+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

Bretton Woods Observer Spring 2018
A quarterly critical review of developments at the World Bank and IMF

Published by BRETTON WOODS PROJECT
Working with NGOs and researchers to monitor the World Bank and IMF


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1. As World Bank signals end of extraction finance, CSOs call for end
to its other fossil fuel funding (ENVIRONMENT/analysis)
2. AIMM: Will IFC hit rights-based development target? (RIGHTS/news)
3. Tunisians take to the streets over IMF-imposed austerity
(CONDITIONALITY/analysis)
4. CSOs urge IFC to divest from for-profit school chain (SERVICES/
analysis)
5. CSOs continue to push for review of Bank’s ESF guidance notes
(RIGHTS/news)
6. The wrongdoings of the Doing Business Rankings and the corporate
take-over of agriculture (LAND/analysis)
7. IEG critical of World Bank’s progress on shared prosperity goal
(ACCOUNTABILITY/analysis)
8. The impacts of IMF-backed austerity on women’s rights in Brazil
(SOCIAL SERVICES/women)
9. #MeToo arrives at World Bank as it publishes Gender-Based Violence
Action Plan (ACCOUNTAIBLITY/news)


=====================================================================
ENVIRONMENT/analysis

As World Bank signals end of extraction finance, CSOs call for end to
its other fossil fuel funding

Summary
- WBG announced it will end finance for ‘upstream’ oil and gas
projects after 2019
- Pledge includes exception for gas projects in low-income countries
- Commitment does not apply to FI and DPL lending

The end of 2017 brought a boost for climate advocates, with World
Bank Group (WBG) President Jim Yong Kim announcing at December’s One
Planet Summit in Paris that the Bank will cease project lending for
‘upstream’ oil and gas projects after 2019. As the Bank clarified,
“upstream is an industry term that refers to exploration of oil and
natural gas fields, as well as drilling and operating wells to
produce oil and natural gas.” The Bank also announced at the summit
that it “will be applying a shadow price on carbon in the economic
analysis of all … projects in key high-emitting sectors.” This
followed the Bank’s October 2017 commitment to begin tracking the
carbon emissions of its project investments for the first time in
2018.

Alex Doukas from US-based NGO Oil Change International (OCI) hailed
the importance of the upstream pledge in a December blog, noting
“each dollar of World Bank finance currently going into oil and gas
catalyzes many more, and … many projects that get World Bank finance
would never go ahead without it. So, the finance that will shift away
from oil and gas as a result of this announcement really matters, and
will have an even larger effect than the numbers might suggest.”
OCI’s Shift the Subsidies database showed that the Bank’s upstream
portfolio is significant, amounting to “an average of over $1 billion
per year in exploration and production activity between 2014 and
2016.” The upstream pledge marked an important victory for civil
society organisations (CSOs) who have engaged in a decades-long push
for the Bank to end its support for fossil fuels.

Despite the upstream pledge being a major step in the right
direction, many challenges remain for the Bank to fully decarbonise
its lending portfolio. Firstly, the pledge will not end the Bank’s
fossil fuel project lending. The upstream pledge included an
exception for the Bank’s direct lending to low-income International
Development Association (IDA) countries, which allows the Bank to
fund upstream gas projects if they are judged to have an energy
access component and be part of a low-carbon transition strategy.
This raises questions about how stringently this exception will be
interpreted when it comes into force in 2020. Moreover, upstream
lending is only about one-third of the Bank’s fossil fuels portfolio,
according to the OCI database. Finance for pipeline projects that
bring upstream oil and gas to markets is not covered by the pledge,
for example (see Observer Autumn 2017).

Bank’s indirect fossil finance continues
---------------------------------------------------------------------
The upstream pledge also only applies to the Bank’s project lending
and does not extend to other parts of the Bank’s portfolio, such as
lending to financial intermediaries (FIs) and development policy
loans (DPLs). This is significant, as the WBG is de facto funding a
new generation of coal power plants and other fossil fuel projects
via support for FIs, as documented by CSOs in Bangladesh, India, and
the Philippines (see Observer Winter 2017-2018). To close loopholes
that allow funding of fossil fuels via the back door, CSOs have
advocated that the Bank publicly disclose and track its indirect
financing, and include an exclusion list on fossil fuel projects in
its indirect lending portfolio. CSOs have also argued that the Bank
is ‘propping up’ fossil fuels through its DPLs, which provide
fungible direct budget support to national governments. A January
2017 report from Netherlands-based CSO Bank Information Center Europe
highlighted that in Peru, Indonesia, Egypt and Mozambique, DPLs have
created incentives for coal, oil and gas investments, as part of the
‘prior actions’ (i.e. regulatory changes) required for countries to
secure these loans (see Observer Spring 2017). CSOs argue the Bank
needs to adopt a safeguard for DPLs that, inter alia, prohibits prior
actions that promote fossil fuels.

The World Bank’s ‘dirty’ guarantees
---------------------------------------------------------------------
Research by UK-based CSO E3G showed that the Bank’s Multilateral
Investment Guarantee Agency (MIGA) had the dirtiest portfolio in
terms of support for fossil fuel projects between FY14-FY16 among the
four members of the WBG. E3G found that in FY16, MIGA did not support
a single renewable energy project: “[its] guarantees to energy were
worth $1.9 billion in 2016, of which $0.9 billion went to fossil fuel
projects”, with the rest going to projects such as hydro-dams, which
often have significant environmental and social impacts. Given that
such guarantees offer financial ‘de-risking’ and provide political
legitimacy to projects, CSOs have stressed it is problematic for
MIGA’s portfolio to lean so heavily towards fossil fuels.

Climate concerns over infrastructure
---------------------------------------------------------------------
A December report published by Belgian-based CSO Counter Balance
highlighted the contradictions between the WBG’s push for a new
generation of ‘mega-infrastructure’ (see Observer Winter 2017) and
effective climate action. The report noted, “The building of planned
mega corridors would … mean locking-in the current extractivist
development model. This agenda … is largely reliant on fossil fuels,
mining and large-scale agribusiness. … [It] is fundamentally
incoherent with the fight against climate change.” Although the World
Bank is currently assisting countries with their Nationally
Determined Contributions (NDCs) to the Paris Agreement, these only
involve planning through 2030; given the decades-long lifespan of
proposed mega-infrastructure projects, governance approaches in line
with Paris’s 2050 time horizon are needed to ensure Bank-supported
infrastructure projects do not become ‘stranded assets’ that will
need to be retired to meet global climate goals (see the Bretton
Woods Project’s 2014 briefing, Multilateral Development Banks’
unburnable carbon).
Despite the substantial challenges that remain, CSOs are cautiously
hopeful that the upstream pledge can serve as a catalyst for
transforming the Bank’s wider approach to energy and climate
investments.

tinyurl.com/WBGfossils

=====================================================================
In this issue

- AIMM: Will IFC hit rights-based development target?
- Tunisians take to the streets over IMF-imposed austerity by Clara
Capelli
- The wrongdoings of the Doing Business Rankings and the corporate
take-over of agriculture by Frederic Mousseau
- The impacts of IMF-backed austerity on women’s rights in Brazil by
Grazielle David

=====================================================================
RIGHTS/news

AIMM: Will IFC hit rights-based development target?

Summary
- CSOs call on IFC to incorporate human rights-based methodology in
AIMM
- CSOs wait to see whether AIMM will apply to FI lending

At the October 2017 World Bank and IMF Annual Meetings in Washington
DC, the International Finance Corporation (IFC, the World Bank’s
private sector arm), introduced its new development impact
measurement framework, Anticipated Impact Measurement and Monitoring
(AIMM, see Observer Winter 2017-2018). The new system will replace
its Development Outcomes Tracking System (DOTS) and is to be fully
operational by 2019. Contrary to DOTS, where development impact was
only assessed three years after project implementation, AIMM will
conduct an ex-ante assessment of likely development outcomes of
proposed investments. It will also try to determine portfolio-wide
impacts, with a focus on how individual investments and the portfolio
generally perform in creating markets, a key objective of IFC’s new
3.0 strategy (see Observer Spring 2017).

Civil society organisations (CSOs) consider AIMM an important
opportunity for the IFC to address many issues raised by them and the
IFC’s Compliance Advisor Ombudsman (CAO, the IFC’s independent
accountability mechanism), including documented cases where IFC
investments have supported land grabs, displacement, loss of
livelihoods and destruction of the natural environment (see Observer
Summer 2017, Winter 2017-2018). CSOs are waiting to see whether AIMM
will apply to all aspects of IFC’s portfolio, including its
investments in financial intermediaries. As a January report by US-
based Center for Global Development (CGD) on the nature and
destination of IFC investments noted, “IFC’s portfolio is not focused
where it could make the most difference”, given that most of its
investments were in upper-middle income countries. While the IFC
responded that it is the largest investor in low-income countries
among international financial institutions, CGD noted that its
analysis was difficult due to the lack of publicly available and
user-friendly data provided by the IFC. This echoes a persistent
complaint of affected communities and their CSO partners with respect
to IFC investments.

Given the importance of AIMM in informing the IFC’s investment
decisions, civil society offered to assist the IFC to integrate a
human rights-based approach into AIMM that goes beyond narrow
projections of job creation and investment inflows. This would ensure
that IFC investments are used to attract hesitant private sector
investments to activities that bring tangible benefits to
communities’ ability to avail themselves of their economic, social
and cultural rights. This would in turn assure IFC investments are
fully in line with the Sustainable Development Goals, which resolve
to “protect human rights.”

AIMM is given additional importance by the Bank and IFC’s new focus
on fragile states and the new International Development Association’s
(IDA) – the World Bank’s low-income arm – (see Inside the
Institutions Spring 2017)  private sector window (see Observer Winter
2017). Given the challenges of operating effectively in fragile
environments, civil society has suggested that the IFC strongly
consider developing AIMM tools specific to those settings.

tinyurl.com/IFC-AIMM-HR

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CONDITIONALITY/analysis

Tunisians take to the streets over IMF-imposed austerity
by Clara Capelli, PhD. Research fellow at Cooperation Development
Network

Summary
- IMF pushed export-led growth will create low wage, low value-added
economy
- Theoretical assumptions informing IMF’s agenda must be reconsidered

In January 2018, the introduction of austerity by the Tunisian
government sparked widespread discontent. Already strained by the
difficult economic conditions and the further shrinkage of their
purchasing power between 2016 and 2017, Tunisians took to the
streets, protesting the 2018 Finance Law and the IMF’s loan
conditionality, which aims to cut the budget deficit to 4.9 per cent
of GDP. The deficit is supposed to be decreased through increases in
indirect taxation (e.g. VAT rates, and purchase taxes on several
consumer goods, including fuel and electricity) and reductions on the
fiscal burden on enterprises as well as public and private employees.

A January 2018 article published by UK newspaper The Guardian
severely criticised the IMF’s austerity agenda in Tunisia, raising
concerns about the impact of these policies on vulnerable citizens.
The IMF responded to the article on its website noting that instead
of austerity, it advocates, “well-designed, well-implemented,
socially-balanced reforms”, defending the theoretical foundations of
its neoclassical, supply-side agenda. The Fund argues that growth
will come with improved business and investor confidence, which in
turn will come once Tunisia can cut its deficits and control debt and
inflation.

Multilateral and bilateral donors have considerably increased their
presence in Tunisia, as well as their financial support to the
political transition process and development of a ‘success story’
following the 2011 uprisings. The IMF is a major actor through its
four-year $2.9 billion Extended Fund Facility (EFF) agreed in May
2016. Since the beginning, negotiations on the EFF between the
Tunisian government and the IMF have been complicated and delayed by
the unpopularity of the IMF’s austerity-inducing conditions. One
thorny issue regards public employment and public-sector wage
freezes, strongly opposed by the Tunisian General Labour Union
(UGTT).

Given the lack of progress on reforms related to public employment
and other loan conditionality, in December 2016 the IMF postponed the
disbursement of the second EFF instalment, which was eventually
approved in May 2017. The Tunisian government and Central Bank have
complied with the IMF’s request for more flexibility of the exchange
rate regime. Consequently, the Tunisian dinar has undergone a
dramatic fall since 2011, losing approximately 20 per cent of its
value against the euro in 2017. The depreciation came along with a
significant increase in the inflation rate during 2017, which hit 6.4
per cent by the end of the year.

The IMF’s call for a flexible exchange rate is based on its
presumption that a weaker currency will be a catalyst for exports.
Yet, the IMF’s faith in the benefits of this approach completely
overlooks the structure of Tunisia’s export sector as well as the
dire consequences that currency depreciation has on import-dependent
economies. In Tunisia, the export sector is primarily based on low-
wage labour, mainly consisting of low-value added manufacturing, low-
cost tourism and cheap services, such as call centres owned by
foreign companies. A significant boost in Tunisian exports is yet to
be seen, but even if they materialise, doubts remain about the number
and quality of jobs they may create. In reality, Tunisia relies
strongly on imports for consumption and hardly benefits from domestic
substitutes. While sustained export-driven growth is uncertain,
redistributive repercussions are the expected short- and medium-term
consequences of the IMF’s approach.

This policy response reveals the IMF’s poor understanding of the
Tunisian economy and inability to design alternatives to neoclassical
development policies, which prioritise supply-led fiscal stability
over decent employment and social justice. First, a small economy
hugely dependent on its economic relations with the European Union
can hardly benefit from currency depreciation if not supported by
measures that promote structural transformation and shield consumers
from high inflation rates. Second, business and investor confidence
is built upon a variety of factors, and does not necessarily lead to
sustained job creation and fairness. Third, development does not mean
social and economic engineering: the expression “well-designed, well-
implemented, socially-balanced reforms” means that austerity measures
are to be justified in the name of a mechanical view of economic
policy.

A radical reconsideration of the IMF agenda’s theoretical assumptions
– in Tunisia as well as elsewhere in the region – is more than ever
necessary to shape macroeconomic policies that effectively promote
productivity growth and decent employment.

tinyurl.com/TunisiaIMF

=====================================================================
SERVICES/news

CSOs urge IFC to divest from for-profit school chain

Summary
- CSOs call on IFC to divest from Bridge International Academies
- IFC remains investor, despite WDR’s concerns about private
education

In an open letter in early March, 88 civil society organisations
(CSOs), including the Initiative for Social and Economic Rights
(ISER) in Uganda and the East Africa Centre for Human Rights in
Kenya, urged the International Financial Corporation (IFC, the World
Bank’s private sector arm) and other investors, to cease support for
the multinational low-fee for-profit education provider Bridge
International Academies (BIA). BIA runs over 500 schools in Kenya,
Liberia, Nigeria, Uganda, and India. The letter follows an August
2017 open call by 174 CSOs for investors to cease support for BIA
(see Observer Autumn 2017). The press release documented concerns
raised by numerous independent sources, such as the UN, including,
“higher costs than those advertised by the company, failure to
register schools, use of unapproved curriculum, failure to meet
teacher certification requirements, and discriminatory impacts.” BIA
replied with a public statement claiming, “most of the reports and
evidence collated for this letter (of March 1st 2018) have been
previously rebutted.”

In late March CSOs responded to BIA’s reply, calling on investors to
review the evidence presented in the original letter and “to cease
funding any company whose actions seriously damage the right to
education and undermine domestic and international human rights law.”

The first March CSO letter criticised BIA’s “complicity in the arrest
and detention without evidence of an independent researcher” in
Uganda, and BIA’s use of, “Legal action against the Kenya National
Union of Teachers (KNUT) resulting in a gag order preventing the
union from publicly mentioning BIA while awaiting trial.” BIA’s case
against KNUT was dismissed on 20 February. The letter further
highlighted controversies in Uganda and Kenya where it stressed that
BIA has been operating schools illegally and failing to adhere to
national education standards (see Observer Summer 2016), even after
authorities ordered the closure of Bridge schools. In Kenya, BIA
failed “to comply with its Ministry of Education’s requests to
register schools”, used an unapproved curriculum, and failed to meet
teacher certification standards. This led to a court-ordered closure
of Bridge schools and numerous other court cases. In Uganda,
following 18 months of dialogue with BIA, the government confirmed in
February that BIA, “will not be permitted to open/operate this school
year (2018)” after it failed to comply with requests from the Ugandan
Ministry of Education to meet legal and educational standards. Salima
Namusobya, of ISER in Uganda commented, “Bridge has failed to meet
basic standards and deliver on their promises, and the Government is
currently closing illegal schools. Yet, the company is still
supported by investors abroad that would never accept such a
situation in their own country. Investors will be complicit in this
disaster if they do not remove their support.”

IFC defends BIA’s performance
---------------------------------------------------------------------
The IFC responded on 19 March supporting its investment in BIA,
citing, “The strong performance of Bridge pupils…, as well as
learning gains in Liberia.” Referencing the same independent
evaluation by the Center for Global Development of Liberia’s public-
private partnership school programme on which IFC’s assertions above
were based, the CSO letter stressed the evaluation’s finding that
“BIA spent more than 13 times the Government spending per student and
turned away children from schools to reduce pupil-teacher ratios, to
reach artificially improved learning outcomes, though still only
reaching low outcomes in absolute” (see Observer Autumn 2017).

While the IFC’s letter referenced the 2018 World Development Report
(WDR), it did not acknowledge the WDR’s finding that, “there is no
consistent evidence that private schools deliver better learning
outcomes than public schools.” The WDR also observed that in
developing countries, “governments may deem it more straightforward
to provide quality education than to regulate a disparate collection
of providers that may not have the same objectives.” In light of
these findings and the continuing concerns over BIA’s performance, it
is striking that the IFC continues to invest in low-fee for-profit
schools.

tinyurl.com/IFC-divest-from-BIA

=====================================================================
RIGHTS/news

CSOs continue to push for review of Bank’s ESF guidance notes

Following the release in November 2017 of the World Bank’s Draft
Guidance Notes for Borrowers (GNs, see Observer Winter 2017-2018)
that will support the implementation of its much-criticised
Environmental and Social Framework (ESF), civil society organisations
(CSOs) expressed concerns about the content of the GNs and the
consultation process generally. In a December 2017 letter to the
Bank, 29 CSOs called for the draft GNs to be “substantially revised”
in light of their “redundancy, lack of clarity, and lack of
substantive content” and for the Bank to hold a second comment
period.
The Bank has compiled CSO and other input into the draft GNs, which
it stated will be aggregated into a detailed ‘response matrix’
explaining how and why comments were or were not incorporated into
the revised GNs. The matrix will be made public within three months
of the closure of the comment period on 22 December 2017. The Bank
maintains that, as the GNs are living documents that don’t require
Board approval, no additional consultation is needed. Civil society
considers the GNs a flawed tool that provides little help to
borrowers on the implemention of the ESF.

tinyurl.com/ESF-GNs-concerns-remain

=====================================================================
Miriam Brett joins BWP as International Development Finance Project
Manager

We are pleased to welcome Miriam Brett as the Bretton Woods Project’s
(BWP) new International Development Finance Project Manager. Miriam
will lead the team’s work on developments in international
development finance, with a focus on the negative impacts of IMF
policies. Miriam previously worked as Senior Economic Advisor to the
Scottish National Party in Westminster and, prior to this, worked as
a researcher for the Scotland-based think tank Common Weal. She holds
a first-class BA (hons) in International Relations from the
University of Stirling, specialising in social justice critiques of
international financial institutions.

mbrett@brettonwoodsproject.org

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LAND/analysis

The wrongdoings of the Doing Business Rankings and the corporate
take-over of agriculture
by Frederic Mousseau, Oakland Institute

Summary
- Civil society urges World Bank to scrap DBR and EBA
- EBA harms small-scale farmers by putting corporate interests first

Under the campaign ‘Our Land Our Business’, NGOs, trade unions,
farmers’ organisations, consumer and environmental groups – all
together over 280 organisations from over 80 countries – demanded
that the World Bank stop one of its most insidious activities: the
‘business ranking’ of countries. The Bank’s Doing Business Report
(DBR) has scored countries according to how well their governments
are “improving the business climate” over the past 15 years. But this
model suffers from fundamental flaws (see Observer Summer 2017).

In January 2018, the Bank’s Chief Economist Paul Romer publicly
denounced the flawed methodology of and political manipulation by the
World Bank’s DBR, which Romer noted may have been used to disfavour
Chile’s ranking under its outgoing socialist president, Michelle
Bachelet. Romer’s resignation followed a few days later.

In 2013, the World Bank’s own Independent Evaluation Group (IEG)
recommended that the country rankings be eliminated from the DBR (see
Observer Autumn 2013). The group’s report also criticised the DBR for
ignoring “the social or economy wide benefits that regulations yield,
such as safety, environmental protection, worker protection, or
transparency.” By forcing countries to compete against each other,
the rankings encourage a race to the bottom of deregulation between
countries. The IEG also recommended eliminating the tax indicator,
which penalises countries that require private companies to pay taxes
or make contributions to pensions and other social protection schemes
(see Observer Winter 2017). Bank management ignored these
recommendations and has maintained a scoring system that rewards
governments that not only cut taxes but also eliminate social, labour
and environmental regulations in favour of corporations and foreign
investment.

EBA: The expansion of a failed model
---------------------------------------------------------------------
Based on the DBR’s model, the Enabling the Business of Agriculture
(EBA) report was launched after leaders of the G8 asked the World
Bank in 2012 to create a “Doing Business in Agriculture Index”, to
guide policy makers in the developing world in designing “business-
friendly” agricultural policies and regulations. It was started with
financing from the US, UK, Danish, and Dutch governments as well as
the Bill and Melinda Gates Foundation.

The EBA dictates so-called “good practices” to regulate agriculture
and scores countries on how well they apply and implement them. Based
on the EBA scores, the World Bank leverages policy changes in
agriculture. By promoting a so-called “commercially-oriented”
agricultural transformation, the Bank portrays farmers forced out of
agriculture through land transfers as an “opportunity” to take up
non-agricultural employment and obtain better livelihoods. As exposed
by a recent Oakland Institute report, the EBA’s goal is to promote
measures and reforms that will favour the corporatisation of
agriculture, including increased industrial agriculture and the
privatisation of seeds around the world.

Handing over natural resources like land to corporations and
destroying small-scale agriculture will not reduce poverty. The
Oakland Institute’s extensive series of reports on large-scale
agricultural investments in Africa showed that wealth redistribution
from agricultural investments has not been equitable. Job creation
and labour conditions on large farm holdings fail to match the
revenue, quality of life, and employment levels generated by small
farms; and rural migration towards over-populated, unemployment-
stricken cities does not improve livelihoods.

Though investments in agriculture are clearly needed in the
developing world, these should benefit the farmers, the local and
national economies, and ultimately contribute to global food
security. This requires locally adapted solutions based on the
experience, needs and the demands of farmers, pastoralists, and rural
communities. For this to happen, one must reject the Bank’s focus on
foreign investment, large-scale agriculture, commercial inputs to
increase yields and cash crops for export. As evidenced in the
Oakland Institute’s series of agroecology case studies, agricultural
yields, farmers’ income and food security can be drastically
increased with practices and policies that encourage crop
diversification, require less external inputs, enhance soil fertility
and increase biodiversity. So far, the Bank has turned a deaf ear to
the concerns raised by civil society and to the recommendations of
its own Independent Evaluation Group.

As a result of Romer’s high-profile criticism, Chile has demanded a
full investigation into the DBR. The Dutch and Danish governments,
two of the five initial EBA donors targeted by the Our Land Our
Business campaign, have pulled their financing from the project.
Early in 2018, France decided to pull out of the G8 New Alliance for
Food Security and Nutrition, an initiative which the EBA was
established to support and complement. In the wake of growing civil
society mobilisation, some governments have been forced to take
action, leaving the US, the UK, and the Gates Foundation increasingly
isolated in their mission to promote corporate interests through the
EBA. It will be in the Bank’s favour to follow the stated mission of
its development agenda – to end poverty, instead of misusing it to
harm the poor.

ourlandourbusiness@oaklandinstitute.org
ourlandourbusiness.org
oaklandinstitute.org

tinyurl.com/WBEBADBR

=====================================================================
ACCOUNTABILITY/analysis

IEG critical of World Bank’s progress on shared prosperity goal

Summary
- IEG report casts doubt on Bank’s progress on its own shared
prosperity goal
- Civil society raises concerns about Bank’s approach to shared
prosperity

In 2013, the World Bank Group (WBG) committed itself to twin goals:
To end extreme poverty by 2030, and to achieve shared prosperity,
defined as, “fostering income growth of the bottom 40% of the
population of every country.” Last November, the Bank’s Independent
Evaluation Group (IEG) published an evaluation entitled Growth for
the Bottom 40% which found a series of problems with the Bank’s
progress on this goal. Some of these, such as the scarcity of timely
and good-quality data, are unsurprising. Others, however, hint at
problems with the Bank’s approach to shared prosperity more
generally.

One of the central findings was that the Bank’s Country Partnership
Frameworks, “generally do not fully articulate the theory of change
pertaining to the bottom 40 percent.” The evaluation also found that,
“only 32 percent [of World Bank projects] have an explicit theory of
change linking project interventions to benefits among the bottom 40
percent.” Another striking finding of the report is that only 63 per
cent of Bank staff, “are fully familiar with the official World Bank
definition of shared prosperity.” Knowledge of the shared prosperity
goal is at its lowest within the Bank’s private sector arm, the
International Finance Corporation (IFC), at just 42 per cent.

In addition, the evaluation found that 68 per cent of staff, “believe
that in implementing the shared prosperity goal, the WBG should focus
more explicitly on reducing inequality” and that, “These views are
shared by several World Bank chief economists.” Tellingly, in a
discussion on the IEG report at the Bank, Manuela V. Ferro, the
Bank’s Vice President of Operations Policy and Country Service in
March, referred to shared prosperity as the Bank’s “sometimes
forgotten goal.” The IEG findings indicate that the Bank’s approach
to shared prosperity suffers from a lack of clarity, prioritisation
and ambition.

A definitional debate
---------------------------------------------------------------------
The IEG findings and recommendations suffer from its narrow approach.
The Bank’s limited definition of shared prosperity as income growth
of the poorest overlooks the pernicious impacts of wealth inequality.
Economists such as Thomas Piketty have warned that if the richest
accumulate wealth at a faster pace than economies are able to grow,
inequality in that society will intensify. A January 2018 Oxfam
report entitled Reward Work, Not Wealth found that 82 per cent of the
wealth generated last year went to the richest 1 per cent, while the
poorest 3.7 billion people saw no increase in their wealth. As
outlinted below, the Bank’s definition of the shared prosperity
parameters, coupled with IEG’s findings, has obvious implications for
the policy prescriptions and strategies used by the Bank to pursue
its second goal.

Guilt by omission – tax and labour rights
---------------------------------------------------------------------
While the IEG evaluation stated that only about 6 per cent of staff
“mention work focused on improving macro stability or taxation
policies as a channel for contributing to the shared prosperity
goal”, it does not go on to mention ways to improve this in its
recommendations. It thus seems to ignore compelling evidence, such as
that provided by the Tax Justice Network August 2017 blog, of the
positive impact progressive tax policies can have on decreasing
inequality. Concerningly, the IEG report does not once mention trade
unions, despite being published only months after the International
Trade Union Confederation (ITUC) and Global Unions called on
international financial institutions – including the Bank – to boost
incomes of people around the world by supporting strengthened
collective bargaining rights. ITUC General Secretary Sharan Burrow
said, “A rise of wages will do much to … stop the trend of increasing
inequality and provide the increase in global demand needed to
sustain economic recovery.”

The Bank’s PPPs agenda – further incoherence with ‘shared prosperity’
---------------------------------------------------------------------
While the report clearly stipulated that, “supporting equitable and
sustainable macroeconomic policies” should inform much of the shared
prosperity work, it does not address the implications of the Bank’s
Maximising Finance for Development (MFD) approach and its related
push for public-private partnerships (PPPs) on macroeconomic
sustainability or equality (see Observer Summer 2017). Civil society
expressed its concern in the October 2017 ‘PPP Manifesto’ signed by
152 CSOs, which stressed that the available evidence on PPPs
indicates that they threaten macroeconomic stability through hidden
debts and contingent liabilities, and increase inequality through
user fees for the most vulnerable (see Observer Winter 2017-2018).
For example, as noted in Belgium-based CSO Counter Balance’s December
2017 How infrastructure is shaping our world report, the Bank’s MFD
and PPP agenda both support the development of mega-infrastructure
corridors that enhance rather than alleviate inequality.

tinyurl.com/IEGprosperity

=====================================================================
SOCIAL SERVICES/analysis

The impacts of IMF-backed austerity on women’s rights in Brazil
by Grazielle David, Institute of Socioeconomic Studies (INESC)

Summary
- IMF and World Bank endorse Brazil’s 20-year spending cap
- CSOs argue cap violates human rights principles and is ineffective

Since 2015 the Brazilian government has implemented unnecessary and
excessive austerity measures with major human rights implications,
especially for women’s rights, despite the availability of less
harmful alternatives. Among these austerity measures, the
unprecedented constitutional amendment – CA 95, which came into
effect in December 2016 – capped social expenditures and investments
at 2016 levels, adjusted to inflation, for the next 20 years. It has
been endorsed by the IMF and World Bank, while Brazilian civil
society seeks its revocation. The IMF’s support for the amendment was
made public in its November 2016 technical assistance report. It
reinforced this view during the visit of IMF officials to Brazil one
month before the vote on the amendment took place, in the midst of
nation-wide protests against its approval.

Gendered impacts of CA 95
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From 2015 to 2017, social investments were reduced by an estimated
$42 billion, or 6 per cent of Brazil’s total expenditures. With the
passage of CA 95, these expenditure levels are expected to remain
constant for the next 20 years. As demonstrated by INESC research,
expenditures specifically benefitting women were reduced by 58 per
cent after CA 95 came into place, while the number of specialised
services offered to women suffering from violence was also reduced by
15 per cent between 2014 and 2016, and are now frozen at this level.
CA 95 not only violates the human rights principles of non-
retrogression and non-discrimination, but endangers the lives of
Brazilian women.

Simultaneously, the Brazilian government has been dismantling state
institutions that promote gender equality. The Secretariat for
Women’s Policies had its status diminished in 2015, no new shelters
for women have been built in 2017, and no public campaigns to prevent
violence against women have been executed since 2014 due to budget
cuts.

IMF claims social spending is protected
---------------------------------------------------------------------
When presented with this evidence during a panel session on the
gendered impacts of IMF policies during the 2017 IMF and World Bank
Annual Meetings in October, an IMF official said that the expenditure
cap would exempt much of Brazil’s health and education spending (see
BWP briefing, The IMF, Gender Equality and Austerity). She argued
that the constitutionally guaranteed federal transfers to states and
municipalities are not included in the cap and that this money would
finance these two essential public services.

In reality, according to article 110 of CA 95, the federal transfers
to the states and municipalities earmarked for health and education
fall under the expenditure cap. Therefore, the cap shifts the burden
of these social costs further to states and municipalities.
Constitutional un-earmarked federal transfers are a very important
source of income for states and municipalities, as these transfers
can be used to finance anything. Given that many municipalities and
states are already facing fiscal crises, it is unrealistic to expect
that they would direct this revenue to education and health. Given
multiple pressing priorities, it is expected the cap will result in a
significant reduction of support to women, despite the IMF’s claims
to the contrary.

Right diagnosis, wrong remedy
---------------------------------------------------------------------
The IMF did affirm that the fiscal deficit in Brazil was not a result
of excessive social expenditures, but rather a crisis of the private
sector. On this, we agree. However, what is the logic of identifying
a private sector crisis and then recommending an austerity measure of
freezing public social expenditures for 20 years? This flawed
macroeconomic policy decision disproportionately impacts the most
vulnerable and women in particular, and ignores the fact that there
are alternative fiscal policies with beneficial gendered impacts.

For example, in Brazil research demonstrates that women tend to pay
more taxes relative to their income than men, given the very
regressive tax system that overburdens the poorest. This is
particularly the case for black women, who make up the poorest
demographic group in Brazil. If instead of cuts to the social budget,
the government had carried out progressive tax reforms, like shifting
tax burdens from consumption to income and wealth taxes, the result
could have been significantly fairer. Such a solution could have
reduced the high levels of inequality in Brazil, currently among the
highest in the world, and helped correct gender biases in the tax
code, as well as increased overall revenue collection. This could
have eased the need for fiscal consolidation and would have relieved
the disproportionate burden on women in particular.

tinyurl.com/IMFTunisia

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ACCOUNTABILITY news

#MeToo arrives at World Bank as it publishes Gender-Based Violence
Action Plan

Summary
- Action Plan calls for additional resources to tackle GBV
- Bank to conduct external review of its sexual harassment procedures

Internal sexual harassment cases from 80s brought to World Bank
Ombudsman

In November 2017, the World Bank released an Action Plan (AP)
outlining measures and a timeline for implementation to help prevent
and respond to gender-based violence (GBV), including incidences of
sexual exploitation and abuse (SEA) in World  Bank-financed projects.
The Bank’s press release noted the AP addressed the Global GBV Task
Force (TF) recommendations, which resulted from sexual exploitation
and abuse allegations in a Bank-financed Uganda road project (see
Observer Spring 2017, Autumn 2017). In the aftermath of the Uganda
case, the global development media platform Devex reported in April
2017 that Bank President Jim Yong Kim called GBV a “worldwide
epidemic” that “undermines all our work”, and vowed to make
preventing  GBV a priority during his second term as head of the
institution.

Reflecting the TF’s recommendations, the AP included a section
“mandating Codes of Conduct for civil works contractors in Bank
Standard Procurement Documents, with prohibitions against SEA/GBV”,
including against sexual activity with under 18-year olds, regardless
of the local legal age of consent. Following the TF’s
recommendations, the AP ensures that additional resources are made
available and establishes a two-year GBV Prevention and Mitigation
Fund. The TF’s recommendations and the AP only look at Bank projects
and are not aimed at internal Bank procedures for sexual harassment
and abuse.

Separate from the AP, the Bank is in the process of commissioning an
external review of its internal processes and procedures, with
particular attention to sexual harassment and exploitation inside the
Bank, including a review of the Code of Conduct in which the Bank’s
commitment to protect staff is included. Anne Quesney of ActionAid UK
noted that, “while developing the AP, cases of abuse of power and
sexual harassment of staff surfaced within the Bank itself –
demonstrating that the problem goes well beyond contractors’
behaviour and illustrating the endemic nature of violence against
women and girls across society, providing the Bank with an
opportunity to adopt a holistic approach to addressing unequal power
structures.”

Sexual harassment at the World Bank – not a thing of the past
---------------------------------------------------------------------
In December 2017, Elaine Zuckerman, of US-based NGO Gender Action and
a former Bank staffer, wrote a letter to the World Bank Ombudsman
where she spoke out about her own experiences of being sexually
assaulted by two male Bank officials in the early 1980s. Her letter
recounted that, at the time, she sought “redress from the World Bank
Ombudsman”, but was told that “he could do nothing without witnesses”
– effectively ending the complaint process. “Without any transparency
and accountability, the perpetrators, and other lechers in the Bank …
were protected by silence.” Zuckerman wants to “retroactively seek
and explore obtaining justice”, and share her experiences “to improve
the Bank’s work culture”, stressing, that “Now is the ideal moment to
examine, spotlight and redress past and present sexual violations in
the Bank so that all staff have the safe workplace they deserve!”

Zuckerman’s letter was followed in February by an article in
Washington DC-based newspaper Afro by E. Williams, of the National
Congress of Black Women, criticising the Bank’s lack of action to
address internal sexual harassment since the 1992 Stern and 1999 US
Congressional reports, which concluded that the “Bank’s internal
justice system that is supposed to protect women from sexual
harassment [is] unfit to adjudicate sexual harassment claims.”
Williams argued little has changed since the Stern Report identified
“a rampant culture of ‘general sexual harassment.’” While the Bank
develops processes to prevent GBV in its operations, it evidently has
a long way to go in addressing this issue holistically throughout the
institution.

tinyurl.com/GBVmetoo

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Follow BWP’s World Bank and IMF 2018 Spring Meetings Dispatch

World Bank and IMF governors will meet during the 2018 Spring
Meetings in Washington DC from 20-22 April. The Civil Society Policy
Forum (CSPF) will take place from 17-20 April. The Bretton Woods
Project will provide analysis of the meetings’ communiqués, notes
from CSPF seminars and more on BWP’s  Dispatch page.

Key themes to be discussed include increased engagement with fragile
states, climate change, the IMF’s social protection work,
implementation of the Bank’s Maximising Finance for Development
approach, the 10-year anniversary of the global financial crisis,
bridging the global infrastructure gap and the capital increase for
the International Bank for Reconstruction and Development (IBRD, the
Bank’s middle-income arm), the International Finance Corporation
(IFC, the Bank’s private sector arm), and Multilateral Investment
Guarantee Agency (MIGA, the World Bank’s political risk insurance
arm).

tinyurl.com/Spring18Dispatch

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