ORIGINAL FRENCH ARTICLE: Quand l’argent de la Banque mondiale détrousse les peuples
by Damien Roustel
Translated Thursday 4 June 2015, by
Oxfam and a dozen other NGOs publish a report on the real cost: human, social and environmental; of a certain number of projects financed by money of a subsidiary of the World Bank, which is supposed to fight against poverty in emerging countries.
The World Bank gives lessons on the management of public finance… It is in the worst possible position to do so. The organisation, which is charged with encouraging liberal politics in third world countries, delegates the application of development funds to hedge funds or the International Finance Corporation (IFC). And then, it shuts its eyes to the social damage strewn, the environmental destruction, private monopolies and the violence of police repression which follows. See no evil, hear no evil, speak no evil... the adage of the three monkeys are the words of wisdom which guide the World Bank. The humanitarian association Oxfam denounces the complete obscurity which covers 94% of the IFCs high-risk investments and outlines their consequences. Take four examples: Guatemala, Cambodia and Laos, India and Honduras. Big profits in sight..?
Oxfam has struck again
Three months after the release of an enquiry which revealed the richest 1% possess more than the remaining 99% of the world’s people combined, the international confederation of 17 organisations, which works across 90 countries to fight against poverty, published a new crushing report on April 2. With the aid of almost a dozen other organisations, like Global Witness, Equitable Cambodia and also Madre Selva, Oxfam begins to lift part of a very thick veil from the use of money loaned by a subsidiary of the World Bank to private financial intermediaries (commercial banks, investment funds and hedge funds) in emerging countries for development projects supposed to reduce extreme poverty.
Titled “The Suffering of Others” this document tries to trace, despite the lack of information, the transit of the dollars paid by the International Finance Corporation (IFC), the most important world institution for development aid. From June 2009 to June 2013, the IFC disbursed 36 billion dollars of loans. A relatively considerable sum if you know it is 50% greater than direct loans from the World Bank in the health sector and three times greater than the amount directly allocated to education over the same period. The IFC justifies this decision because it considers that this method of finance “spurs economic growth” and allows it “to achieve the twin goals of ending extreme poverty and boosting shared prosperity”. Assertions that are impossible to verify, according to Oxfam which, contrarily, points to numerous human rights violations contravening the social and environmental standards of the IFC which should be followed by all intermediaries benefiting from money from the World Bank subsidiary, whether directly or indirectly.
From Laos to Honduras, passing through India and Guatemala, Oxfam gives telling examples of development aid which escapes any regulation by the IFC, despite occasional warnings by its own watchdog, which results in destruction of land, loss of livelihood, displaced populations, river pollution, repression and sometimes murder for dam construction, hydroelectric power plants or even farms.
“There is no public information about where 94 percent of the IFC’s recent high-risk investments end up”, protest Oxfam. Even though the organisation recognises the World Bank has accepted there is a problem and engaged in remedial measures, it believes these reforms are not yet sufficient.