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World Bank criticizes
itself
By Emad
Mekay
WASHINGTON - Activists are urging the
World Bank to adopt recommendations made in an
internal report that strongly criticizes the
Bank's global operations and calls for major
changes. The World Bank's Operations Evaluation
Department (OED), the independent auditor within
the bank, said in a report released late last
month - but which received little media attention
- that the institution needs to improve its
project selection process and global portfolio.
It also urged the giant lender to exercise
better governance and management of individual
programs. The report, "The World Bank's Approach
to Global Programs", says the Bank's strategy is
"poorly defined" and that the voices of developing
countries remain "inadequately represented",
adding that there is a pressing need for
independent global program supervision.
Activists who have long criticized the
Bank for being dominated by the world's richest
nations welcomed the report as validation of their
concerns that the massive lender has financed
development disasters in numerous countries. "I
think that some of the things that the report says
are long overdue and that somebody should have
said them," said Aldo Caliari of the
Washington-based Center of Concern. "I wasn't
expecting it to go that far though."
Watchdog groups say the internal report is
an invitation for the Bank to lead by example and
improve its performance in several key areas,
especially the decision-making process at the
highest levels. "The Bank and its major
shareholders should also consider how the report's
recommendations apply to the governance of the
World Bank itself," said Manish Bapna, executive
director of the Bank Information Center, a
Washington-based non-governmental organization.
Bapna said the report underscores the
disconnect between developed and developing
countries in addressing some of the most pressing
global challenges, including representation of
poor nations on the boards of the World Bank and
its sister institution, the International Monetary
Fund (IMF). "Unless developing countries are more
actively represented in these international fora,
recommendations emerging from these global
programs may often fall on deaf ears," he said.
"As a logical first step, a radical restructuring
of the board that increases the voice and vote of
developing countries at the Bank seems appropriate
and long overdue."
The Operations
Evaluation Department evaluation reviewed 26 of
the 70 Bank-supported global programs, including
Roll Back Malaria; the Global Forum for Health
Research; the Global Fund to Fight AIDS,
Tuberculosis and Malaria; the Global Environment
Facility; and the Consultative Group on
International Agriculture Research, a food
security initiative.
The programs have
targets like the reduction of emission of
ozone-depleting substances and carbon dioxide, and
conservation of biodiversity. They are called
"global" because they are best conducted at the
international level, and complement the Bank's
country-level activities.
The OED, which
reports to the Bank's board of directors, found
that evidence is lacking that these programs are
"generating and disseminating new knowledge,
building capacity, and improving donor
coordination more efficiently or more effectively
than Bank country programs". While acknowledging
that governance and management of multi-country
programs are improving, it says that unclear
objectives, roles and responsibilities weaken
their accountability.
The report urges the
Bank to develop a financing plan for high-priority
programs with donors and UN agencies and the
governments of developing countries. The plan
should provide "genuine global public goods" like
new policies, technologies, and practices of
benefit to the poor. "Focusing on the Bank's role
and effectiveness in global program partnerships
will allow the Bank to work with its partners to
implement a global strategy and financing plan
focused on sustainable poverty-reducing growth and
on genuine global public goods of benefit to the
poor," said Gregory K Ingram, director general of
Operations Evaluation for the World Bank.
The report also reviewed the Integrated
Framework for Trade-Related Technical Assistance,
the largest global free trade advocacy program. It
was created to streamline the trade-related
assistance delivered by the Bank and five other
global agencies, including the World Trade
Organization, to 49 eligible Least Developed
Countries. "Currently the program focuses mainly
on studies and provides a small amount of
follow-up technical assistance to improve the
capacity of developing countries as bridging
finance until other funding materializes," notes
the report.
Activists say that if these
major programs are faulted, then developing
countries must be especially wary of other smaller
programs managed by international financial
institutions. "You can imagine if the biggest
trade initiative on earth has all these problems,
what's left for other smaller programs," said
Caliari.
The World Bank's projects have a
major impact on many developing nations. The Bank
manages a total portfolio of US$200 billion,
including by far the largest stock of trust funds
among international organizations - some $7.1
billion at the end of 2004 - of which 64% was
committed for global and regional programs.
Countries from the Group of Seven (G7) most
industrialized nations (the US, Canada, Britain,
France, Germany, Italy and Japan) control the
World Bank and IMF and often dictate the agenda of
these institutions.
Decisions at the World
Bank and IMF are made by a vote of the board of
executive directors, which represents member
countries. But unlike the United Nations, where
each member nation has an equal vote, voting power
at the World Bank and IMF is determined by the
level of a nation's financial contribution. This
is why the United States has roughly 20% of the
vote, with the G7 holding 45%.
(Inter
Press Service) |
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