If the Abbott Government is seeking savings measures and efficiency gains in the lead up to the May budget it need look no further than contributions made to the World Bank’s private sector arm, the International Finance Corporation (IFC). Australia is a member of the IFC. The value of Australia’s paid-in capital as at 30 June 2009 was US $47.33 million.
A Treasury spiel describes the IFC as:
‘the largest global development institution focused exclusively on the private sector in developing countries. The IFC contributes to the World Bank Group’s overall poverty reduction mandate through the provision of investment and advisory services to companies and financial institutions in emerging markets to create jobs, generate tax revenues, improve corporate governance and environmental performance, and contribute to their local communities.’
The reality couldn’t be more different for those living in developing countries. According to The Oakland Institute’s 2014 report ‘Unfolding Truth Dismantling the World Bank’s Myths on Agriculture & Development’ the World Bank has supported policies to attract foreign direct investment in countries without proper institutional, social and environmental safeguards, causing land grabbing and displacement of local populations without bringing development outcomes.
It added that the World Bank ‘notably financed projects that resulted in the brutal takeover of land and resources from local communities in a number of countries , including Uganda in 2011, Honduras in 2012 and Cambodia in 2014.’
Oxfam’s April 2015 report ‘The Suffering of Others’ confirms that ‘the International Finance Corporation have caused human rights abuses , conflict and suffering of local communities.’
Oxfam is urging the Australian Government ‘use its influence as a donor to the World Bank and as a G20 member, to pressure the IFC to reform its lending to financial intermediaries, including by:
- making fewer and better investments that stick to its own social and environmental standards;
- not providing funding through financial institutions for new projects with high environmental and social risks;
- publicly disclosing its clients and sub-projects on all investments done through financial intermediaries;
- getting projects assessed by independent parties and suspending clients if they have breached the IFC’s requirements on social and environmental protections
If the Australian Government is not prepared to adopt Oxfam’s recommendations then it should divest from the IFC and redirect that money to responsible and accountable NGOs with a proven track record of improving the lives of the world’s poorest.
