In October, Publish What You Fund (PWYF) released its What Works report – an update to its April Crowding in publication. While the World Bank redoubles its faith in the faltering ‘billons to trillions’ agenda (see Dispatch Annuals 2024), the report raises additional doubts about the success of private capital mobilisation (PCM) efforts to date. The findings also contradict claims by the International Finance Corporation (IFC), the World Bank’s private sector lending arm, and other Development Finance Institutions’ (DFIs) assertions that their resistance to disclosure of private sector investments results from private sector concerns.
Adding to skepticsim about the ‘billions to trillions’ agenda, a 30 June G20 Independent Expert Group report highlighted that, “MDBs have had PCM ratios of about 0.6 per dollar of their own commitments.”
As evidenced by the difficulty in securing a “historic” 21st replenishment of the International Development Association (IDA), the World Bank’s low-income lending arm, the World Bank and other MDBs are under intense pressure to make the ‘billions to trillions’ dream a reality (see Observer Winter 2024, Autumn 2024). Kate Geary of Netherlands-based civil society organisation (CSO) Recourse noted, “in recent years, MDB lending has grown more complex, and the more convoluted the financial product, the more obscure.” In that context, the report stressed that current PCM reporting by MDBs and DFIs remains unsatisfactory as it lacks the details required to evaluate the effectiveness of PCM strategies, and made several recommendations to address current shortcomings.
The disclosures...suggest that blanket claims of commercial confidentiality are simply inaccuratePublish What You Fund
Flawed argument exposed: private sector platforms more transparent than MDBs
According to the report, the call for methodological changes was welcomed by private investors. This is significant as MDBs and DFIs often use alleged private sector concerns to rebuff civil society calls for adequate disclosure. David Pred of US-based CSO Inclusive Development International lamented, “In the RCBC case in the Philippines, IFC refuses to disclose to the Complainants third party assessments of environmental and social harm…[which] have direct bearing on the lives of the affected communities and…are being buried under the bogus pretext of data privacy laws and client confidentiality agreements.”
The report underlines that, “DFIs are overstating the level of concern around commercial confidentiality and other disclosure constraints.” It highlights the case of loan information platorms LSEG Loan Connector and DealScan, which contain more detail than MDB reporting, stressing,“The disclosures contained within DealScan strongly suggest that blanket claims of commercial confidentiality are simply inaccurate.” Dustin Schafer of German CSO Urgewald said, “The IFC’s lack of transparency is particularly striking. For almost all of the projects supported by the Private Sector Window of the Global Trade Finance Programme, not even the recipient financial institutions or countries can be identified on the IFC disclosure website. While this lack of transparency is generally unacceptable, it is particularly so given the use of scarce IDA resources to subsidise trade finance with its questionable development impact and high fossil fuel exposure.”
The report calls for DFIs to robustly evaluate the effectiveness and implications of their PCM strategies (see Observer April 2024; Briefing, Civil Society calls for rethink of World Bank’s ‘evolution roadmap’ as part of wider reforms to highly unequal global financial architecture). Debunking the ‘confidentiality’ argument also contributes to demands for greater transparency made by organisations working to uphold the rights of, and which seek remedy for, communities negatively impacted by DFI private sector activities (see Observer Winter 2019). As Geary stressed, “without transparency, there can be no accountability. Communities adversely affected by MDB and DFI investments find it impossible to uncover who is funding the project, and so who they can to turn to for remedy. This must change – and commercial confidentiality is no excuse.”
