The World Bank convenes its Annual Meeting this week in Washington DC to discuss how it can best raise the standard of living for the world's poorest inhabitants. Much will be said about bringing roads, electricity and infrastructure to underdeveloped regions. But how committed is the World Bank to the planet as a whole when it is doling out its loans?
The World Bank has been a dominant force in global development, not just through the tens of billions of dollars it injects each year into the global economy, but because of its mission to reduce poverty, raise gender equality and reverse climate change. Such goals are foreign to an investment culture that thrives on deregulation and privatization of vanishing resources. This is what makes this moment so important. Leaked reports reveal that the World Bank's leaders are now considering abandoning its long established loan standards -- known as Social and Environmental Safeguards -- in an effort to compete with a new wave of extremely powerful development banks in Brazil, India and China.
Two global issues underscore the urgent need for the World Bank to hold the line, and even strengthen its lending criteria. First, the social unrest caused by spikes in food prices during the recent global financial collapse in Haiti, Nicaragua, Egypt and elsewhere. Second, is the rise of atmospheric temperatures that threaten life as we know it.
These are big, global issues that demand global leadership from the World Bank. Their lending safeguards can become, in essence, the investment rules for the new economy we need. While it may be unable to compete with larger banks for sheer financial clout, the Brazilian and Chinese Development Banks still look to the World Bank to set the bar on socially and environmentally responsive lending. This can include supporting projects that account for climate impacts and help to lessen the shocks of volatile global food supplies.
Food and agriculture are already investment priorities for the World Bank and its private sector arm, the International Finance Corporation. There is no shortage of policies the Bank could adopt to address food security, combat poverty and promote ecological agriculture. Helping governments establish grain reserves as buffers against rising food prices, determining loans on commitments to biodiversity protection, investing in non-polluting but high-yield farming techniques are a few.
Unfortunately, the little we read in the public record about recent World Bank agricultural investments is unsettling. Agribusinesses often receive loans directly or indirectly to drive people off their land, clear tropical forests and establish livestock grazing, palm oil or soybean plantations or industrial farms that export cash crops like biofuels and cattle feed. The poster child for such agribusiness land grabs is the Dinant case in Honduras. In this instance, the World Bank loaned one of Honduras' wealthiest agribusiness corporations $30 million (and even more through a financial intermediary) to expand its palm oil plantation empire. This was despite a known history of human rights abuses by Dinant and a campaign to force peasants from their land. The World Bank's own Office of the Compliance Advisor/Ombudsman issued a report condemning the organization's role in this travesty. The Dinant loans were approved with Safeguards in place. It is hard to imagine how low the bar may fall if social and environmental standards disappear altogether.
The need to build a climate resilient and food secure economy is upon us. The timeframe is tight and dollars are precious. The World Bank exists because of the funding of some of the world's most powerful governments -- the US Congress is the World Bank's largest guarantor. While the average citizen may be unaware of the importance of this week's events, international development banks and government agencies like US AID and its equivalents are surely watching.
Procedural rules that govern the flow of money -- rather than the money itself -- can have the most critical on the ground impact on human and ecological health. If the World Bank squanders this opportunity to uphold its responsibilities as global citizen, it's time for American citizens to ask that Congress to put our taxpayer dollars to better use.
This was written with Randy Hayes (Foundation Earth)