‘Rebuilding better', but better for whom?

In March 2020 the World Bank Group pledged to provide US$ 160bn to client countries in the 15 months to June 2021. In this briefing we analyse the Bank's response and ask, given private finance's central role, who is truly benefitting from their Covid-19 response package? 

The main findings of this review are:

  1. The WBG sees its Covid-19 response as firmly linked to its long-term development vision in which global private sector finance plays a strong role.
  2. For the WBG, contraction in ‘fiscal headroom’ calls for increased private sector financing. However, diverting public resources to attracting private investment risks placing increased fiscal pressure on government finances, which are already facing immense strain due to the pandemic.
  3. The IFC, with its emphasis on creating markets and mobilising private finance, has a prominent position at all stages of the Covid-19 response. The IFC is expected to account for around one third of the Bank’s response, including in health, suggesting that private markets will be prioritised over equitable public services.
  4. Rather than supporting local private enterprises, some IFC projects have provided finance to global chains of hotels, large conglomerates, subsidiaries of international companies and international private health providers.
  5. Private finance as a source of financing for development needs to be downgraded, given the overwhelming evidence of its failure to effectively contribute to sustainable development. Greater attention is needed to more effective and sustainable means to expand fiscal space, including meeting ODA commitments, tackling tax avoidance and evasion, and an immediate cancellation of debt payments, linked to a more comprehensive approach to debt crisis resolution under the auspices of the United Nations.

Read the briefing in full