Questioning the value of the World Bank: Can it change?
Today the World Bank and the IMF (International Monetary Fund) will turn sixty.
Created at a conference of twenty-nine countries held in Bretton Woods, New Hampshire in nineteen forty-four they were originally focused on helping rebuild Europe but have since taken on an increasingly global role. But from their creation, both organizations have been undermined by ideological tunnel vision about how the world, its countries and its peoples should function.
After sixty years, development specialists, economists, environmentalists, and some governments have concluded that the results of World Bank and IMF policies have been severely lacking. Their failures have included policies that have left some of the poorest countries deeply indebted and virtually unable to use certain government and business strategies - strategies that countries like Canada used to grow and prosper when we were developing.
What's more, by forcing developing country governments to do what the Bank and Fund say rather than what their people want, they have actively undermined democracy and accountability in the poorest countries.
Moreover, when confronted with these failures they are reluctant to change.
One recent example is the World Bank's Extractive Industries Review process. Launched in 2000 by World Bank President James Wolfensohn, the review was to identify how and under what conditions, World Bank investments in oil and mining have contributed to poverty reduction. It was designed, implemented and led by the Bank. The review concluded that the Bank needed to introduce several concrete changes in its policies towards oil and mining investments to help the poor including focusing on good government and making sure that affected communities had a say in projects. The World Bank’s response to the review has been to all but disown its conclusions, joining recent reviews of dams and adjustment that have been essentially ignored by the Bank.
Canada has not yet made public its reaction to the review even though representatives from Natural Resources Canada, Finance Canada and CIDA have all been following it.
At sixty years of age, more and more people worldwide are asking whether it's time for the World Bank and IMF to retire. Canada allocates approximately 320 million dollars to the World Bank and IMF. That’s almost 12 percent of our international development assistance budget.
We think it is time the Government of Canada seriously review whether it is doing all it can to push for fundamental reform of these organizations.
Prime Minister Paul Martin has considerable personal experience with the Bank and the Fund from when he was Finance Minister. This fall’s International Policy Review is a key opportunity for the government and Canadians to review the past failures of these organizations. It’s also a chance to reflect upon the growing cynicism surrounding the Bank and Fund's ability to change.
For Commentary, I’m Michael Bassett in Ottawa.
Audio can be found at www.cbc.ca/commentary