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World Without World Bank
Action Week India – 5th to 9th April 2021
The World Bank and IMF are having their Spring Meetings(virtual) from the 5th to 9th April , 2021 where these institutions will go ahead and laud themselves for the achievement of dolling out billions of dollars for supporting economies through the pandemic. Through these loans it is defining development and reshaping policies and economies. In India, from support for privatisation of the banking sector to support for the new farm laws, electricity reforms, privatisation of coasts and sea, the IMF and the World Bank have been very clear on the neoliberal reform agenda.
Why: It is important as civil society, we respond and expose the Bank’s hidden agendas and lack of interest in inclusive and sustainable development for marginalised communities. The Bank is organising its Spring Meetings(virtual) from the 5th to 9th April, 2021.
What: As a sign of protest to the World Bank’s policies, interventions, and impacts on economies, Indian groups under the aegis of Working Group on IFIs (WGoIFIs.net) is organising a week of protest “World Without World Bank- Action Week” from 5th to 9th April, 2021 .”
How: As a part of the week long protest, we plan to collectively organise social media campaigns, webinars, release press statements, through the week focussing on the World Bank’s role in impacting policies, development agenda, governance structures in general, on different sectors and impacts on people.
What can you do:
Tweet with relevant hashtags according to the theme of each day. The hashtags would be shared soon.
Post short videos on Twitter and other Social Media in English, Hindi and regional languages and share with us so that we can amplify the voices.
Post articles/blogs/opinion pieces on the issue.
Issue Press Statements in regional/local media.
Organize Online Meetings/Webinars in your groups and networks.
Share Cartoons, Posters, Photos of Protest Against the World Bank (even earlier ones will do).
Please do share any resource materials/press statements/event information with us so that we can amplify them. You can send them via email at email@example.com
Themes of the day:
5th April 2021
World Bank reform agenda : Agricultural Reforms
6th April 2021
Support to Campaign to stop doing business report
7th April, 2021
Privatisation of rivers, coasts & sea
8th April, 2021
Energy sector reforms and role of IFIs
9th April, 2021
More details will follow.
Action Week on World Bank Brings Together Social & Political Activists, Probing their Past and Demanding Accountability
Press Release | October 16, 2020
New Delhi: A key message reverberating in the week long protest action was that a World Without World Bank is possible. Participated by people’s movements, civil society groups, senior political and social activists and concerned citizens, the week witnessed multiple actions, within the limitations imposed upon by the pandemic.
The Action Week from October 12-16, under aegis of Working Group on International Financial Institutions (WGonIFIs) was observed by online meetings, webinars and using social media to look into the past performance of the World Bank in critical sectors, which impacted the economy as a whole, and in particular, people, their livelihoods and environment. The purpose behind the protest week was to expose the Bank’s hidden agendas to push neo-liberalization and a lack of focus on either inclusive or sustainable support for the countries and people battling marginalisation.
The week-long protest saw senior political and social activists and concerned citizens voice their concerns regarding the manner in which the World Bank has been pushing for a policy reform agenda changing the Indian economy and polity against the interests, rights and basic needs of the common citizens. In a video message eminent activist Medha Patkar stated “World Bank is undemocratically influencing our policies, impacting our sovereignty and violating our constitution.” She further stated that “We can live without the World bank. The World without the World Bank can certainly be taking the alternative path, which we all are compelled to think about after COVID-19 and all calamities based on climate change.”
Many other activists, academicians and trade unionists voiced their concern over the manner in which the Bretton Woods Institutions have been pushing for privatisation in public services, dilution of environmental and labour laws, exploitation of natural resources in the name of Development , which have been detrimental to the interests of the marginalised. The other voices included Goldman Environmental Prize winner Prafulla Samantara, noted environmentalist Vandana Shiva, Afsar Jafri of GRAIN, CPI(M) Central Committee Member Vijoo Krishnan, Amulya Nidhi of Jan Swasthya Abhiyaan (JSA), Leo Saldanha of Environmental Support Group (ESG), Right Livelihood Award winner Sandeep Pandey, Former General Secretary of All India Bank Officers’ Confederation (AIBOC) Com. Thomas Franco; Madhuresh Kumar of National Alliance of People’s Movement (NAPM), General Secretary of Bank Employees Federation of India (Tamil Nadu) C.P. Krishnan, Joint Secretary of All India Bank Employees Association (AIBEA) Com. Devidas Tuljapurkar, Maju Varghese of Centre for Financial Accountability (CFA), General Secretary of the All India Trade Union Congress (AITUC) Com. Amarjeet Kaur, environmentalist Ashish Kothari, President of Nagpur Municipal Corporation Employees Union Jammu Anand, Sreedhar Ramamurthi of Environics Trust, Vimal Bhai of Matu Jan Sangathan, Patron of All India Power Engineers Federation (AIPEF) K. Ashok Rao, Rajkumar Sinha of Chutka Parmanu Virodhi Sagarsh Samiti, Ashok Shrimali of Mines Mineral & People (MMP), energy expert Soumya Dutta and others who spoke about the impact of World Bank investments and reform agenda on agriculture, energy, environment, banking, health care sectors and on labour rights.
As part of the week long action, two international webinars were organized “IMF-World Bank: Did the Reform Agenda Get A Booster? – Experiences Globally” and “World Bank’s role in creating Smart Cities and it’s Socio political Impacts in Developing Countries- Voices from the South and Covid- 19” on the 13th and 15th of October, 2020. These webinars brought together speakers from the Netherlands, Philippines, Indonesia, Hong Kong, Bangladesh and India. Researchers, civil society members from across the world participated in the webinars, which especially brought together the voices from the global south, coming together to discuss the commonalities of experiences vis-a-vis World Bank investments and policy push.
In the webinar on COVID-19 speakers Nezir Saini from Recourse based in Netherlands, Hasan Mehedi from Coastal Livelihood and Environmental Action Network (CLEAN), Bangladesh and Anuradha Munshi from Centre for Financial Accountability (CFA) agreed on the concerns regarding the increasing external debt situation as the support from these institutions are in form of loans. IMF and World Bank funding for COVID-19 in developing countries is attached to policy reforms which will affect the social and health sectors and encourage private players. This would be disastrous when the need for good public health infrastructure and care is more than ever before.
In the webinar on Smart Cities speakers Jelson Garcia, an Independent researcher from Philippines, Elisa Sutanudjaja from Rujak Center for Urban Studies, Indonesia, Prof. Kris Hartley from The Education University of Hong Kong, and Gaurav Dwivedi, Centre for Financial Accountability agreed that the World Bank’s push for large and smart infrastructure has disempowered the already marginalised communities and pushed them to peripheries, destroyed traditional livelihoods, undermined the local governance bodies like municipal corporations and is creating parallel governance structures and pushing for privatisation of public services through PPP model, etc.
The movements and CSOs vowed to intensify monitoring World Bank and other international financial institutions and their agenda, negatively impacting India and its economy.
Recording of Webinar :
- World Bank’s Role In Creating Smart Cities And It’s Socio Political Impacts In Developing Countries – Voices from the South: https://www.facebook.com/wgonifis/videos/912890472453195/
- “Covid-19 and IMF-World Bank: Did the Reform Agenda Get A Booster? – Experiences Globally”: https://www.facebook.com/watch/?v=255382015914969
The Video messages of Medha Patkar, Prafulla Samantara, Vandana Shiva and others can be accessed here: https://wgonifis.net/videoswwwb/
Issued by Working Group on International Financial Institutions (WGonIFIs).
Anuradha Munshi – firstname.lastname@example.org / 9792411555
Nishank – email@example.com / 9910137929
Working Group on International Finance Institutions (WGonIFIs) is a collective of organisations and individuals in India to critically look at and evaluate the policies, programmes and investments of various International Finance Institutions (IFIs), and joining the celebration of the people and communities across the world in resisting them.
Action Week -India; 12th to 16th October, 2020
The World Bank Group (WBG) continues to be the lead Multilateral Development Bank defining development and reshaping policies and economies to fit the neo liberal agenda. COVID-19 has provided the Bank a window to reinvent its relevance through support to countries in fighting the pandemic. This support is coming through development policy loans which are silently pushing for policy reforms. The Bank’s now tainted and halted for fudging of data, Ease of Doing Business report has played a devastating role in watering down environmental and labour laws in India. The Bank’s World development Report for 2021, which sets forth the interest and direction of its investments, points towards commodification of data.
The World Bank continues to grow its influence in India through state partnerships impacting local governance structures. They continue to venture into new and what seem to be more lucrative territories promoting privatisation and commodification of data, coastal regions, large renewables, large infrastructure, agriculture, health with little regard to impacts on communities, their rights over resources and to human rights. With the approach of maximising finance for development, there is a deeper connection of DFIs with private financial entities making finance more complex and difficult to trace.
It is important as civil society, we respond and expose the Bank’s hidden agendas and lack of interest in inclusive and sustainable development for marginalised communities. The Bank organising its Annual general Meetings(virtual) from the 12th to 18th of October, 2020.
As a sign of protest to the Bank’s policies and interventions and impacts on economies Working Group on IFIs is organising a week of protest “World Without World Bank- Action Week- India” from 12th October to 16th October.
Program (12th -16th October, 2020)
12th October, 2020-
- World Bank Reform agenda (social media campaign)
- Agricultural Reforms (Social media campaign)
13th October, 2020-
- Health Sector, (Social media campaign)
- COVID-19 Response (Social media campaign)
- Webinar on “Covid-19 and IMF-World Bank: Did the Reform Agenda Get A Booster? – Experiences Globally”
14th October, 2020-
- Public Sector Banking Reforms – (Social media campaign)
15th October, 2020 –
- Ease of Doing Business, (Social media campaign)
- labour sector Reforms (Social media campaign)
- Webinar on “World Bank’s role in creating Smart Cities and it’s Socio political Impacts in Developing Countries- Voices from the South”
16th October, 2020-
- Energy Sector Reforms (Social media campaign)
More details will follow.
Indian groups reject World Bank’s concept note for World Development Report 2021: “Data for better Lives”
The annual World Development Report (WDR) is a flagship publication of the World Bank. The 2021 WDR report is in the process of being drafted and is titled “Data for Better Lives”. The Bank has shared the concept note for the Report for comments. As per the concept note, the World Development Report 2021 will look into role of data for development, current data landscape and the opportunities of integrating public and private data and new institutional frameworks to manage a range of regulatory, policy and governance challenges in this context. 49 Indian civil Society organizations wrote to the Bank rejecting the concept note and the intent behind the concept note in which data is identified and presented as a commodity. The concept note is deeply problematic at many levels: it disregards the rights of people over their data and is based on flawed assumptions that have no basis in reality.
The Concept Note, Data for Better Lives outlines a framework that enables corporations and the state to profit and advance their particular interests under the guise of public interest, poverty reduction and bettering the lives of people. Data that is built from information about the everyday lives of people will become one of the new engines for economic growth. The document is neither rooted in experiences of communities nor based on any evidence.It’s unfortunate that the approach of this concept note is limited to business for private companies for which certain power needs to be given to the state and paternalism to the poor. The more significant issues of state coercion, protection of people’s rights over their data and information is in the peripheral in this document.
Over the years increasingly institutions like World Bank and other MDBs have started using post-disaster situations and climate change as an opportunity to bring in policy reforms. Post disaster rehabilitation and recovery programmes provide institutions an easy entry with little resistance to the massive policy reforms that come along. Also, the language of resilience and sustainability is built into the narrative, which find very little resistance. Institutions like the WB are taking multiple roles of assessment, planning, financing project through development policy loans and monitoring specially in cases of disasters. It is a classic case centralization of powers. World Banks language of resilience, sustainability and post disaster recovery needs to be decoded. With increase in natural disasters in this decade and with climate change realities, disaster capitalism has also become a reality.
In an article on “The Rise of Disaster Capitalism” in the Nation Naomi Klein points out, “governments will usually do whatever it takes to get aid dollars–even if it means racking up huge debts and agreeing to sweeping policy reforms. But shattered countries are attractive to the World Bank for another reason: They take orders well. After a cataclysmic event, governments will usually do whatever it takes to get aid dollars–even if it means racking up huge debts and agreeing to sweeping policy reforms. And with the local population struggling to find shelter and food, political organizing against privatization can seem like an unimaginable luxury.1”
In the recent years India has witnessed an increase in climate disasters and the World Bank has used every opportunity to bring in the post recovery and rehabilitation projects, which come along with policy reforms. Post 2013 till now, India has witnessed some major disasters. The responsiveness of the Bank to these disasters has been of an opportunity for implementing economic and governance reforms under the garb of disaster preparedness, rebuilding and building resilient infrastructure. The Uttarakhand floods, Cyclone Phailin, Cyclone Hudhud, flooding in Srinagar and the larger valley region, the Kerala floods and being some of the disasters for which, the World Bank has supported the GoI in conducting rapid post-disaster damage and needs assessments in the first four listed disasters. The assessments provided clear guidance on the post-disaster recovery path that needed to be taken. Subsequently, emergency projects were prepared and are currently under implementation. These projects focus on recovery and reconstruction as well as strengthening long-term resilience and emergency response capacity at the State level in the affected States2.
In 2018 and 2019 Kerala saw floods and landslides paralyze almost the entire state. The disasters had a huge negative impact on the biodiversity of Kerala and the already fragile environment. In 2018, a prolonged southwest monsoon over the state of Kerala resulted in one of the worst floods in 100 years, causing estimated losses of US$ 4.25 billion. This post disaster situation has been used as lucrative opportunity by institutions like the World Bank into financing programmes focused on disaster management with rehabilitation, post disaster recovery, building resilience as hook words. The Bank has found an easy entry point for development policy loans and other financing, which are coupled with policy reforms as well.
TheWorld Bank in October 2018 extended a support of up to $500 million to the Government of Kerala’s comprehensive flood recovery efforts and to build greater resilience to future shocks3. In June 2019 the World Bank board approved The First Resilient Kerala Program Development Policy Operation as a Development Policy Financing of 150 million USD4.The proposed operation supports Government of Kerala (GoK’s) resilient recovery from August 2018 floods. The proposed programmatic operation, the first in a series of two Development Policy Loans (DPLs), will support policy and institutional reforms recovery, mainstreaming long-term resilience to disaster risks and climate change into sectors of key importance.
The most problematic aspect of the reforms is that they are expected to mainstream disaster risk reduction and climate resilience into critical infrastructure development and service delivery. The priority sectors include water supply, sanitation, solid waste management, transport, and agriculture. The World Bank’s long-standing agenda of privatization is actualized through these reforms.
This case is very similar to what happened in Indonesia post the 2004 Tsunami disaster, where post disaster funding pushed privatization. With project loans worth $ 1.1 billion and the policy reform support loan, the Bank pushed for privatization and other new regulations that would support economic liberalisation. From this loan, came Indonesia’s new law on oil, gas and electricity that allows for the privatization of respective state-enterprises5.
In the post covid time the MDB’s have already invested close to 5.5 billion USD in India as support for dealing with the crisis. The world bank’s 1 billion USD supported COVID-19 (Coronavirus) Emergency Response and Health Systems Preparedness Project does not only look into immediate support for the public health systems, there is also considerable focus on integrating systems with push for private entities like health insurance companies to integrate with government schemes. We have already in India seen the fallouts of such systems.
India’s also negotiated a Development Policy loan for ‘Accelerating India’s COVID-19 Social Protection Response Program’ with World Bank . Development Policy loans have strings attached in terms of a neo-liberal agenda. These are loans given by the World Bank on the condition of policy changes, which are promised by a country and in line with the Country Partnership Framework for the country. Many of the reforms, which were announced in the financial package, are directly from the reform book of International Finance Institutions who have been demanding a rollback of labor regulations, environmental regulations, power sector reforms and relaxation of the land acquisition laws.
Asian Development Bank has funded USD 1.5billion COVID-19 Active Response and Expenditure Support Program(CARES) project which will support the government mitigate the severe health, social, and economic impact caused by the coronavirus disease 2019 (COVID-19) pandemic. ADB with its operation in health sector has altered and influenced health sector policies in India for sometime now. This emergency operation is built upon previous and ongoing health sector operations and policy dialogues. Since, the first health sector operation in India in 2013 through the support to the National Urban Health Mission (NUHM), ADB’s health sector engagement has been increasing. Following the launch of Ayushman Bharat in 2018 and implementation of NUHM under the National Health Mission, ADB is now developing a program to support delivery of comprehensive primary health care in urban areas (2020 pipeline).
Asia Infrastructure Investment Bank has invested 1.25 billion in COVID response. They have funded two projects both co- financed one with ADB and other with the World Bank. As usual AIIB is riding the back of lead financiers, exhibiting its commitment to COVID without accountability on their end. New development Bank has provided a loan of USD 1billion for Emergency Assistance Program in Combating COVID-19 for support in public health and social safety sector.
The total lending of USD5.5 billion is not huge for a 3 trillion economy and whose annual budget is over Rs. 25 lakh crore. But the influence to change the economy and the mosaic of this country, through these investments, is huge and disproportionate to their lending.
The World Bank and other MDBs are increasingly taking up all the roles of assessment, planning, financing projects and financing through development policy loans . The World Banks language of resilience, sustainability and post disaster recovery needs to be demystified. With increase in natural disasters in this decade and with climate change realities, disaster capitalism has also become a reality. With economies globally in shambles and in need for additional support, this vulnerable situation should not allow MDBs like the World Bank to push their agenda of disaster capitalism with ease.
Recently, a piece of good news has appeared that World Bank Group’s International Finance Corporation (IFC) upholding the right to education in an official commitment and decided to freeze investments in private for-profit pre-primary, primary and secondary (k-12) schools. Currently, the whole world is facing the devastating impact of the COVID-19 pandemic and passing through very trying times, with a third of the global population under lockdown. School closures are impacting more than 1.5 billion children. In such a scenario, this is a big win for civil society and an encouraging decision in favour of billions of children, especially those who are at the margins and dependent on the public system.
This landmark decision by IFC has responded to the concerned voices about the effects on segregation and exclusion, inadequate education quality, avoidance of standards and regulations, poor labour conditions, and profit-seeking behaviour of commercial schools. Hundreds of civil society organisations including Right to Education Forum (RTE Forum) and individuals from different part of world urged earlier to the World Bank through an open letter to take a clear and principled position in support of free, publicly provided education and against the use of development aid to fund for-profit or commercial education. They raised the issue of increasing phenomenon of commercialization of education in lower-income countries because donors are actively using public aid money to drive privatization in these countries, including the World Bank group. They mentioned that while most of its funding goes to support public education provision, the World Bank is also funding some market-oriented public-private partnerships (PPPs) through its International Development Association (IDA). It is also actively advising countries to pursue PPPs and adopt reforms that reduce regulations and incentivizes the growth of private education markets. It has also increased its direct support to commercial private education providers through the International Finance Corporation (IFC)-including fee-charging, for-profit school chains, which clearly undermine state obligations as defined in international human rights law.
European Parliament and Global Partnership for Education (GPE),the biggest multilateral fund for education, had already taken strong positions against to support commercial or for-profit education provision. The UN Human Rights Council, the African Commission on Human and People’s Rights and various UN Treaty Bodies have also recognized the obligation to progressively secure free, public, not commercialized, education as a right.
In the year of 2015, The UN Special Rapporteur on the right to education Mr. Kishore Singh has submitted his report to United Nation General Assembly wherein he had raised his concerns on the rapid expansion of privatization of education through deregulation and liberalization of education sectors. In this report, he has majorly highlighted the challenges of public-privatete partnership in education in safeguarding education as a public good. On similar lines, Education International, world’s largest teachers’ union held its 7th World Congress in Ottawa on July 2015, where it passed a resolution against privatization of education services.In its resolution, it said, “EI is concerned that privatization and commercialization policies have the effect of undermining the right to free quality public education and may create, exacerbate and entrench inequalities in access and participation as well as erode teaching and learning conditions in schools.”
These positions uphold the principle that education is a right, not a market commodity. Investing in free and inclusive education of good quality is the best way to ensure the fulfilment of SDG 4.
In India, there has been an incremental rise of privatization of education both in terms of increase in the number of private schools as well as in the numbers of students enrolled in them. The DISE data has provided trends of elementary education in India according to which there has almost 24.28 per cent increase in the number of private schools in between 2010-11 to 2014-15. In contrast, the growth of government schools is only 1.51 per cent. When it comes to the enrolment of students, during the same period, there is a steep rise of 24.42 per cent in private schools as against an 8.55 per cent decline in enrolment in Government schools. We need to keep in mind that it was in the year 2010 that the Right to Education Act 2009 came into force and in spite of this, there is a visible declining trend in public education both in terms of the number of schools as well as in enrolment of students in public schools. On the other hand, during the period private schools have not only been opened in large numbers and attracted students leaving the public school system. Inadequate spending on education by Govt of India proved one of the significant barriers for slow implementation of RTE Act within the stipulated timeline. It shows the apathy of state towards the strengthening of the public education system.
Private schools across rural and urban areas have been on the rise and a significant segment of education today, almost 30% of elementary education, 60% secondary education, and 75% higher education are privatized. There are different types of private unaided schools with varying fee structures: from low fee to elite, high fee demanding schools. Andhra Pradesh Government has signed an MOU with the private school chain, Bridge International Academy (BIA) for making the state their knowledge hub in the year of 2015. The Government of Andhra Pradesh has also invited the BIA to set up its India headquarter in Vijaywada, Andhra Pradesh. The entry of a big player like BIA with its deep pocket and highly influential investors like Facebook, Bill and Melinda Gates Foundation, World Bank etc, may lead to an even greater push for privatization of education in the country. Civil society in general and RTE Forum, in particular, have vehemently opposed the stance governments. Private schools are also trying to redefine the quality of education by their minimal standard of learning outcomes like reading, writing and numeracy. Five States of India –Manipur (73.3%), Kerala (62.2%), Haryana (54.2%), Uttar Pradesh (51.7%), and Meghalaya (51.7%) – have more than 50 per cent children in private schools (in the elementary school age group).
This trend of increase in private schools indicates the fact that education as ‘social public good’ is losing its base and privatization, commercialization and corporatization of public education are gaining momentum. There is an internationally known trend that reinforces the positive correlation between income and private schooling. In India, as household income increases, there is a greater tendency to send children to private schools, whereas children from the poorest households continue to access government schools. The data also clearly highlights gender bias in terms of more number of boys being sent to private schools as compared to girls. At a time when there is a fast growth of private schools in the country, thousands of government school are getting closed across India in the name rationalization/merger of schools.
According to a longitudinal study carried out by Azim Premji Foundation in Andhra Pradesh on school choice programme, “contrary to general perception, fee-charging private schools are not able to ensure better learning for children from disadvantaged rural sections as compared to government schools.” It also makes it clear that private schools do not add any value as compared to government schools when socio-economic factors are adjusted. It also says that several factors, both inside and outside of school, have a bearing upon the learning outcome of a child. This is a trend that is also highlighted in international literature: the DFID comprehensive review on the functioning of private schools (Day Ashley et al, 2014) also concludes that there is ambiguity about the size of the true private school effect.
The recently adopted Abidjan Principles on the right to education lays out the existing human rights obligations in this regard and guide how IFC can ensure its investments support the right to public education.
Civil society organizations welcome the IFC’s leadership in recognizing that its education investments must not undermine the right to education, including public education, and that there have been concerns with past investments in this regard.
The COVID-19 corona epidemic that has taken over 16,99,019 lives all around the world has undoubtedly been a disaster with no parallels in modern history. Political and social analysts describe this pandemic as the reason for the most sustained period of worldwide public suffering since World War II and it indeed remains a fact that the global outreach of the virus has brought forth societal and economic shutdowns. The virus has not just wrecked the physical well-being of people globally but has also set in motion a precarious chain reaction that is all set to upset the veneer of stability in one country after another. If anything, this pandemic has laid bare the contradictions of the capitalist system like never before; for this time, unlike the 2008 global financial crisis, it would be difficult for the capitalist and neo-liberal models to rescue themselves without conceding ground to the biological implausibility of capitalist globalization.
While the national bourgeoisie is busy shifting the blame for the economic crisis on to the virus and many countries are significantly looking forward to accelerate protectionist tendencies, what the virus has in reality exposed is the deep-seated contradictions within the neo-liberal framework accumulated through decades. Hence, the crisis that we see today is a crisis of capitalism as a whole, as much as it is one triggered by corona. While it must be acknowledged that capitalism always delayed impending crises through different means such as massive credit expansions and racking up debt, thereby stonewalling growth, the bogey of capitalist advancement had to confront its current pandemic-sponsored rupture without any prior warnings. Thus, the virus seems to be only an unforeseen episode that turned spotlight on the deep fault-lines in non-democratization of economic power and freedom. While forfeiting the opportunities for building a truly international public healthcare infrastructure at the altar of the large pharmaceutical companies, little did the developed world envisage a time when thousands would be left dead with no antidote in sight for the worst ever viral attack.
It is in this context that many left wing intellectuals like the American historian and sociologist, Mike Davis, sees these times as a possible opportunity for “a second New Deal; the moment to reclaim social ownership and democratization of economy” (Zitelman, Forbes, 30March, 2020). However, the exhilaration over the assumed retreat of hyper-globalization, while presenting a chance to reset both global and personal landscapes, could also be a scenario where states get to reinforce nationalism. This is precisely because of how state is essentially a coercive institution which nurtures itself through class divisions in society. Consequently, as citizens world over would turn to their respective governments to protect them from the pandemic, the emergency powers at the disposal of these states currently, to combat the viral outbreak, in all likelihood would become the new status-quo. The “democratic aura” of the West has clearly been damaged by the lack of swiftness in their responses to tackling the crisis in comparison to say China, South Korea or Singapore. Hence, COVID-19 would by default become the most potent soft-power tool to turn the world into a less open, less free and more surveillance space.
It is indeed true that this crisis presents the best opportunity for fascist forces to engineer a parallel pandemic of despotism that would embolden deep-rooted resentments and frustrations in societies along religious, national and social prejudices. A societal set-up where the mob becomes the moral prosecutors and pro-bono law enforcers would definitely help in satisfying the morbidity of masses who finds the pandemic an excuse for a dangerous catharsis. The attack against Muslims in India, the linking of the pandemic to migrant population in Hungary, the furtherance of acrimony towards the Latinos and Hispanics and strengthening of border controls in USA are all testimonies to how every despot loves a good pandemic. Nevertheless, approaching the corona crisis as a crisis of industrial capitalism is also inspiring several anti-globalization activists and economists to understand the corona crisis as an avenue for radical wealth redistribution and as a way forward for catalyzing a transformative leap.
The casualities of natural events like Ebola, Zika, MERS, SARS, Influenza or now Corona are not just external shocks which are “given factors external to the economic system” (Nayeri, Our Place in the World, 27 March,2020). They are rather archetypes of how capitalist accumulation serves as the root cause of eco-social crises and how all such existential threats amplifies the overall crisis by undermining the most vulnerable groups and regions first off. The financial and economic crises kindled by corona are unearthing the structural weaknesses inherent in all the major world economic models including the USA. And this, being a far worse situation than 2008, also necessitates a coming together of various brands of political ideologies to devise fiscal policies that would help “slow, if not stop, the unfolding recession” (Goodman, The New York Times, 13 March, 2020). Societies are bound to change and look different post every major crisis and therefore, while all economic and political life was relentlessly committed to an upward redistribution of wealth for the past many decades, the anti-capitalist advocates believe that the solution to a pandemic of this scale lies in seizing the opportunity for a redistribution of financial resources as per social needs. They believe that the virus has in fact demonstrated the need for states to reorganize themselves beyond the framework of private accumulation of wealth (Damon and North, ICFI, 10 March, 2020).
The need to shift away from a market-oriented economic model towards a state-controlled supervision of the pandemic is best reflected in the words of the French Economist Thomas Piketty, when he talks of how “drastic state-led interventions in the economy during the corona crisis could show governments how much they can regulate the economy” (Zitelman, Forbes, 30 March, 2020). Many governments world over are being forced to take measures, unthinkable till a month back, in order to help people sail through the crisis. Paris Marx in his essay on Think (24 March, 2020) gives several such examples ranging from the nationalization of all private hospitals and health care providers in Spain to writing off mortgages in Italy to suspension of taxes, rents and utility bills for several companies in France including possible nationalization of bankrupt companies to halting evictions in USA, with states like California planning to provide shelters to at least 108,000 of its homeless. Many political analysts and economists are thus hopeful that the blind spots of capitalism and bad governance would necessitate a radical shift in political and economic practices. Consequently, they see the possibilities for a universal health care system, free medical coverage for low and middle income groups so that they do not have to dive into medical bankruptcies due to the prevailing private insurance mechanisms and an economic stimulus package that would encourage the state institutions to pump more money into the stock markets and ease off the burden of interest rates and loan debts on students and other vulnerable communities.
The renewed hope for a fundamental reorganization of society in these times comes from the understanding that this crisis has hit the capitalist model differently from the 1970’s or 2000’s as, while the virus followed the route map of global capitalism and transmitted itself world over through business, tourism and trade, its cardinal cause is also external to the economy. No scientist or economist can deny the fact that it is the fundamentals of the global capitalist model that helped the pandemic widen its target group- be it the heavy reliance of most on labour market or the grandeur of international connectivity. And these are not features specific or exclusive to any one economic policy paradigm; rather they are the essential characteristics of capitalism as such, making the corona crisis a global watershed moment. It is for this very reason that many left-wing intellectuals like William Davies vehemently talks about “how a crisis of this magnitude can never be truly resolved until many of the fundamentals of our social and economic life have been remade” (Zitelman, Forbes, 30 March, 2020).
While the neo-liberals are yet again managing to oversimplify the crisis by putting the responsibility of institutional failures to tackle the crisis on the state which they say had inadvertenly overindebted itself, the anti-capitalists too should exercise caution while clamouring for an all-powerful state in the pretext of mitigating the crisis of capitalism. Solidarity cannot be a synonym for ruthless state intervention. Nevertheless, the inoperability of many of the contemporary capitalist consumerist models under the present conditions necessitates a cultural, scientific and dogmatic alteration in the ways in which social formations are typically conceived by populations across space and time. The masses of the most advanced capitalist countries are entering this new phase of crisis not really after a period of growth and prosperity but rather after more than a decade of economic austerity and slowdown and this makes class struggle inevitable.
It is beyond doubt that the society at present is going through a phase that best represents the deficiency of a system of rule and social order based on capitalist advancement. The inadequacies of the market model have turned most of the market forces into temporary “socialists” who are waiting for the states to bail them out by passing on the unpaid bills to the working classes. The request from multi-billionaire Richard Branson for a state-supported bail-out of his Virgin Atlantic airlines with a net worth of 4 billion pounds while simultaneously asking his employees to go on unpaid leave bears testimony to how the bourgeoisie are relying on public money to rescue themselves from the chaos. However, it is the responsibility of the state systems to form the front line of defense when it comes to public health and safety and this can only be possible by discarding the austerity measures solely intended to design tax cuts and subsidies to redeem the corporates and the rich. As the endless accumulation of capital is clearly falling apart from within, all over the world, and the recklessness of consumerism is intensifying environmental degradation, a social democratic vision that couples public health measures with employment/ livelihood protection of the weakest seems to be the best way out.
World Bank Aid or that matter any aid and its impact on countries has been a controversial discussion in development finance circles. While it is true that aid provides an important source of income for poorer countries and has an effect on reducing poverty, there are debates on how the powerful and economic elites capture these resources. It is also seen that the level of corruption is very high in aid-dependent countries and some of these resources serve their interests.
The study Elite Capture of Foreign Aid Evidence from Offshore Bank Accountsby Jørgen Juel Andersen, Niels Johannesen, Bob Rijkers looks into this question of elite capture of foreign aid and finds that aid disbursements to highly aid-dependent countries coincide with sharp increases in bank deposits in offshore financial centers known for bank secrecy and private wealth management, but not in other financial centers.
The paper is very controversial after the ‘Economist’ magazine carried an article on the correlation of delay in publishing of this research and untimely resignation of the World Bank chief economist, under whose supervision the paper was produced. The paper was subsequently published by the World Bank. The paper study the aid diversion by looking at World Bank aid disbursement and data on foreign deposits from the Bank for International Settlements (BIS).
The study consisted of 22 most aid-dependent countries of the World Bank. It was seen that there were significant increases in the value of bank deposits in tax havens in the same quarter of World Bank aid disbursement. The spike in the deposits to tax havens in the same quarter of disbursements and no subsequent hikes in quarters before and after reveals a massive siphoning of World Bank aid meant for poorer countries who also happen to be high in the corruption index.
The study revealed that when a country receives aid equivalent to 1% of GDP, its deposits in havens increase by 3.4% relative to a country receiving no aid. The report states that at a mean about 5% of all the aid ended up in tax havens. This ratio increases with aid dependency. The more the aid, the more will be the leakage as is seen in the sample of countries which received 3% of GDP where the leakage rate is around 15%.
Much of the aid could be traced back to bank accounts in Switzerland and Luxembourg operated by the powerful elites from the aid-dependent countries. This, however, is just a tip of the iceberg as it calculates only the money which has flowed into tax havens and does not include investments in real estate, gold and other luxury goods including automobiles etc.
World Bank funding generally goes as either Development Policy Financing (DPF) or for Investment Project Financing (IPF), the latter being the one which is meant for projects which are supposed to reduce poverty. Project financing is said to be more robust and difficult to divert given the various policies including procurement and is tied to specific expenditure. However, the study reveals that an aid disbursement of 1% of GDP is associated with an increase in haven deposits of around 2.8% when the aid takes the form of DPF and 5.3% when it takes the form of IPF, bursting the myths of higher accountability and transparency in its funding.
While the above-mentioned study is regarding World Bank aid-dependent nations, the learning is relevant to countries like India which have also seen the capture of public resources meant for the poor and transfer of common resources to the countries elite. The level of corruption that existed when state-dominated economy earlier continues in new ways in the post-liberalisation era. Former Prime Minister Rajiv Gandhi in one of his famous statements acknowledged the leakages due to corruption. He stated that only 15% of the government intended to the poor reaches them. The situation did not change after liberalisation too. The former deputy chairperson Montek Sigh Alhluwalia has stated based on the planning commission study on PDS that only 16 percent was reaching the targeted poor in 2009.
In fact, the corruption scandals which involved public money being diverted to corporates have intensified after liberalisation when state-owned companies changed hands to private parties at throwaway prices or massive financial scams which seized public resources for private profit. India has seen a phenomenal rise in billionaires who have given from natural resources and its extraction be it coal, forests and state gifting of public resources like land. The increase in inequality post-reform period has reached such insanity that the combined total wealth of 63 Indian billionaires is higher than the total Union Budget of India for the fiscal year 2018-19 as documented by Oxfam India.
The recent financial scams including the high non-performing assets (NPA) where corporates took loans from public sector banks but diverted its uses and fattened themselves and later got huge subsidies, tax rebates and cuts and write-offs for the money they owed to the public banks. The study by Jørgen Juel Andersen, Niels Johannesen, Bob Rijkers though limited to World Bank aid also brings forward the issues of the capture of public resources which gets diverted for private profit. The mechanisms and policy prescriptions by the World Bank on Public Private Partnership and newer models of the same which pushes more and more risks to public exchequer need to be evaluated in this light.
The study calls for more transparency of public funds, strong accountability mechanisms and creation of quality democratic institutions and democratisation of existing ones to truly represent people to eliminate the elite capture of resources.
Procedures for World Bank’s new accountability mechanism lacks transparency and inclusivity
In a press release issued early last week, the World Bank has announced that the review of its independent accountability mechanism, the Inspection Panel, has been completed and that a few major reforms were added to the Inspection Panel. Accordingly, a new accountability mechanism – an “expanded” one as the Bank says, called ‘World Bank Accountability Mechanism’ will be in place from September 2020 and will constitute two separate roles – the Inspection Panel (IPN) will focus on the review of compliances of projects with Bank’s operational policies and a separate Dispute Resolution Mechanism (DRS) will resolve the grievances of affected communities, in a time bound manner, instead of compliance review. While housed under one umbrella, the DRS will organisationally be separate from the IPN to ensure its effectiveness and to avoid conflict of interests.
New Roles, Governance Structure
Independent Accountability Mechanisms (IAMs) of Multilateral Development Banks have different governance structures and varied roles with assigned functions. It is necessary to see the new reforms of WB’s IPN in comparison to the previously established roles of both Compliance Advisor Ombudsman (CAO) of the International Finance Corporation (IFC) and Accountability Mechanism (AM) of Asian Development Bank (ADB), since most of the complaints from Indian communities have been registered with these IAMs.
There were only four IAMs that offered both compliance review and dispute resolution services – namely CAO of IFC, the Complaints Mechanism (CM) of European Investment Bank (EIB), AM of ADB, and Independent Review Mechanism (IRM) of African Development Bank (AfDB). Now WB’s new IAM will also offer both compliance review and dispute resolution.
The CAO reports to the President of the World Bank Group, while the dispute resolution component or ‘problem solving function’– the Office of the Special Project Facilitator in ADB’s AM report to the Bank President, and the compliance review component – Compliance Review Panel in AM report to the Board of Directors. The new IAM of WB will be governed by an ‘Accountability Mechanism Secretary’ (AM Secretary) who will be appointed by and report directly to the Bank’s Executive Directors. While administratively integrated in this new mechanism, the IPN members will remain fully independent and continue to report directly to the Board on all compliance investigation matters. Which effectively means, the DRS staff will report to the AM Secretary who then will report to the Board, whereas the IPN will directly report to the Board (Whereas, the CAO staff along with its three functions – dispute resolution, compliance and advisory- report to the CAO Vice President).
Organisationally in the new IAM, the IPN will have no role in DRS. The IPN will continue to be constituted and operate as established in the IPN Resolution.
Operationally, the new IAM will apply the existing eligibility criteria of IPN for compliance for its dispute resolution function. There will be no change to the current practice of recommending eligibility, when a complaint is registered, based on the IPN’s current eligibility criteria. During the eligibility phase, the IPN recommends eligibility for compliance. After the Board has approved the eligibility for compliance, the AM Secretary will offer an opportunity for dispute resolution to the parties. If Borrower and Requesters voluntarily agree to go for a dispute resolution, the case will be referred by the AM Secretary to the DRS. The AM Secretary will inform the Board, the IPN and Management of the parties’ decision. In case the parties agree to use the DR process, the compliance process of the IPN will remain in abeyance. If the parties do not agree, the AM Secretary will inform the Board, the IPN and Management and the case will be taken up by the IPN for a compliance investigation. The Parties to the DR process would be the Requesters and the Borrower’s relevant project implementing agency.
While ADB’s AM has a slightly different approach – one can approach its problem solving function office – the Office of the Special Project Facilitator and file a complaint regardless of whether ADB operational policies and procedures have been violated ( this mandate is required only if one is approaching the Office of the Compliance Review Panel).
Meanwhile, the CAO’s Ombudsman function responds to dispute resolution complaints and if they are not solved, they are transferred to the compliance review function.
Extended Eligibility time limit for Requesters to file Complaints
Except the IPN, almost all other IAMs had established their own mechanisms much earlier. They all have longer eligibility time periods for complaints registrations than the IPN. Yet, In the case of the CAO, the eligibility ends when the institution’s engagement with the client or the project ends. Whereas for AM, the latest date by which a complaint can be filed is 2 years after the loan or grant closing date. This date is known in advance, disclosed to the public, and can be found on the ADB website. Their brochure also shows the timeline in which a complaint is processed and responded to.
For IPN, this time requirement will be changed so that any request filed up to fifteen months after the closing date of the loan financing the project can be accepted by the IPN. This requirement will be applicable only to new projects approved by the Board after these changes take effect.
Formal recognition of the Inspection Panel’s advisory role
Advisory services focus primarily on the lessons that the IAMs learn about the functioning of MDB operational policies. The advice can be given as recommendations in specific compliance reports, lessons learned sections in annual reports and in other publications. The CAO has a robust advisory policy, where the CAO provides independent advice to the President of the World Bank Group and management of IFC and MIGA. CAO advice focuses on broader social and environmental concerns, policies, procedures, strategic issues, and trends. CAO’s focus is on preventing future harm and improving IFC/MIGA’s performance systemically as their policy states,
The IPN did not have explicit advisory authority. The IPN does provide informal advice through statements in its compliance reports and its publications, including its annual report and Emerging Lessons series. The press release states that this advisory role has been formalised from 2018.
Formalization of the Inspection Panel’s practice of coordinating with co-financiers’ accountability mechanisms on joint complaints
The World Bank engages in co-financing arrangements with other MDBs. In these cases, requesters could file requests for investigations regarding the same set of issues with the IAMs at two institutions. This always led to two challenges. The first challenge arises when one IAM receives a request regarding a project whose agreements stipulate that the policies of another institution govern the project, like the case is with Asian Infrastructure Investment Bank (AIIB). The second arises from differences in the procedures of the two IAMs, such as different time limits for eligibility and different rules on sharing draft reports with the requesters. None of the IAMs have developed any explicit policies or practices on how to deal with these situations. Instead, they have dealt with these situations by signing a case-specific MOU detailing how they will cooperate in investigating the same project. The World Bank is yet to clearly state whether these challenges have been addressed or they remain the same, irrespective of formalising arrangements with co-financiers’ IAMs.
Sharing IPN report with requesters before consideration of the Board
This procedure came into effect from 2018, but is officially declared now under the enhancements for IPN. Earlier, IPN’s investigation report was not shared with the requesters until after the Board had approved it. The requesters maintain that this had created two problems. First, the practice was unfair because requesters were being treated differently from Management. Second, requesters lack the knowledge to engage effectively with Management about the action plan.
Independent and proportionate risk-based verification of Management Action Plans
All the IAMs, except the IPN, are expressly authorized to monitor the implementation of the management action plans (MAPs) developed to address the IAMs findings of non-compliance and the outcomes of dispute resolution procedures. All IAMs that engage in dispute resolution have authority to monitor the implementation of the outcomes of the dispute resolution if the parties so request. In addition, the IAMs including CAO and those at the AfDB, ADB, EIB, EBRD and IDB have authority to monitor the implementation of management action plans developed in response to findings of noncompliance. The authority of the IAMs does vary. In some cases, the IAMs are authorized to monitor all cases in which they have made findings of non-compliance. This is the case with CAO and ADB’s CRP. In the case of the AfDB’s IRM and the IDB’s MICI this authority requires prior Board authorization. It is usually given at the time the board approves the IAM findings on compliance and is based on a recommendation from the relevant IAM.
From September 2020, the IPN can now verify MAPs in those cases where proportion and risk criteria will include (i) urgency of redress, (ii) risk of repetitive harms, (iii) number and vulnerability. The IPN recommendation, generally, will be made after substantial implementation of the MAP or, if the monitoring report indicates lack of implementation, at any stage of implementation. In exceptional cases, upon IPN recommendation, with input from Group Internal Audit, the Board can discuss and assign verification at the stage of approval of the MAP or shortly after. This process will avoid an automatic “one-size-fits-all” approach. The benefit of this option is that the Board would be assured of receiving independent reports on the adequacy of the management action plans, but restricted to few cases only.
How the procedures fell short
The World Bank’s Inspection Panel was the first accountability mechanism (1993) of its kind for the development finance institutions, which was established as a result of people’s struggles against the Sardar Sarovar Dam Project on river Narmada in India. The tenacious campaign around this project led to the formation of the Morse Commission, which strongly criticized the World Bank’s performance in the areas of environment and resettlement of people displaced by the construction of energy projects. Over the years, the Panel has played a major role in trying to adhere to accountability at the Bank and attempting to secure redress of grievances in some cases. Though established as an independent mechanism from the Bank management, the Panel majorly reported the eligibility of the complaint to the Board of Directors of the Bank and did not possess strong recommendatory powers.
When the review of IPN was first announced officially in 2017, Indian peoples movements, civil society and affected communities had called out to the Bank to keenly call forth to strengthen the IPN mandate. While appreciating the World Bank on this effort for a review on the occasion of Inspection Panel’s 25th Anniversary, the CSOs criticised the Bank for giving less than a fortnight to seek comments on this issue. They demanded to extend the deadline by at least two months in the interest of the sanctity of the process. They further stressed that wider publicity should be given to ensure better participation in the process. “The current consultation is designed and carried out to exclude affected communities, for whom the Inspection Panel is established,” the signatories said with much disappointment.
During the deliberations in a symposium organised in India at the 25th year of IPN, in which both the Inspection Panel and Compliance Ombudsman Advisor (CAO) participated remotely, the inadequacy of IAMs in functioning independently and efficiently; lack of capacity and powers to promote and ensure accountability; failure in intervening timely to ensure that the voices of the affected people are adequately heard, addressed and issues resolved; and lack of powers to stay the progress of project construction in cases of extreme violations, were highlighted.
A brief look into the newly released report of the Bank, ‘Report And Recommendations On The Inspection Panel’s Toolkit Review’ (March 05, 2020) shows that the external review “did not make recommendations but provided options in seven areas: (i) advisory services, (ii) Bank Executed Trust Funds (BETFs), (iii) co-financing, (iv) sharing findings with Requesters, (v) problem solving/dispute resolution, (vi) time limit on eligibility for requests and (vii) monitoring of Management Action Plans (MAPs)”. And that subsequently, a Working Group of the Committee on Development Effectiveness (CODE) that included members from all Executive Directors’ offices, was established to consider the areas identified by the Review.
When the Bank announced in 2018 that CODE was inviting submissions from relevant stake holders, the Indian civil society had strongly asked for transparent and wider consultative processes with extended time period for affected communities. Opening up the process; adhering to the principle of free, informed and prior consent; adequate time; holding consultations widely and not in national capitals/metros alone; unmasking the ritual format of such processes; IPN having suo moto powers; IPN having suo moto powers for timely intervention – even during the early stages of project appraisal; IPN having a pro-active role even to delay the progress of any project until the violations of the project have been comprehensively corrected and compensated; IPN having monitoring function; IPN having punitive powers and measures for demanding for a fresh Environmental and Social Impact Assessment (ESIA) wherever erroneous ESIA have been found, were the recommendations from the Indian groups.
During both times, the Bank did not acknowledge the receipt of the submissions from India. Despite the recorded exhaustive measures which were being adopted by the Bank to see through this review, this process has been quite the opposite in nature– opaque, extremely limited opportunities for concerned civil society stakeholders and especially for the affected communities to share relevant inputs. The information available in the public domain was restricting in its scope and the final draft proposal was not shared, despite requests being sent by concerned groups from outside India to the Bank. This was a striking drawback, especially in the wake of IFC having faced defeat at the United States Supreme Court on the Immunity Verdict last year, on the case filed by Indian farmers and fishworkers on serious violations caused by IFC-funded Tata Mundra Ultra Mega Power Project in Gujarat India.
With the assistance of the IPN and Management, CODE identified eleven projects whose stakeholders had experience in the IPN process within the last seven years to provide feedback. The selected projects took into consideration regional representation and included projects that had gone through all the different steps of the IPN process. The procedures for arriving at this decision and who all were the stakeholders from these eleven projects is not in the public domain. This tunnel vision and consequent decision making is flawed.
The entire process lacked transparency and inclusivity.
It is further stated in the recommendations that the new Mechanism will be headed by an “Accountability Mechanism Secretary” (AM Secretary) who will be appointed by and report directly to the Bank’s Executive Directors. The AM Secretary will be responsible for planning and overseeing the processes of the Accountability Mechanism in line with agreed procedures and will be responsible for keeping the records of the AM proceedings. She/He will also oversee the Dispute Resolution Service. All staff of the Accountability Mechanism will report to the Accountability Mechanism Secretary with the exception of the Inspection Panel members, who will continue reporting to the Board of Directors. The DR process would have a one-year time limit in order to provide assurance that the process is not prolonged and incentivize the parties to reach an agreement. This administrative challenge is going to present problems with the affected communities who would find it challenging – in the first place to finish the eligibility process of their complaint in English language, the wait during delayed timeline of these complex processes and now having to identify whether they need a compliance review or a dispute resolution.
While it is appreciated that requesters of complaint can submit their grievances beyond project closure (for new projects with effect to the new change in IPN), a distinct DRS will be operational in six months, and an independent and proportionate risk-based verification of Management Action Plans would be established as an additional assurance, they still do not address the fundamental questions ever posed at the Bank by the communities. Will these changes impact the affected people in any positive way? The tight schedules and methodologies lacked a genuine effort for meaningful consultation. Currently, the onus of identifying Bank’s lending to a particular project, understanding the Bank Operational/Safeguard Policies, knowing about the existence of IPN and developing a complaint in a manner acceptable to IPN is on affected communities. This structure disempowers the communities for they are never consulted in advance with full disclosure of impacts, lenders and of compensation/rehabilitation for their losses in most of the projects. Hence in projects, IPN has knowledge about serious impacts, it should have powers to take suo moto investigation as well as actions. Particularly in cases of high risk or ‘Category A’ projects, knowing the potential irreparable consequences, the IPN should proactively look out for the involvement of the potentially affected communities and facilitate their observations/complaints. Sadly, none of these reflect in the “enhancements” mentioned in the review report for the mechanism which boasts of 27 years’ wealth of documented information and engagement with affected communities and civil societies all around the world.