The year 2023 marks the 75th anniversary of the Universal Declaration of Human Rights (UDHR; see Observer Spring 2023), a document created from the ashes of World War II at the United Nations General Assembly in 1948 to lay out the fundamental and universal rights for everyone on the planet. As members of the United Nations (UN) system, the World Bank Group (WBG) and International Monetary Fund (IMF) have the same duty to uphold these universal human rights, as outlined in the Tilburg Principles; yet, the current crisis of development has once more put the spotlight on the BWI’s neoliberal paradigm and its global human rights impacts.
The “lost decade” of structural adjustment
The World Bank’s approach to human rights cannot be explored without acknowledging the human rights consequences of conditions still imposed through World Bank loan agreements.
Structural Adjustment Loans or Programs (SAPs), were large conditional loans made by the Bank and Fund to low- and middle-income countries which carried strict financial and budgetary obligations or required reforms oriented towards liberalisation, deregulation, privatisation and reduction in government expenditure, aligning with a neoliberal approach to economic development focused on economic growth.
Following a heavy period of Bank and Fund imposed SAPs in the 1980s primarily in Latin America and Sub Saharan Africa, which in reality caused many economies to contract, the related austerity measures were widely considered to have contributed to a “lost decade” for these continents: Heightened rates of illness due to lacking investment in public healthcare, cases of land grabbing and displacement, and a decline in rates of education, particularly amongst girls, as education was underfunded. More money was often spent on servicing debts than on funding essential public services, and economists have highlighted the extractive nature of this post-colonial era in the cycle of North-South dependency. It is estimated that trillions of dollars’ worth of commodities, resources and labour have been drained from the South, with a particular peak in periods of structural adjustment.
The insurmountable damage done by SAPs was highly publicised and evidenced in research. The Common Report by UN Special Reporter Ronaldo Figueredo and Independent Expert Fantu Cheru in 2000 noted,“These drastically austere programmes have exacted a high social and ecological price and, in many countries, the human development index has taken a dramatic plunge…the exercise of the basic rights of the people of debtor countries to food, lodging, clothing, employment, education, health services and a healthy environment cannot be subordinated.” Nonetheless, the Bank continues not to recognise its human rights obligations or have a human rights policy, and still operates a model of providing loans with ‘prior actions’ that are reminiscent of SAPs, now called Development Policy Financing (DPF; see Briefing, The World Bank and Gender Equality: Development Policy Financing).
SDGs yes, human rights still no
Since the adoption of the UN’s Agenda for Sustainable Development, in 2015, the Bank has committed to incorporating the Sustainable Development Goals (SDGs) into its work, noting that the targets were “formulated with strong participation from the World Bank Group, are fully consistent with the World Bank Group’s own twin goals to end poverty and build shared prosperity in a sustainable manner.” As a result, the Bank now houses a Human Rights, Inclusion and Empowerment (HRIE) Umbrella, which has as its objective to “increase and strengthen the understanding and application of human rights principles across the WBG’s work by funding human rights-focused, Bank-executed grants,” amongst other initiatives such as staff training. In addition, a new Environmental and Social Framework (ESF) developed in 2018 applies to all Investment Project Financing (IPF), with the goal of “enabling the World Bank and Borrowers to better manage environmental and social risks in projects and to improve development outcomes in client countries.”
These attempts of human right alignment have nonetheless yielded little results. The Bank’s ESF framework does not apply to DPF lending, leaving the bulk of the Bank’s lending and associated ‘prior actions’ effectively blind to human rights impacts – particularly women’s rights. Philip Alston, former UN Special Rapporteur on extreme poverty and human rights, brought to light the Bank’s deficit in human rights in 2015, describing the institution as a “human rights free zone” and stating that the Bank was leading a “race to the bottom” on human rights (see Observer Winter 2016).
A Roadmap to rights?
Amidst the current context of polycrisis and record numbers of countries in debt distress, the chorus of calls for reform of the international financial architecture is growing. The World Bank has a unique opportunity to alter its approach to human rights in the ongoing Evolution Roadmap process. However, the Bank, now led by former Mastercard CEO Ajay Banga, believes the answer lies in mobilising private finance and lending more under the ‘Cascade’ approach (see Observer Summer 2017), despite the wealth of evidence warning against it. The Bank renewed its enthusiasm for public-private partnerships (PPPs; see Observer Autumn 2022) at the June Paris Summit, much to the dismay of human rights defenders and public finance experts.
The recent global pandemic laid bare the essential role of publicly-funded services, including health and social care, education, and the importance of maintaining universal protection schemes, most notably for women (see Briefing, Learning lessons from the Covid-19 pandemic: The World Bank’s macroeconomic policies and women’s rights). The World Bank Group has been repeatedly criticised, including by UN human rights experts, for the harms caused by its investments in for-profit social services, including healthcare and education (see Observer Summer 2022). The increased financialisation of public goods under this approach erodes basic human rights, such as the right to safe drinking water and sanitation, the rights to food, adequate housing, development and a healthy and sustainable environment.
A July civil society briefing, endorsed by over 70 organisations and individuals, urged the Bank to adopt a human rights policy in its evolution process, including ex-ante and ex-post assessments of its lending and privatisation impacts, as well as an accountability and remedy framework for past evidence-based harms generated by the Bank’s operations. Gender activists also called for the Roadmap to meaningfully mainstream a women’s rights lens into the Bank’s operations including macroeconomic policies, and address the gendered harms of the ‘race to the bottom’ encouraged by the Cascade approach (see Observer Summer 2023).
Economic decisions and policies are inherently tied to human rights because they relate to prioritisation of essential needs and reflect power dynamics that impact civil political rights and redirect state resources. Therefore, World Bank policies are not technocratic processes. This invites a complex discussion about accountability of international financial institutions under international human rights law that – as civil society has been arguing for decades – requires reform to reflect the overdue evolution to a post-colonial economic system fit for the immense challenges of the 21st century, and for the Bank to recognise its international human rights obligations.
