Another day, another IFC scandal

9 April 2024

Apollo Hospital, Dhaka, 2014

Apollo Hospital in Dhaka, 2014. Credit: Aashaa

The International Finance Corporation (IFC), the World Bank’s private sector arm, seems unable to escape scandal these days. A December 2023 exposé published by the newspaper The Telegraph detailed how an Indian multi-billion-dollar private hospital group, Apollo, which has received £120 million in IFC investment since 2005, has allegedly been running a ‘cash for kidneys’ programme facilitating illicit organ trade between Myanmar and India.

According to The Telegraph, in 2017 the IFC reported that funds to Apollo were being used for provision of hospital services for “low-income patients” in India, and at the time of The Telegraph’s writing in December 2023, £51 million was still invested in Apollo. The article noted that, while an IFC spokesperson had condemned the findings and stated that IFC would not support such practices in its investments, it was yet to respond to civil society calls for an immediate and independent investigation.

This most recent exposure of harmful human rights breaches within IFC-funded projects sits at the top of a growing pile of similar cases. The now infamous Bridge International Academies scandal (see Observer Winter 2023) included child sex abuse in a chain of for-profit schools in Kenya, from which the IFC exited in 2022 without providing remedy (although, as of January 2024, the Bank’s board met to discuss a management ‘action plan’ for remedy). More recently, a June 2023 report by Oxfam International found that the IFC was amongst a group of development finance institutions that funded expensive, for-profit private hospitals that deny service to, bankrupt, or even detain patients who cannot pay, and that the IFC lacks transparency in its investments and has been involved in questionable flows of taxpayer money into tax havens (see Observer Winter 2023).

These scandals should prompt us to reflect on how appropriate it is to use development finance for private hospitals...It is an issue of health justice that goes beyond the single scandal.Marco Angelo, WEMOS

Marco Angelo, of Netherlands-based WEMOS, commented on the case, “These scandals should prompt us to reflect on how appropriate it is to use development finance for private hospitals. Most hospitals where the IFC invests are catered to privately insured patients. This means that these hospitals often concentrate scarce health system resources – such as health workers – to the service of the rich, with harmful consequences for both cost and availability of services for everyone else. It is an issue of health justice that goes beyond the single scandal.”

The fact that these cases concern the Bank’s private sector arm brings into question the legitimacy of the private sector as development actors, which the Bank is pushing further in the context of its Evolution Roadmap. Especially given plans for a ‘bigger bank’ (see Observer Spring 2024), the erosion of independence of the CAO amidst alleged retaliation against whistle-blowers risks the Bank setting a concerning precedent when hard evidence of human rights abuses is exposed (see Observer Winter 2023).