The World Bank’s $52 Billion Test

Peter Bosshard

At a meeting with donor governments in Moscow, the World Bank raised a whopping $52 billion for its fund for the poorest countries today. The governments ignored critique about the Bank’s role in degrading ecosystems and impoverishing local communities, but their decision can still be reversed. Civil society groups will have an opportunity to weigh in on whether the World Bank deserves the public support with which it just has been entrusted next year.

The World Bank needs to raise funds for the International Development Association (IDA) every three years. The $52 billion it raised today is a slightly higher amount in real terms than what it raised in 2010. While Western governments reduced their support for the IDA fund somewhat, new donors such as China made up for the shortfall.

World Bank President Jim Kim in Moscow
World Bank President Jim Kim in Moscow
Photo Credit: World Bank

President Jim Kim promised today that the World Bank would increase its efforts in “working toward gender equality, fighting climate change, and making growth more inclusive and equitable” through its IDA projects. Other people need to assess whether the fund’s health, education and other projects match this lofty rhetoric. As we have pointed out before, in the energy sector, the World Bank continues to focus on big dam and fossil fuel projects, not on renewable energy solutions that expand energy access for the poor. The biggest energy project under the current IDA round is a transmission line that will export electricity generated by the devastating Gibe III Dam from Ethiopia to Kenya. The World Bank has already identified the Inga 3 Dam, a mega-dam that will supply electricity to mining companies and export markets but leaves power-starved rural communities in the dark, as a model project for the new IDA round.

Through the Power 4 People campaign, civil society groups have called on governments to shift $1.6 billion – the share of funds that IDA has traditionally spent on destructive energy projects – from the World Bank to institutions that support clean local energy solutions for rural communities. We have sent letters to governments and organized an online action to support this appeal. When the government delegates arrived for their meeting in Moscow earlier this week, they were welcomed by a courageous protester from the Rivers without Boundaries coalition who asked for donations for mega-dams in a Santa Claus costume. An opinion piece in the Moscow Times and other activities by partner groups around the world supported our action.

A protester at the World Bank's fundraiser
A protester at the World Bank's fundraiser on December 16, 2013
Photo Credit: Greenpeace Russia

For now, the civil society call has fallen on deaf ears and the World Bank has achieved its fundraising goal. Next year, parliaments will have to approve the financial pledges which their governments made in Moscow. By then, the World Bank will need to turn its lofty rhetoric into practice. We will be able to judge whether its new energy projects heed the lessons of past mistakes or follow a business-as-usual approach, whether the Bank prioritizes the demands of energy-intensive industries or the needs of poor rural communities, whether it focuses on mega-dams and fossil fuels or the clean local energy solutions of the future.

At a time when an exciting range of climate-friendly energy solutions is available, we can put the World Bank’s $52 billion fund to the test. With every project decision it makes the Bank will tell parliaments and the public at large whether it deserves the support that governments have just pledged. Civil society groups should work with parliaments to hold the Bank to account.

Tuesday, December 17, 2013