Source: http://old.brettonwoodsproject.org/art-572689
Timestamp: 2019-10-17 04:24:29
Document Index: 282179397

Matched Legal Cases: ['art-568686', 'art-571458', 'art-569966', 'art-572251', 'art-572003', 'art-568883', 'art-572265', 'art-571959', 'art-571586', 'art-570786', 'art-570766', 'art-568890', 'art-571586', 'art-571573', 'art-572246', 'art-565918', 'art-572062', 'art-566404', 'art-572280', 'art-566281']

Memorandum to the International Development Committee (Bretton Woods Project)
This submission to the UK parliament's international development committee (IDC) was originally published on the IDC website.
B. Balancing bilateral and multilateral aid - Effectiveness of the World Bank Group
In many critical areas the World Bank’s performance has been poor. An annual Independent Evaluation Group (IEG) report on the Results and performance of the World Bank Group 2012, released in December 2012, showed declining effectiveness, with the Bank's worst ratings in areas with the fastest increases in lending or extra priority, such as infrastructure and public-private partnerships (PPPs). The report from the IEG, the Bank's arms-length evaluation body, covered projects closed before end June 2012 and looked across the entire World Bank Group. Good ratings on investment loans fell from 78 per cent for 2006-08 to 70 per cent in 2009-11. "Among the projects that exited the active portfolio in FY09-11, 26 per cent were rated either satisfactory or highly satisfactory, and 44 per cent were rated moderately satisfactory", showing that even the positive ratings are driven predominantly by mediocre results.8
According to the IEG report, particularly problematic were investment loans for infrastructure and to projects in the East Asia and Pacific region, both of which saw statistically significant drops in good ratings for 2009-11. In its analysis of why things were going badly in infrastructure, agriculture, and beyond, the IEG found "overambitious project design, inadequate consultation with stakeholders, insufficient candour during supervision, and failure to follow up on problems identified during supervision missions as reasons for less-than-satisfactory achievements." However, infrastructure, and particularly large cross-border projects is an area where the Bank is planning an expansion of its work9 despite past practice showing that this is an area rife with corruption possibilities, overspending and under-delivering on results. While no one doubts that there is an under investment in infrastructure in most developing countries, the renewed focus on mega projects rather than pro-poor infrastructure, such as rural roads or low-carbon off-grid energy, is a worrying trend.
On top of this the IFC is increasingly using financial intermediaries, meaning third-party financial entities such as banks, insurance companies, leasing companies, microfinance institutions, and private equity funds. In early February the IFC’s accountability mechanism, the Compliance Advisor/Ombudsman (CAO), released an audit report that found that for this growing part of the IFC's portfolio, now over 40 per cent of the total, the IFC conducts "no assessment of whether the [environmental and social] requirements are successful in doing no harm." The CAO indicated that "The result of this lack of systematic measurement tools is that IFC knows very little about potential environmental or social impacts of its [financial market] lending." The same lack of knowledge also applies to the development impacts of the financial sector lending. Despite pressure from civil society and the CAO, the IFC has refused to recognise that there is a problem with their systems for measuring results or risks from sub-clients of the IFC’s financial sector clients.26
1https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/200437/UK_Fast_Start_Climate_Finance_Final_doc2.pdf
2 See A faulty model? What the Green Climate Fund can learn from the Climate Investment Funds http://www.brettonwoodsproject.org/art-568686
3 See various editions of the CIFs Monitor http://www.brettonwoodsproject.org/cifs/index.shtml and A faulty model? What the Green Climate Fund can learn from the Climate Investment Funds
4 See various editions of the CIFs Monitor http://www.brettonwoodsproject.org/cifs/index.shtml
5 See Climate Investment Funds Monitor 6, 26 October 2012 http://www.brettonwoodsproject.org/art-571458
6 See “False Solutions? The IFC, private equity and climate finance” Bretton Woods Project, Bretton Woods Update No. 80, 5 April 2012 http://www.brettonwoodsproject.org/art-569966
7 See “Carbon capture: World Bank’s climate actions to ‘breathe new life’ into carbon markets ” Bretton Woods Project, Bretton Woods Update No.85, 8 April 2013 http://www.brettonwoodsproject.org/art-572251
8 For a longer summary of the report please see “IEG finds declining impact at Bank, IFC”, Bretton Woods Project, Bretton Woods Update No. 84, 13 February 2013, http://www.brettonwoodsproject.org/art-572003
9 The drive for expansion of infrastructure finance is partly emanating from the G20, see more details at: “Big infrastructure, small participation: World Bank and G20 push new plans”, Bretton Woods Project, Bretton Woods Update No. 77, 13 September 2011, http://www.brettonwoodsproject.org/art-568883
10 For a detailed description of staff incentives see “Inside the institutions: World Bank staff incentives”, Bretton Woods Project, Bretton Woods Update No. 85, 8 April 2013, http://www.brettonwoodsproject.org/art-572265. Further detail of how World Bank staff respond to incentives can be found in: The Matrix System at Work: An Evaluation of the World Bank’s Organizational Effectiveness, Independent Evaluation Group, World Bank, April 2012, http://ieg.worldbankgroup.org/content/dam/ieg/matrix/matrix_eval.pdf.
11 For more details on this case please see "Getting its hands dirty: World Bank increases fossil fuel lending", Bretton Woods Project, Bretton Woods Update No. 84, 12 February 2013,
12 For more details on this case please see "Getting its hands dirty: World Bank increases fossil fuel lending", Bretton Woods Project, Bretton Woods Update No. 84, 12 February 2013, http://www.brettonwoodsproject.org/art-571959.
13 See more about the Oxfam published study of the case in this article: “Call for freeze on World Bank 'land grabs'”, Bretton Woods Project, Bretton Woods Update No. 83, 6 December 2012, http://www.brettonwoodsproject.org/art-571586.
14 See more about the Friends of the Earth published study of the case in this article: “New claims of rights abuses in World Bank-funded 'land grabs”, Bretton Woods Project, Bretton Woods Update No. 81, 3 July 2012, http://www.brettonwoodsproject.org/art-570786.
15 A May report from NGO Global Witness, Rubber Barons, details allegations of land grabbing by IFC-funded Vietnamese rubber companies operating illegally in Cambodia and Lao. See http://www.globalwitness.org/rubberbarons.
16 See “Accountability squandered? World Bank should wait for justice in Cambodia”, Bretton Woods Project, Bretton Woods Update No. 81, 22 June 2012, http://www.brettonwoodsproject.org/art-570766.
17 More detail on a study of African land grabs by the Oakland Institute is available in this article: “World Bank policies "enabling" African land grab”, Bretton Woods Project, Bretton Woods Update No. 77, 14 September 2011, http://www.brettonwoodsproject.org/art-568890.
18 More detail on a study of Latin American land grabs by the Oakland Institute is available in this article: : “Call for freeze on World Bank 'land grabs'”, Bretton Woods Project, Bretton Woods Update No. 83, 6 December 2012, http://www.brettonwoodsproject.org/art-571586.
19 See joint statement “It's Time to Outlaw Land Grabbing, Not to Make It ‘Responsible’!”, published by Focus on the Global South, http://focusweb.org/content/its-time-outlaw-land-grabbing-not-make-it-responsible.
20 See "Safe in Bank hands? World Bank safeguards review launched", Bretton Woods Project, Bretton Woods Update No. 83, 6 December 2012, http://www.brettonwoodsproject.org/art-571573.
21 For a deeper examination of the gaps in coverage please see "Initial Comments by Civil Society Organizations on the World Bank Safeguards Review", December 2012, http://www.bicusa.org/wp-content/uploads/2013/01/Initial+Comments+by+Civil+Society+Organizations+on+the+World+Bank+Safeguards+Review.DEC2012.pdf.
22 For a further discussion of gaps in coverage and recommended enhancements to the safeguards, please see "Safeguards: World Bank urged to incorporate human rights commitments "in all of its activities", Bretton Woods Project, Bretton Woods Update No. 85, 8 April 2013, http://www.brettonwoodsproject.org/art-572246.
23 http://go.worldbank.org/3M7EPD0GB0
24 See this article for more detail: “IEG calls for overhaul of World Bank's lending criteria”, Bretton Woods Project, Bretton Woods Update No. 69, 15 February 2010, http://www.brettonwoodsproject.org/art-565918.
25 Spratt, S. and Ryan-Collins, L.(2012) 'Development Finance Institutions and Infrastructure: A Systematic Review of Evidence for Development Additionality', http://www.ids.ac.uk/publication/development-finance-institutions-and-infrastructure-a-systematic-review-of-evidence-for-development-additionality.
26 For more detail on this issue please see: “IFC oblivious to impact of lending to financial sector”, Bretton Woods Project, Bretton Woods Update No. 84, 12 February 2013, http://www.brettonwoodsproject.org/art-572062.
27 Review of IFC's policy and performance standards on social and environmental sustainability and policy on disclosure of information, Compliance Advisor /Ombudsman, 2010; “World Bank performance standards review reveals need to raise the bar”, Bretton Woods Project, Bretton Woods Update No. 71 , 18 June 2010, http://www.brettonwoodsproject.org/art-566404.
28 For some outlines of the problem see: “Social accountability compromised?”, Bretton Woods Project, Bretton Woods Update No. 85, 9 April 2013, http://www.brettonwoodsproject.org/art-572280.
29 These figures are calculated using the Bank’s income-based classifications of countries. They therefore differ from the Bank’s figures, which refer to categories that do not properly reflect countries’ economic status. See: "Analysis of World Bank voting reforms", Bretton Woods Project, 30 April 2010, http://www.brettonwoodsproject.org/art-566281.
30 See “G24 Ministers call for deeper governance reforms and more tailored lending instruments for developing countries”, Third World Network, 30 April 2010, http://www.twnside.org.sg/title2/finance/2010/finance100402.htm.
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