Questions raised over World Bank post-conflict work

21 July 2003

After the row over forestry issues (see Update 33) the Bank has been caught in a new political storm in Cambodia after cancelling $6.3 out of an $18 million loan for the demobilisation and reintegration of soldiers. The Bank said a project contract “had been awarded to a company that was subsequently found to have not met the specified requirements of the bid documents”. Meanwhile the Bank is criticized for refusing to back disarmament.

A Financial Times report said the misprocurement in Cambodia was related to the purchase of motorcycles which were to be allocated to former soldiers as part of the demobilisation package. It said this programme “has been dogged by controversy and corruption allegations almost from the start”. Critics of the scheme say that “many men listed for ‘demobilisation’ had returned to their villages years ago, and had not collected any army salary, even if their names remained on the payroll … more names were added to the rolls after donors indicated the largesse that awaited former soldiers”.

Politicians in Cambodia, who face imminent elections, wrote to the Bank to ask for clarifications and called for a transparent investigation, adding that “If the World Bank does not try to prevent this public review of the process from being undermined by corruption and bad faith, the Cambodian demobilisation program will be a farce.”

The Bank has funded or is funding similar demobilisation and reintegration programmes in many countries, for example Angola, Eritrea, Ethiopia, Chad, Sierra Leone and Bosnia. In Cambodia the government agreed to demobilise 15,000 troops in 2001, then another 15,000 in a second phase due to be completed before the end of last year. But a failure to promptly deliver the accompanying packages, which include a cash equivalent of US$ 240, motorbikes, sewing machines and other household goods, resulted in the second phase of demobilisation stalling.

Walking a fine line

Meanwhile the coherence of the role of the World Bank in peace building in conflict-affected areas is being questioned. Robert Muggah, a researcher for Small Arms Survey asks in an article published by id21 before a recent UN meeting on small arms proliferation why the World Bank is not involved in disarmament programmes in post-conflict countries.

One of the policies guiding the Bank’s operations (OP 2.30) prohibits the Bank from “providing direct support for disarming combatants”. The policy says this is not the role of the Bank because “it is not a world government”. The World Bank considers disarmament the mandate of other UN agencies. But Muggah argues that the Bank should not shy away from this disarmament and small arms control in general, as armed violence is directly hampering development. “That the World Bank is unable to directly support disarmament” says Muggah “is paradoxical and threatens to undermine the success of the [Great Lakes] regional initiative”. Muggah underlines the fact that “many governments” are reluctant to recognise small arms control as a development issue, and more broadly to regulate civilian possession or restrain local markets of small arms. The US is not named but is an obvious example, and has a greater influence than others on the World Bank.

The debate on World Bank financing of disarmament is another example of how the interrelation between the Bank’s work and other issues crucial to development can lead to pressure for the institution to expand its mandate while it is already overstretched. Many critics claim that the Bank should do less rather than more, and that it has already encroached too much on the mandate of other UN agencies. However conflict prevention and reconstruction can be considered a core mission of the Bank. In the late 1990s the Bank notably agreed to finance landmine clearance which it compares to “other types of land preparation for development activities”.