In 1997 the IFC commissioned a welcome review of its objectives following pressure from NGOs and some Executive Directors who argued that it emphasised deal-making in response to the private sector at the expense of any clear focus on poverty alleviation or environmental protection. The Corporation commissioned consultants to interview clients and a few other stakeholders and to advise on a new strategy. In May IFC management produced an internal document IFC: Beyond 2000, which will be soon considered by the IFC board. The plans are sadly lacking in vision and innovation and represent only a slight tinkering with the existing IFC approach.
Rather than flesh out a clear view of what development contribution the IFC is supposed to provide, and how it should select projects which will maximise social and environmental gains, the Report emphasises ways to expand IFC operations as currently conceived, using narrow volume-based performance indicators to guage impact. Beyond 2000 is reminiscent of pre-Wapenhans Report World Bank documents, assuming that the maximising the volume of IFC activities equates with maximising development impact, with no need to examine results on the ground. Although vague promises are made to produce country scorecards most of the document’s logic and conclusions contrast markedly with James Wolfensohn’s public speeches and Strategic Compact reforms, and with the UK White Paper and the international development targets.
Beyond 2000 obscures the most important dilemmas facing the Corporation such as:
- the subjectivity of assessing what projects private companies are prepared to pursue without IFC backing;
- the pressure for IFC staff to raise transaction size and take stakes in projects which will generate income at low risk, and;
- the extent to which the IFC can better use its leverage to raise social and environmental standards of companies it backs.
In sum the document fails to put poverty at the centre of the IFC‘s mission, does not clarify how ground-level impacts will be measured and does not recognise the Corporation’s advantages and responsibilities as a publicly-owned institution.
A fuller briefing on IFC reform issues in general and the Beyond 2000 proposals are available from the Bretton Woods Project.