IF-Eye Newsletter #12
22 January 2007
BIC's January 22, 2007 IF-Eye newsletter spotlights recent civil society and international financial institution news.
IF-Eye
Issue 12: January 22, 2007
A publication of the Bank Information Center
In this issue:
- Updates
- Civil Society Highlights
- Spotlight: New report questions Bank’s impact on poverty reduction
- Spotlight: World Bank to incorporate core labor standards in infrastructure projects
- Karibu to World Social Forum Nairobi 2007!
- Announcements and Resources
- New at BIC: RSS feeds; Transparency and Environment Policies; and now hiring for Asia and Middle East/North Africa Program Managers
European Bank for Reconstruction and Development decides against involvement in controversial Sakhalin II project. EBRD. January 16, 2007. The EBRD has decided not to fund the largest oil and gas project in the world, the controversial Sakhalin II, on Russia’s Far Eastern island.
Wolfowitz needs to earn staff trust to succeed. World Bank. January 2, 2007. A New York Times editorial contends that the World Bank President needs a "more inclusive management style and a more diplomatic inner circle".
IFC and EIB prepare to approve financing for controversial Uganda dam. EIB in Africa. December 22, 2006. Both the International Finance Corporation (IFC) and European Investment Bank (EIB) disclosed project documents for the controversial Bujagali hydroelectric dam. IFC board date set for April 2007.
European Investment Bank approves over $1 billion for Africa's energy sector. EIB. December 21, 2006. The European Investment Bank (EIB) has approved an astounding €825 million (approximately $1.08 billion) worth of loans and investment for major energy projects in Africa. This development is seen as a move by the EIB to push through projects before the end of the 2006 Fiscal Year.
African Development Bank prepares for next replenishment round. African Development Bank. Having completed a mid-term review of its operations under the current round of funding, the African Development Fund (the concessional lending arm of the African Development Bank group) is gearing up to facilitate the 11th round of donor replenishment, ADF-XI. Negotiations will begin in May.
Quick Reference Guide to Contract Transparency at the IFIs. BIC. January 9, 2007. An accessible source of information on international financial institution contract and revenue transparency policies and their weaknesses.
Internal Investigation Shows World Bank Water Project Destroys Livelihoods in Pakistan. ActionAid Pakistan and International Rivers Network. Report comments on recent World Bank Inspection Panel findings that a Bank-funded water project in Pakistan has led to widespread environmental harm and suffering among local communities.
Let’s Launch an Enquiry into the Debt. CADTM. New manual on how to organize debt audits.
Civil society organizations demand information about IIRSA. Articulación Frente a IIRSA. Twenty-two civil society organizations belonging to the Articulación Frente a IIRSA (Articulation Against IIRSA) recently wrote the President of the Corporación Andina de Fomento to demand the release of project documents related to the controversial IIRSA (Integration of Regional Infrastructure in South America) initiative. The President refused the request. The CAF is facing growing pressure to live up to minimal safeguard standards compatible with its current lending volume of $5.65 billion in Latin America.
The World Bank’s Independent Evaluation Group recently released the Annual Review of Development Effectiveness 2006: Getting Results. The report analyzes Bank and borrowing-country efforts to reduce poverty, focusing on three questions: if and how growth has translated into poverty reduction; what factors help deliver results in sectors that focus on the poor; and what Bank programs have helped raise the accountability of public institutions in charge of delivering results. Some key points and reactions (BIC comments in italics):
- Achieving sustained growth remains a challenge. The report states that less than half of the countries surveyed experienced per capita income increases of 2.5% or better over a ten-year period.
- And growth alone is not enough. The report reiterates the long-standing argument that growth alone does not result in poverty reduction. Growth must create jobs for the poor and be achieved alongside policies for social inclusion, the report notes. If the Bank wants to be serious about poverty reduction, then it needs to be serious about project selection. Too often, the institution prioritizes foreign investment-led, export-oriented development that doesn’t address the needs of the poor. The oil and gas industries are a stark example of this reality.
- Tackling rural poverty remains a challenge. The report claims that the Bank hasn’t properly addressed rural poverty in many of the countries surveyed, and projects have failed to lead to satisfactory outcomes. It cites the examples of Senegal and Malawi, where Bank programs have failed to address key rural issues. Particularly appalling, given the institution’s mission of poverty reduction.
- The Bank often tries to spread itself too thin. Country Assistance Strategies are not aligned with borrowing country political and institutional realities. The Bank’s “blueprint” for borrowing countries has long come under fire for its failure to ensure and/or take into account local input. Indeed, claims that the institution is trying to do too much are not new. The Bank should stay true to its poverty reduction mission, drawing off the expertise and comparative advantage of other international and local actors when appropriate.
- Public sector reforms need to take local realities into account. The Bank has primarily focused on strengthening public sector accountability through reforms in public administration and public financial management, but there is little evidence that these efforts have improved the perceived quality of governance. The report notes that it is critical for reform initiatives to be aligned with political realities, focus on enforcement alongside establishment of institutions and address the areas where the public and private sectors overlap. Securing broad-based political support is also essential. One area in which these concerns are already coming to the fore is the Bank’s new anti-corruption strategy. Drawing off of local systems and efforts, and fostering the ‘demand side’ of governance (as appropriate), will be critical to the strategy’s success.
What is most striking about the report is that it confirms that the World Bank’s efforts to promote sustainable growth have had mixed success at best, and – more importantly – growth itself isn’t sufficient to meaningfully reduce poverty. These important findings need to be internalized by both management and the Board as they look at the next generation of Country Assistance Strategies and lending priorities. The report furthermore reinforces the call for an independent public audit or evaluation of past World Bank lending to assess what has worked and what hasn’t, and determine what the institution needs to change in the future to ensure that its lending more concretely achieves its mission.
Read the report: http://web.worldbank.org/WBSITE/EXTERNAL/EXTOED/EXTOEDARDE/EXT2006ANNREVDEVEFF/0,,menuPK:3079280
~pagePK:64168427~piPK:64168435~theSitePK:3079226,00.html
World Bank President Paul Wolfowitz has announced that future infrastructure projects supported by the institution will adhere to the core labor standards defined by the International Labor Organization (ILO). Wolfowitz announced the move at a December 15 meeting with trade union officials. The four core standards are drawn from eight conventions and they are in regards to child labor, forced labor, workers’ rights to organize and collective bargaining and freedom from discrimination in the workplace.
The same core standards were adopted by the International Finance Corporation (IFC), the private sector lending arm of the World Bank, in May 2006. However, trade union representatives are still discussing the implementation of the standards with the IFC.
The push by trade unionists to have the World Bank back a formal group of core standards is a response to the Bank’s inconsistent record of reprimanding violators of labor rights. For example, a recent report from the World Bank to the government of China recommended that the government should not concern itself with “so-called ‘labour standards’”.
The World Bank and IMF’s yearly publication “Doing Business” - which rates the ease of operating a business in various countries around the world - has also received criticism for its failure to support labor standards. “Doing Business defines almost all labor regulations - such as hours of work, minimum wages, advance notice of mass dismissals and protection against discriminatory practices – as undue impediments to ‘doing business’”, International Trade Union Confederation (ITUC) General Secretary Guy Ryder has stated.
The real test will be in operationalizing the standards, and working cohesively with other organizations like the International Labor Organization (ILO). Although the Bank has adopted labor standards in the past – for example language and policies addressing forced and child labor – successful implementation has been a challenge. This time around, many are watching closely to see if Wolfowitz can successfully integrate the core standards into the Bank’s activities.
The 7th edition of the World Social Forum brings the world to Africa as activists, social movements, networks, coalitions and other progressive forces from Asia-Pacific, Latin America, the Caribbean, North America, Europe and all corners of the African continent converge in Nairobi, Kenya for five days of cultural resistance and celebration. Event includes panels, workshops, symposia, processions, film nights and much more. January 20-25.
Events related to the international financial institutions include:
- January 21: IMF Shrink It or Sink It Campaign: An Introduction (50 Years is Enough); The World Bank in Africa (BIC); Cut Funding to the World Bank (Kenya Debt Relief Network);
- January 22: Impact of IMF & World Bank on Livelihoods (Action Aid International); Impacts of Asian Development Bank-funded projects on small scale farmers (Advancing Public Interest Trust); the African Development Bank and the “Big Infrastructure” Agenda in Africa (BIC); The World Bank, a never-ending coup d’etat (Comite pour l’Annulation de la Dette du Tiers Monde); The IFIs and the environment (Jubilee South); Where next on the IMF? (Kenya Debt Relief Network)
- January 23: Impact of IFIs on Education Rights (Action Aid International); Workshops and Skillshare on European Investment Bank in Africa (Friends of the Earth International); How to redesign the international financial architecture (Social Watch)
- January 24: Towards a global movement for the reform of international institutions (Ubuntu – World Forum of Civil Society Networks)
Find a complete schedule of events on the WSF website: www.wsf2007.org
World Bank Governance and Anti-Corruption Strategy: comments accepted through January 26, 2007. World Bank.
Comments accepted on IFC Environmental, Health, and Safety Guidelines (EHS) Guidelines through February 27, 2007. International Finance Corporation.
New World Bank website enables students and researchers to share research and papers. World Bank.
New World Bank paper analyzes influences of China and India. World Bank. “Dancing with Giants” examines the rapid growth of these two countries, considering international trade, industrialization, foreign investment and capital flows. It also discusses how the two countries have tackled poverty, inequality and governance issues.
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BIC’s Commitment to Transparency and the Environment
As an organization committed to the highest standards of transparency, BIC undertakes to be open about its activities and operations. To that end BIC has voluntarily adopted a transparency policy, which requires the organization to disclose financial and budgetary information on its website and respond to information requests regarding the organization's operations.
BIC furthermore recognizes the importance of operating in an environmentally conscious manner. To this end, BIC has adopted procedures for offsetting carbon dioxide emissions generated by air travel of its employees. BIC also seeks to minimize its impact on the natural environment in its daily operations by purchasing goods that are produced in an environmentally-sustainable manner and from businesses which are committed to international labor and human rights standards.
Now hiring Asia and Middle East/North Africa Program Managers!
Help BIC promote transparency, accountability, participation at rights at the international financial institutions. BIC is seeking experienced and dynamic candidates for two positions: Asia Program Manager and Middle East/North Africa Program Manager.