The World Bank’s latest report on foreign investment and its new trade strategy are part of a worrisome trend that involves the Bank’s growing use of tools other than conditionality, to restrict the space for countries to pursue alternative, country-tailored development strategies.
The Multilateral Investment Guarantee Agency (MIGA), which forms a part of the World Bank Group, promotes foreign direct investment (FDI) in its 175 member countries.
A March staff paper by the IMF outlines that although trade restriction measures have increased in the wake of the financial crisis, they have only had a strong negative impact in the products they targeted, and their aggregate impact is just 0.25 per cent of global trade.
The financial crisis has divided perceptions within the IFIs about the role of the financial sector in development. While some parts of the World Bank and IMF highlight the merits of small banks, others continue to push globalised finance.
Seminar on the IEo evluation of IMF trade policy advice in Istanbul, 2 October 2009.
Excitement caused by the International Finance Corporation
Despite spin doctoring that called it a triumph for cracking down on banking bonuses, the G20 finance ministers’ statement in early September produced an accounting for how the G20 met or did not meet existing promises and little new agreement. Once again the UK government excluded critical civil society from the discussions.
The financial crisis has resulted in an expanded role for the International Finance Corporation (IFC), but its methods may leave a bitter taste with civil society.
The International Center for the Settlement of Investment Disputes (ICSID) is facing an explosion of cases and increasingly vocal criticism from Latin American countries. Questions remain over whether it helps channel productive investment to developing countries or serves as a tool for multinational corporations to get their way.
An evaluation by the IMF's Independent Evaluation Office finds that the IMF's trade policy work between 1996 and 2007 had patchy effectiveness, was "not evenhanded" and has "diminished credibility of IMF independence".