75 years after the foundation of the World Bank: successes and failures in its relationship with civil society
Since the creation of the World Bank (WB) in 1944, with the aim of facilitating and promoting reconstruction and post-war development, the purpose of the institution has been changing over time, adapting to new realities and international contexts . Today, on its 75th anniversary and positioned as “one of the main sources of financing for the eradication of poverty through an inclusive and sustainable globalization process,” the Bank has new challenges that include, among other things, its framework of relationship with civil society, which although it has been strengthening in recent decades, still has huge outstanding issues.
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Over time, the reformulation of the World Bank’s purpose brought new institutional practices, including the incorporation of civil society as a valid counterpart not only in relation to the internal governance of the institution but also as a party consulted at the time of planning the projects.
Thus, as a result of the growing closeness of the work areas of the World Bank and of many Civil Society Organizations (CSOs), as well as the deep commitment of an increasingly organized civil society, the Bank began to open, little by little. , new ways of participation and involvement of CSOs both in the construction of policies and in the administration of projects.
In this way, there has been a paradigm shift, which went from being institutionally focused and merely consultative to a model that works in conjunction with CSOs, focused on specific issues. For example, their more active participation in the elaboration of the Strategies of Assistance to the Countries (EAP) and the documents of strategies to fight against poverty, among others.
On the other hand, many CSOs have also changed their position regarding the World Bank’s role in society and have decided to work in an articulated manner. The majority of CSOs that interact with the Bank are currently adopting an “positive intervention” approach, which aims to influence the Bank’s decisions; rather than adopt an essentially confrontational position. Even so, it should be clarified that a large part of civil society maintains its critical and supervisory stance vis-à-vis the World Bank projects, especially in relation to those Bank-financed infrastructure projects that have major socio-environmental impacts.
The strengthening of the dialogue between civil society and the World Bank has been reflected both quantitatively and qualitatively. Quantitatively, for example, with the increasing active participation of CSOs in the Annual and Spring Meetings organized by the Bank, and in the increase in policy dialogue sessions within the framework of the Forum on Policies related to Civil Society (which it was organized for the first time in 2009 where 300 representatives of civil society organizations from more than 30 countries participated). In turn, qualitatively the spectrum of participation was broadened by bringing different sectors such as youth associations and also incorporating agenda items such as food security and health, among others.
It should also be noted that, in order to promote this strengthening in a transversal way to the entire institution, the World Bank has coordinated efforts with the International Development Association and other members of the World Bank Group, such as the International Finance Corporation (IFC), the Multilateral Investment Guarantee Agency (MIGA), which provides political risk insurance for projects in various sectors of countries, developing members and the International Center for Settlement of Investment Disputes (ICSID), an institution responsible for arbitrating a solution to disputes between governments and nationals of other states that have invested in that country.
In this way, it can be seen that in the course of the last decades and as a consequence of a greater openness on the part of the institution, but more than anything due to the increasing pressure and demand coming from civil society, demanding greater participation in decisions and Bank actions, a process of strengthening relations between the World Bank and civil society has been evidenced. However, there are still important shortcomings and issues still to be resolved in the relationships of these actors, which is currently reflected in the disagreement of a large number of CSOs regarding the Bank’s actions in a series of related agendas, especially to the protection of the environment and human rights, and the responsibility of the institution in this regard.
The revision of the Environmental and Social Framework of the World Bank and the criticisms of civil society
Precisely, one of the most recent criticisms of the World Bank from civil society has been the recent revision of the Institutional Environmental and Social Framework and what much of civil society considers as a clear weakening or dilution of the safeguards framework and social and environmental standards of the institution. The reasons for this weakening follows a trend at global, regional and national levels and responds to the need to make the Bank more competitive, in an international context of loss of competitiveness vis-à-vis other emerging financial actors.
Thus, for example, the Comparative Analysis of the regulations of the International Financial Institutions present in Latin America carried out by the Regional Group on Financing and Infrastructure (GREFI) of which Fundeps is a part, highlights the way in which World Bank investments have been recently made less competitive against new emerging actors such as the Development Bank of China, for example. Likewise, the report carries out a comparative analysis where it can be seen that environmental and social standards turn out to be more lax in emerging financial actors, which to a large extent allows them to become the first sources of financing for National States, displacing traditional institutions such as the World Bank or the IDB, which have more robust standards and, therefore, imply greater costs and delays for national governments.
Given this situation of loss of competitiveness by the World Bank, the Bank’s Social and Environmental Framework recently reviewed and in force in 2019 is considered by some civil society organizations as flexible against some fundamental issues that would put the environment and rights at risk Humans from the villages of the member countries. For their part, CSOs have expressed reservations about the review of safeguards that practically did not take into account their recommendations. Also, CSOs have denounced that the new MAS lacks a human rights approach and does not take any reference of international standards in the matter.
On the other hand, the main criticism towards the work of the World Bank, regarding this context of competitiveness, is the exclusion of due diligence by the bank by granting the possibility to borrowing governments to request to use their own safeguards systems to national level transferring responsibility for the correct application of safeguards to governments and not to the bank.
In this way, it can be concluded that the World Bank faces great challenges as a financial institution to remain competitive in the face of new emerging institutions and, in turn, incorporate the demands of civil society effectively and effectively. Thus, improving the relationship of real participation with civil society in an increasingly complex context, without weakening its socio-environmental regulatory frameworks, continues to be a latent challenge for the World Bank within its 75 years.
New analysis on regulations in development institutions present in Latin America – Fundeps