View previous stories
	What the World Bank’s shift from public to private funding means for development by Steven Friedman University of Johannesburg South Africa   Making economies work for more people is a political task, not a technical exercise. The World Bank has just conceded this – without meaning to do so.   The bank has taken a new direction which, its critics say, means that it has given up on making economies work for the poor.   In theory, they are right. In practice, the bank may be recognising that the politics which shape it made it impossible for it to achieve the development which it promised for the poor.   The change was outlined in an April speech by bank President Jim Yong Kim, and is discussed in a recent document spelling out the bank’s vision for 2030. It’s meant to change it from a lender for development into a broker which will unlock “trillions” of dollars in private investment. It will seek to help countries by advising them on the policy and governance changes they need to make to attract the money. So the Bank will become a conduit for private investment, not public development funding.   The Bank does not say it is giving up on public funding. But its document declares that: ''''Only where market solutions are not possible … would official and public resources be applied''.   So public development funding will be used only where it cannot attract private investors to poorer countries. Since Kim insists it can unlock “trillions” of dollars which can transform developing countries, it seems unlikely to reach for public funding in a hurry. So it seeks now to act as a broker for private investment, not public development.   The bank’s critics point out that private funding wants returns, not less poverty. They warn that relying on it for development will increase poverty and conflict. Ironically, they are repeating criticism that Kim made when he was a development practitioner – that development was being shaped by the agendas of private funders.   In principle, the shift does abdicate the World Bank’s mandate. It was a product of the 1944 Bretton Woods conference where its architects, John Maynard Keynes, Henry Morgenthau and Harry Dexter White, all saw an important public sector role in correcting some of the market’s impact. The bank was an instrument of that public role - one of its functions was “counter cyclical” public funding to stimulate economic activity when dips in the business cycle depressed markets.   The bank’s shift abandons this role and places the fate of the global poor largely in the hands of private wealth. It seeks not to find ways in which private money can serve public needs but how public needs can shift to meet the demands of private money. It could be seen as the final abandonment of wealthy countries’ obligation to the rest of the planet.   The role the World Bank’s architects had in mind may describe what it did at the beginning when it funded the revival of war-torn Europe. But, when it began to fund development in poor countries, it gave a role to markets well beyond anything its inventors would have endorsed.   In Africa, it demanded Structural Adjustment Programmes which cut back sharply on public welfare and, in the view of critics (such as Kim in his previous incarnation), caused great suffering. Its determination to ensure that funds went only to the most desperate (cutting the funding burden) once prompted it to recommend, in Tunisia, a biscuit so unpleasant that only the very hungry would eat it. The World Bank’s private finance arm, the International Finance Corporation (IFC), whose role will be strengthened by the shift, was fingered as the chief cause of that suffering.   So the bank behaved in much the same way and for much the same reasons as its critics fear it will behave now.   It and its supporters insist it made a positive impact: they cite data showing a marked drop in global poverty and say it contributed to this. But the figures are hotly debated. Even if they are accurate, there is no clear evidence that the bank helped make them happen. Nor has it created a world in which many more people find a settled role in the economy.   So the bank’s new role may, therefore, be simply its old one, but now with an accurate product description.   This may overstate the case: the bank has, at times, made a serious attempt to listen to critics and to become a conduit of development, not pain. But it was never able to adjust as an organisation – it would often endorse criticisms in theory but not translate them into practice. And so it did not become an effective development engine. The bank’s current shift has probably been prompted by its declining role as a development funder, as poorer countries discover other sources of finance.   The bank failed to do what it promised because it reduced development, a political task, to a technical exercise. It did this because its own political constraints ruled out an effective role.   Effective campaigns against poverty and inequality happen for one of two reasons. Either elites decide it’s in their interests to fight them or, in democracies, poorer citizens use their vote and their rights to achieve change. Neither condition applied to the World Bank.   Its decisions are not made democratically because votes are allocated in proportion to capital invested, not the number of people a government represents. America always appoints the bank president because it provides most of the capital and has most of the votes.   The Bretton Woods trio did not see that the New Deal, the US programme in response to the Great Depression in 1933, had worked partly because it had a solid base of democratic support and that democracy was essential to the development they sought. In the absence of democracy, the elites have decided what the bank should do. Since the focus shifted from Europe to the rest of the world, they have shown little interest in changing a state of affairs from which they benefit.   It’s this political context which has caught up with the bank, first reducing its role and then forcing it to give up on public funding to fight poverty. Ironically, the critics who insisted that it take politics seriously have been vindicated in a way they did not intend or expect. Challenged to recognise politics’ role in development, it has done so by concluding that the politics which govern how it works make an effective role in development impossible.   * Steven Friedman is Professor of Political Studies, at the University of Johannesburg   http://theconversation.com/what-the-world-banks-shift-from-public-to-private-funding-means-for-development-80630 http://theconversation.com/why-the-world-banks-efforts-to-marshal-private-capital-wont-reduce-poverty-80348 http://sdg.iisd.org/commentary/guest-articles/uns-preferred-partner-not-the-public-sector/ http://www.hrw.org/news/2017/11/14/corporate-self-regulation-global-crisis
	Global supply chains are linked to significant negative human rights impacts by Michael Addo UN Working Group on Business and Human Rights   As G20 members prepare to meet in Geneva to prepare a ministerial declaration for more inclusive global economic growth, an open letter from a group of UN experts stresses that sustainable supply chains can be achieved only if human rights are protected and respected.   Global supply chains have contributed positively to economic and social development, but are also linked to significant negative human rights impacts, the letter from the UN Working Group on Business and Human Rights underlined.   “All too often, global supply chains are associated with human rights violations and abuses such as unsafe working conditions, child and forced labour, livelihoods destroyed by toxic industrial wastes, land seizures without compensation, and persecution of those who speak up against such abuse,” said Michael Addo, who currently heads the UN Working Group.   “This reality starkly highlights that for supply chains to become socially sustainable, human rights must be respected and protected,” Mr Addo stressed.   Noting how the activities of companies in global supply chains directly affect the lives of millions of people, both in the workplace and in communities, the Working Group underline the enormous potential of global supply chains to realize sustainable development if governments and companies acted together to uphold human rights.   “The G20 represents 85 percent of global economic output, 75 percent of world trade, and two-thirds of the world’s population, and includes both major ‘developed’ and ‘emerging’ economies. G20 leaders are therefore uniquely placed to address the human rights risks and impacts associated with global supply chains. They also have a unique responsibility to demonstrate leadership on this critical issue for our time,” Mr. Addo emphasized.   The UN experts clarified that G20 commitments and action to promote sustainable supply chains must be founded on the UN Guiding Principles on Business and Human Rights, the world’s agreed standard for preventing and addressing the adverse impact of business on human rights.   * Access the recommendations via the link below: http://bit.ly/2oekWoq   June 2017   Businesses must eradicate human trafficking from their supply chains - UN expert   Businesses must be more effective in their action to prevent and combat human trafficking. Workers’ voices must be heard in voluntary schemes set up within industries to tackle labour abuse and human trafficking, a UN human rights expert has said.   In her latest report, Special Rapporteur Maria Grazia Giammarinaro tells the Human Rights Council: : “It is crucial that multi-stakeholders and industry-based initiatives continue to improve the effectiveness of voluntary standards aimed at banning human trafficking and forced labour from their supply chains.”   During the preparation of her report, the expert engaged with such initiatives, giving advice about new ways to make voluntary schemes more effective, and prevent tragedies such as those occurred in some countries in which many workers in situation of forced labour and trafficking died in factories, as it happened in the case of Rana Plaza.   “High-risk practices should be identified everywhere, and businesses should ask sub- contractors to change such practices, under penalty of the termination of contracts.”   “Guaranteeing a voice for workers is of critical importance, and when independent auditors are involved, it is crucial that they have the resources they need to gather workers’ feedback and the skills to spot high-risk practices which make it possible for trafficking to take place.”   Businesses’ initiatives include labelling companies complying with voluntary standards, and therefore they enable consumers to choose companies with a clean record on trafficking and labour abuses.   Ms. Giammarinaro also highlighted the importance of raising awareness among relevant parties about the issue of human trafficking and the kind of practices which enable it to exist. Without this awareness, it would be impossible to establish standards to measure firms’ performance in preventing and addressing trafficking, she noted.   The Special Rapporteur called on all companies to respect human rights and eradicate human trafficking and forced labour, and praised the “fruitful and open” dialogue with the representatives of the multi-stakeholder initiatives, industry coalitions and auditing firms, which had enabled her to analyse the current challenges and produce her report.   The Special Rapporteur suggested there was a need for States to establish frameworks to protect workers from labour exploitation and to set out clear expectations for businesses.   “Voluntary standards alone are not sufficient to transform business models,” she said. “Achieving the transformation that is necessary will require innovative approaches including enhanced collaboration with governments.” : http://bit.ly/2r8Auin   #GoTransparent: Clothing Brands should GO Transparent (Human Rights Watch, agencies)   There’s a growing trend of global apparel companies adopting supply chain transparency. It starts with these companies publishing the names, addresses, and other important information about the factories manufacturing their branded products. This is a powerful tool for promoting garment workers’ rights. Workers and labor advocates can alert brands faster and seek remedies about abuses if they know the names of the companies they are producing products for.   Call on leading brands to STAND UP to support garment workers’ rights by signing the transparency pledge.   The Transparency Pledge   The objective of the Transparency Pledge is to help the garment industry reach a common minimum standard for supply chain disclosures by getting companies to publish standardized, meaningful information on all factories in the manufacturing phase of their supply chains. The civil society coalition that developed the Pledge surveyed published factory lists of leading apparel companies and developed a set of minimum supply chain disclosure standards that build on good practices in the industry.   Each company participating in this Transparency Pledge commits to taking at least the following steps within three months of signing it:   Publish Manufacturing Sites   The company will publish on its website on a regular basis (such as twice a year) a list naming all sites that manufacture its products. The list should provide the following information in English:   The full name of all authorized production units and processing facilities. The site addresses. The parent company of the business at the site. Type of products made. Worker numbers at each site. Companies will publish the above information in a spreadsheet or other searchable format: http://www.hrw.org/GoTransparent Visit the related web page
	View more stories