeffrey Sachs, from Columbia University in the US, had
publicly campaigned for the job, he withdrew when Kim was
nominated.
Okonjo-Iweala and Ocampo have been finance ministers and
held senior management jobs in multilateral organisations,
Iweala as a former managing director of the World Bank, and
Ocampo as a UN under-secretary general. Kim was a department
head at the World Health Organisation.
This marks the first time there has been a contest for the
position, although the US act of nominating someone shows
their desire to cling to the long-standing unwritten
convention that the head of the Bank is always American. The
surprise nomination of Kim - who had not featured in prenomination
speculation - and the emergence of a three-way
competition strengthened campaigners' demands for a more
open selection process going forward. Elizabeth Stuart of
NGO Oxfam International said: "It is no longer tenable for
the US to anoint the World Bank's leader behind closed
doors. The Bank will undermine its legitimacy if this
interview process is a charade with a pre-determined
outcome. The three candidates should debate each other
publicly, so that when the selection is made, the world
knows why."
Reforms needed
Assessments of the three candidates have dominated media
discussions and created debate about key reforms needed at
the Bank. Academics and commentators agree that the next
president must bring focus to the Bank's sprawling range of
activities, the only question is how.
One of the most pressing issues is how to work effectively
with large emerging market countries. At a BRICS (Brazil,
Russia, India, China and South Africa) summit at end March,
the leaders called for "a multilateral institution that
truly reflects the vision of all its members, including the
governance structure that reflects current economic and
political reality." While governance reform is not strictly
in the power of the Bank president, the president can argue
for and demand changes in the alignment of power among
shareholders. And then, according to Roberto Bissio,
coordinator of NGO network Social Watch, "the Bank should
practice what it preaches and welcome some competition".
Instead of trying to co-opt any BRICS institutions (see
Update 80), the Bank "should not interfere with the
emergence of alternatives that would offer more choices to
its country clients."
While sorting out a bigger role for middle-income countries,
the next Bank president is also being called upon to protect
the rights of people affected by Bank projects. The Bank
currently does not recognise that it has a duty to respect
and protect human rights, generally categorising human
rights as 'political' rather than 'economic' or 'poverty'
related. Titi Soentoro of Indonesian NGO Aksi said, "if the
Bank is going to boost the role of middle-income countries
that must go hand-in-hand with strengthened environmental
and social safeguards."
The environment is one of the key battlegrounds for the next
administration, with past efforts to dub the Bank an
"environment bank" annoying civil society groups who have
long pointed to the damage done by Bank-funded projects, not
least because of its funding of fossil fuel power plants
while ignoring the needs of vulnerable people for energy
access (see Update 75). The Bank has consistently positioned
itself in international public policy-making as a protector
of global public goods, from climate change to biodiversity
(see Update 80). Red Constantino, the Philippines-based
coordinator of the BASIC South Initiative said: "The Bank
has no business generating global public goods when it can't
even get the basics of climate change right. It needs to
stop thinking markets, particularly carbon markets, are the
solution to all problems. It needs to step aside and leave
management of climate finance to more democratic
institutions like the UN."
Finally, while the past decade has seen a trend of the
Bank's direct finance to middle-income country governments
shrinking as a proportion of their total financing, there
has been a massive increase in the size of the Bank's
private sector operations through the International Finance
Corporation (IFC), where it is lending increasing amounts to
corporate operations in middle-income countries.
Additionally, the IFC is starting to adopt financial
structures used by Wall Street investment banks, with half
of its funding is now being routed through financial
intermediaries. The IFC is also the part of the Bank that
has been most criticised for facilitating 'land grabs' by
foreign investors looking to acquire agricultural land in
developing countries (see Update 78). Soren Ambrose of NGO
ActionAid International said: "The big risk is that the new
president will leave the IFC to its own devices instead of
trying to curtail its out of control practices. The IFC
needs a complete overhaul, from project selection, to staff
incentives and sectoral focus, so that it ceases being
corporate welfare and truly focuses on a development
mandate."
On a carbon market mission: The World Bank at the Durban
climate summit
|7 February 2012 Update 79
Bretton Woods Project
http://www.brettonwoodsproject.org/art-569554
While steaming ahead with new carbon market initiatives, the
World Bank attracted further criticism and suffered
potential setbacks on agriculture and on the Green Climate
Fund (GCF) at the UN climate negotiations in Durban.
As the UN's Framework Convention on Climate Change (UNFCCC)
summit opened in Durban in November last year, the Bank's
climate record came under renewed scrutiny. People from all
over the world joined the Global Day of Action and other
protests to voice their concerns about the Bank's
involvement in climate finance during the summit. A group of
civil society organisations, including the BASIC South
Initiative and the Sierra Club, launched the report Unclear
on the concept: How can the World Bank Group lead on climate
finance without an energy strategy? It argues that the Bank
should finally agree a low-carbon energy strategy that ends
funding for dirty energy and promotes access to clean
energy. The report states that, in the last four years,
nearly half of the Bank's energy lending went to fossil
fuels, and less than 10 per cent went to promote energy
access for the poor. It also notes the Bank's heavy
involvement in establishing and promoting carbon markets.
Weakened role in the GCF
A major outcome of the summit was the adoption of the GCF
(see Update 78, 76, 74). The Bank's role in the GCF has come
under criticism from developing countries and civil society
organisations. While the Bank will hold the interim trustee
position for the first three years, civil society groups,
such as Friends of the Earth, broadly welcomed that the
GFC's permanent trustee will be selected through an "open,
transparent and competitive bidding process", thus avoiding
making the World Bank the 'default' GCF trustee. A hard-won
victory for developing countries was the inclusion of a noobjection
procedure, which lets designated country
authorities put limits on the private sector's direct access
to GCF funding.
While the US pushed for the interim secretariat to be hosted
by the Bank, resistance from developing countries led to a
shared arrangement between the UNFCCC and the Bank-housed
Global Environment Facility (GEF, see Update 8). However,
many civil society groups did not think the agreement went
far enough. Lidy Nacpil of Jubilee South said: "the fund is
being hijacked by the rich countries, setting up the World
Bank as interim trustee and providing direct access to money
meant for developing countries to the private sector".
A new report released in December by UK NGO World
Development Movement questions the Bank's direct financing
for private entities in climate finance. Power to the
people? How World Bank financed wind farms fail communities
in Mexico claims that electricity produced under the Bankhoused
Clean Technology Fund (CTF) in Oaxaca, Mexico, will
not contribute to increased energy access among the state's
population who have no electricity. Instead, the electricity
will be sold at a discount rate to the world's largest
company, Walmart.
Still pushing for carbon markets
The Bank's push for forest and agricultural carbon markets
(see Update 77, 74, 73, 59) was confirmed by the launch of
the third tranche of the BioCarbon Fund during the summit,
set up to enable access to carbon markets for the least
developed countries with a focus on reforestation and
agriculture projects, such as REDD+ and soil carbon. The
Bank also launched the new Carbon Initiative for Development
to enable least developed countries to tap into carbon
markets through carbon-credit-generating projects (see
Update 78). The manager of the Bank's carbon finance unit
said: "If one thing was achieved in Durban, it is that
market mechanisms are very likely to be part of the future."
Furthermore, the IFC is pushing for private equity (see
Update 79) as an "untapped" climate finance source in a new
report. Accelerating the growth of climate related private
equity investment argues that private-equity and venturecapital
funds are "uniquely suited to financing climate
friendly investments," calling on multilateral financial
institutions to help accelerate their growth in emerging
markets.
During the summit, the Bank continued its efforts to drum up
support for "climate-smart agriculture", which includes a
controversial proposal to produce carbon credits from
storing carbon in the soil (see Update 78, 77). Concerned by
the Bank's activities, over 100 civil society groups,
including ActionAid and Kenyan organisation African
Biodiversity Network, signed up to a letter asking African
negotiators to reject soil carbon markets. Teresa Anderson
of the Gaia Foundation said "the World Bank's aggressive
push for a 'mitigation programme of work on agriculture'
[...] is a Trojan horse to bring in carbon offsets based on
farmers' soils. Soil carbon offsets will promote a new spate
of African land grabs, and put farmers under the control of
fickle carbon markets." This was echoed by Simon Mwamba of
the East African Small Scale Farmers' Federation, who said:
"Climate-smart agriculture is being presented as sustainable
agriculture - but the term is so broad that we fear it is a
front for promoting industrial, 'green revolution'
agriculture too, which traps farmers into cycles of debt and
poverty."
Despite the Bank's push, no work programme on agriculture
was agreed in Durban. However, a compromise text was reached
that requests the UNFCCC's scientific and technological
advisory body to consider issues related to agriculture at
its next session in May, meaning that agriculture is now on
the official UNFCCC agenda.
Reducing Emissions from Deforestation and forest Degradation
(REDD+, see Update 78, 76, 75) also continued to attract
critique and the outcomes of the negotiations, including
decisions on safeguards and financing, were met with
disappointment by indigenous peoples groups. A new coalition
formed during the summit, the Global Alliance of Indigenous
Peoples and Local Communities against REDD and for Life,
called for a moratorium on REDD+ until their concerns have
been addressed, arguing that their very existence is under
threat. Tom Goldtooth, Director of the Indigenous
Environmental Network, said: "At Durban, CDM and REDD carbon
and emission offset regimes were prioritised, not emission
reductions. All I saw was the UN, World Bank, industrialised
countries and private investors marketing solutions to
market pollution. [...] I fear that local communities could
increasingly become the victims of carbon cowboys, without
adequate and binding mechanisms to ensure that the rights of
indigenous peoples and local forested and agricultural
communities are respected."
World Bank's gender WDR: too little, too late?
|1 November 2011 Update 78
Bretton Woods Project
http://www.brettonwoodsproject.org/art-569233
The World Bank's flagship annual publication pushes gender
equality up to the Bank's agenda, but critics express
concern about its implementation and unwillingness to
consider gender a women's rights issue.
The World Development Report (WDR) 2012: Gender Equality and
Development - the first to focus on this issue - was
released in September. It documents progress in narrowing
gender gaps in education, health and labour in the past 25
years and maintains the Bank's past approach to gender as an
economic issue, stressing that greater gender equality "can
enhance productivity, improve development outcomes for the
next generation, and make institutions more representative."
This promotion of gender equality as "smart economics",
which started with the launch of the Bank's Gender Action
Plan (GAP) in 2007, has been criticised for failing to treat
gender under a women's rights framework (see Update 75, 74).
However, the WDR recognises that economic growth does not
always lead to gender equality. Female mortality, school
enrolment and earnings are some of the areas identified
where gender gaps are still most significant.
Rachel Moussié from NGO ActionAid International argues that
the WDR falls short in addressing what to do when gender
inequality persists despite economic growth: "Rather than
simply 'sticky' issues, these are fundamental areas of
resistance - which economic growth alone cannot address."
The WDR also does not recognise that women are
disproportionately represented in the informal economy and
that their workload increases during economic crises,
contradicting previous research findings that "the impact on
women is under-reported because their work in the home
remains invisible", according to Moussié. "With so little
information available, how can the Bank be sure that women
are not unduly affected?"
Shahra Razavi, of the United Nations Research Institute for
Social Development, said in an October paper the WDR was
ultimately a "missed opportunity". "By failing to engage
seriously with the gender biases of macroeconomic policy
agendas" and "reducing social policy to a narrow focus on
conditional cash transfers", she argues, "the report is
unable to provide a credible and even-handed analysis of the
challenges that confront gender equality - and appropriate
policy responses for creating more equal societies."
What implications?
During the the Bank's September annual meetings, its
ministerial level Development Committee endorsed a paper
detailing the implications of the WDR for the World Bank
Group and said it "look[s] forward to reviewing its
implementation in a year". Also, a road show of events to
disseminate the WDR around the world kicked off in October
and will continue in 2012. However, Elizabeth Arend of USbased
NGO Gender Action warned that "historically, WDRs have
had virtually no impact on actual Bank investments and
policies."
The implications paper says the WDR "provides a framework
that highlights the importance of household responses to the
functioning of markets and institutions' ”formal and
informal." It also lays out five directions to capitalise on
the WDR: informing country policy dialogue on gender
equality; enhancing country-level gender diagnostics;
scaling up lending for domestic priorities identified by WDR
2012; increasing the availability of gender-relevant data
and evidence; and leveraging partnerships, global and
country-level, to help implement priority actions.
But Marina Durano, of the international feminist network
Development Alternatives with Women for a New Era, pointed
out that it "does not mention whether gender equality
considerations will inform a reformulation of Bank
assessment tools used to determine lending allocation, such
as the Country Policy and Institutional Assessment [CPIA,
see Update 43], in order to ensure that Bank policies and
their macroeconomic policy advice support the gender
equality aspirations set out in the WDR". Moreover, Durano
said the implications paper does not explain how the Bank
will work alongside other institutions promoting gender
equality, such as the United Nations Human Rights Council
and the Convention on the Elimination of All Forms of
Discrimination against Women: "There is a big difference
between an approach to development that recognises gender
issues as human rights, and the Bank's approach to a world
without poverty that considers gender an economic issue. How
can we ensure that the Bank complements these approaches,
particularly when it has money to back up its 'advice'?".
A Four-Year Progress Report on GAP published by the Bank in
May claims that its "operations have become significantly
more gender-informed since the launch of the GAP", while the
implications paper states that, in the last five years, the
Bank "allocated more than $65 billion - to improve girls'
education, women's and mothers' health, and women's access
to credit, land, agricultural extension services, jobs and
infrastructure services." But Arend disputed the Bank's
commitments to gender, noting that its "'social development,
gender and social inclusion' investments have actually
decreased from $1.25 billion in 2007 to $952 million in
2010", or just 1.6 per cent of its $58.8 billion 2010
budget, according to the Bank's own 2010 annual report. A
July report from UN Women also criticised the Bank for
dedicating only $7.3 million to gender equality components
in public administration, law and justice projects between
2000 and 2010 - just 0.001 per cent of the total $874
billion in grants and loans allocated in the period.
Arend also highlighted the lack of indicators to measure
gender impacts in Bank's project appraisals, which makes it
"virtually impossible to determine whether Bank investments
actually improve gender equality." A September report by
Gender Action and Friends of the Earth International on the
Chad-Cameroon Oil Pipeline and the West Africa Gas Pipelines
exemplifies the severe gender impacts that Bank investments
can have in practice (see Update 72). Partially funded by
the World Bank, the pipelines did not have "pervasive gender
inequalities [taken] into account in project design." The
report found that they "increased women's poverty and
dependence on men; caused ecological degradation that
destroyed women's livelihoods; discriminated against women
in employment and compensation; excluded women in
consultation processes; and led to increased prostitution."
AfricaFocus Bulletin is an independent electronic
publication providing reposted commentary and analysis on
African issues, with a particular focus on U.S. and
international policies. AfricaFocus Bulletin is edited by
William Minter.
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