IFC hotel investment: “corporate welfare”

13 September 2011

The International Finance Corporation (IFC), the World Bank’s private sector arm, has approved a $26 million loan to Saudi Arabian prince Al-Waleed bin Talal to build a luxury hotel in Ghana. The prince is estimated by Forbes magazine to have a net worth of $19.6 billion, making him the world’s 26th richest person. Bruce Rich, a US public attorney and campaigner, said that “unfortunately, the IFC has financed numerous four and five-star hotels in the world’s poorer countries for years. … Prince Walid and the patrons of a luxury international hotel appear to be what the IFC views as the ‘poor and vulnerable’ deserving of international corporate welfare.”

The IFC claims that the hotel will have “strong developmental impact in Ghana” through employment creation. However, David Hunter, a law professor at American University, said it will only create some temporary construction work and low-paying service jobs, with the profits going overseas: “Where is the value added for the poor? It is a pretty weak form of development.”