Flawed conditions: the impact of the World Bank's Conditionality on it's developing countries
By Gino Brunswijk
The World Bank exerts enormous influence over the economies of developing countries through loan conditions, advisory services, technical assistance and policy blueprints. Conditions are significant because they tend to lock in a donor-driven reform agenda in recipient countries. Loan conditions are part of the World Bank’s Development Policy Financing (DPF) and have long been criticised by civil society, academics and developing country governments. They undermine borrower country ownership and restrict policy space, and all too often they have harmful impacts on the lives and livelihoods of people, especially the world’s poorest and most vulnerable.
Our new briefing aims to shed light on the extent to which the World Bank advances its own policy agenda through its conditionality.
News & reports
New preliminary aid figures released by the Organisation for Economic Co-operation and Development (OECD) show spending in 2018 fell by 2.7 per cent compared to 2017, with the neediest countries being hit hardest. Last year’s Official Development Assistance (ODA) for all OECD’s Development Assistance Committee (OECD DAC) members equaled 0,31 per cent of gross national income, less than half of the 0.7 per cent longstanding spending target – a commitment made almost half a century ago.
World Economic Outlook: Eurodad warns that new debt crises could derail the sustainable development goals
The new World Economic Outlook indicates that the world economic situation is deteriorating. Many poor countries have already been struck by debt crises. Eurodad, a major network of European civil society organisations working on development finance, warns that progress against the sustainable development goals could be derailed or even reversed. Poverty and inequality could rise, if no counter measures are taken.
On Friday 5 April, David Malpass was selected as the new president of the World Bank Group. Mr. Malpass was the only candidate for the post, after having been nominated by US President Donald Trump. In this response you can read the reaction of Eurodad's Policy and Advocacy Manager, María José Romero.
While the IMF cautions against the fiscal risks of public-private partnerships (PPPs), the institution is simultaneously backing them at a country programme level and advocates austerity measures that push governments towards expanding PPPs through constrained budgets.
In a valuable step forward to support human rights compliant economic policy-making, the UN Human Rights Council (HRC) called on 21 March for governments and intergovernmental organisations to make use of new UN guidance when developing economic reforms. The EU and its member states need to step up their game.
Transparency of debt information is good for everyone. It gives lenders more certainty about the basis upon which they are lending, it gives borrowers lower interest rates, and it allows citizens to subject lending and borrowing by their governments to more scrutiny, including through holding public debt audits into borrowing and lending decisions. Such scrutiny is vital to ensure loans to governments are used well so that the Sustainable Development Goals can be met. Transparency is primarily the responsibility of borrowing governments, and lenders should only be willing to give loans to governments that are willing to disclose that the loans exist.
The need to mobilise private finance is at the heart of international discussions on how to finance the sustainable development goals and move the needle from ‘billions’ of dollars in development aid to ‘trillions’ of dollars in investment (World Bank, 2015). With an estimated SDG financing gap of $2.5 trillion a year in developing countries alone (UNCTAD, 2014), the international development community is placing an increasing emphasis on blended finance.
The use of private financing for public services has rapidly grown over the past 25 years, in both the global north and global south, with governments increasingly choosing private investment in infrastructure as a means of keeping down debt.
How delivering education through public-private partnerships risks fueling inequality instead of achieving quality education for all
A growing body of evidence shows that education public-private partnerships (PPPs) which support private schooling are too often failing the most vulnerable children and risk deepening inequality. Despite this, the World Bank has been increasingly promoting education PPPs in poor countries through its lending and advice.
Registrations for the Eurodad International Conference 2019 in Ljubljana, Slovenia are still open. Early bird discount tickets can be purchased until 15 April. Registrations will close on 30 April.
This newsletter has been produced with co-funding from the European Union, Bread for the World and Norad. The contents of this publication are the sole responsibility of Eurodad and can under no circumstances be regarded as reflecting the position of the funders.