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1 World Report

Human Rights and Development in the World Bank: Concerns and Suggestions

By Matthew Bishop Submitted June 07, 2011 Published by WorldReportNews.com on June 16, 2011

This paper presents the argument that Structural Adjustment Programs are flawed in their design and thus contribute to the violation of human rights in World Bank recipient countries. In addition, lack of government transparency on the part of the recipient, lack of genuine care on the part of the donor, lack of following the rules on the part of the recipient, lack of effective and constructive fund-allocation rules on the part of the World Bank, and lack of investigations and change on the part of the World Bank all contribute to the failure to advance civil-political and/or socioeconomic rights and abilities among people in recipient countries. Failure, therefore, is the result of World Bank SAP design flaws, of recipient abuse, of donor interest, and, connecting them all together, of a lack of transparency and third-party investigation. This paper agrees with the idea that the World Bank, to address these problems, must begin by taking a humanrights based approach to macro- and microeconomic development.1 Examining the cases of Cambodia and Ethiopia in short detail, then proceeding to analyze the theoretical arguments as to why these cases and others like them occur, this paper concludes that a complete restructuring of Structural Adjustment Programs, more outside "watchdogs" and fund transparency, and active mutual civil-political and socioeconomic development are all necessary starting points for the new human-rights based approach to economic development. It is this paper's belief that, by bringing up the purchasing power of formerly marginalized populations, a human-rights based approach to development will ultimately lead to a stronger economy, security, and political body.

For the original explanation of the human-rights based approach, see Korinna Horta, "Rhetoric and Reality: Human Rights and the World Bank", Harvard Human Rights Journal, Vol. 15, and also Dana L. Clark, "The World Bank and Human Rights: The Need for Greater Accountability", Harvard Human Rights Journal, Vol. 15

3 I: The Cases of Cambodia and Ethiopia

Native residents have been residing in the lakeside town of Boeung Kak, Cambodia, for generations. The World Bank, directed as it is by the West, acknowledges only people who have written land titles and are documented. But like most native populations in the "Global South", the residents of Boeung Kak never have and still do not possess any written land titles. In many cases, their land was sold to them by the federal government or by land retailers, yet there is no sense of needing written contracts. When the government came to relocate the people of Boeung Kak, they encountered no legal restraint.2 The World Bank's Land Management and Administration Project (LMAP), like most programs of the World Bank, focuses its ideas of development around large-scale economic development and thus encourages big business. The lake where these residents lived was desirable for its forests, which are good timber. Without legal resistance, logging companies set up shop and evicted the residents of Boeung Kak.3 This is a common problem throughout the world. The World Bank does make efforts to grant land titles-- indeed, LMAP had successfully granted titles to more than 1,000,000 Cambodians before the government cancelled the program in 2009 in protest of World Bank demands. Yet it remains World Bank policy that a person without a title can be relocated with compensation. LMAP was a program designed, in part, to solve potential problems by issuing written titles to residents of mostly-rural areas. There is a flaw, apparently, in that when businesses promoted by the World Bank or donor
2

Irwin Loy, "Botched World Bank Project Leads to Thousands of Evictions". IPS World News Service, <http://ipsnews.net/news.asp?idnews=54888>. Written March 17, 2011 (Accessed April 29, 2011)
3

Ibid

4 governments outpace the issuing of titles, forced evictions and crises can occur. The World Bank ignored appeals for the residents to be able to argue their case for titles in court, and the Inspection panel did not address the issue until there were less than 1,000 people left in Boeung Kak.4 Ethiopia is one of the poorest nations in the world and remains the recipient of some of the heaviest foreign aid packages. The per capita income in Ethiopia is 350 USD/yr, compared to the sub-Saharan African national standard of 1,077 USD/yr. Of 85,000,000 inhabitants, 7,000,000 receive "safety-net" program funding, which provides very basic supplies of food and water. The World Bank claims that Ethiopia has been making great strides from this low starting point in recent years. The World Bank cites decreases in infant mortality rates, increases in individual income, increases in educational access, and projects for more water and electricity access as signs of this. The World Bank says that the government in Ethiopia has made great strides-- but they do not explain the civil and political cost of these strides.5 The EPRDF is the ruling party in Ethiopia. As far back as 2005, Human Rights Watch observed and explained how the EPRDF was using aid to "underwrite repression". This is an ongoing theme which has been publicized since that time, yet it continues to be a problem. The EPRDF denies access to aid and emergency food supplies to any and all political opponents and dissidents. To anyone who speaks out or voices a contradictory opinion, there can be no food, land fertilizers, or other basic necessities. Some large basic-necessity packages are being used to encourage teachers to join the party's

4 5

Ibid The World Bank. <http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/AFRICAEXT/ETHIOPIAEXTN/0,,menu PK:295939~pagePK:141132~piPK:141107~theSitePK:295930,00.html>. (Accessed April 29, 2011)

5 affiliation and to profess that affiliation in the classroom.6 Those 7,000,000 safety-net people are entirely reliant on these aid packages, and most other Ethiopians rely on them as well. The outcome of these repressive efforts are plain to see. To quote the World Bank, whose website still does not acknowledge this connection, "The May 2010 parliamentary elections resulted in a massive 99.6 percent victory for the ruling EPRDF and its allies, drastically reducing the opposition from 174 to only two seats in the 547 member lower house".7

II: Conclusions and Analysis of the Cases of Cambodia and Ethiopia

What went wrong in these cases? In the first case, the same program which was meant to entitle native land holders actually caused their forced eviction and removal by generating incentive for large logging companies without covering the villages those logging companies were interested in. The government in Cambodia, after canceling LMAP because of too many restrictions imposed by the World Bank, then renewed the program with less restrictions. Less restrictions and less guidance compiled with lax monitoring culminated in the case of Boeung Kak. The World Bank must always appease one party or another, but we can rightly assume that Cambodia was in need of World Bank funding and that to impose restrictions on the violations of human, civil, and political rights would not have been overly invasive. Watchdog teams should have been
6

Human Rights Watch, Development Without Freedom: How Aid Underwrites Repression in Ethiopia (October, 2010); Elizabeth Arend, Gender, IFIs, and Food Insecurity Case Study: Ethiopia (Gender Action: April, 2011); see also the HRW document of the same title, but issued five years earlier-- that is, in October of 2005; Tesfa-Alem Tekle, "Ethiopia: World Bank Delegates Impressed by Food Security Program", The Sudan Tribune. < http://www.sudantribune.com/Ethiopia-World-Bank-delegates,36741>. Written Oct. 27, 2010 (Accessed April 28, 2011)
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The World Bank. <http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/AFRICAEXT/ETHIOPIAEXTN/0,,menu PK:295939~pagePK:141132~piPK:141107~theSitePK:295930,00.html>. (Accessed April 29, 2011)

6 in place to raise awareness of the situation, as the quasi-independent investigation team of the World Bank was ignoring pleas from the village. In the second case, the funding is going in to Ethiopia and being given to the hands of the ruling party, which then has the capability to manipulate those funds for their own security by granting funding only to supporters of the ruling party. In doing so, they perpetually elevate the civil, political, social, and economic standing of their own supporters, while suppressing the status of dissidents and opposing intellectuals. Here the connection between political and economic rights is most clear. There is a common factor which has led to both of these failures: The standardization of World Bank programs, specifically Structural Adjustment Programs, or SAPs. The majority of the World Bank's funding is allocated through these SAPs.8 SAPs are, to a point, specifically designed for each individual nation.9 Furthermore, the World Bank, acknowledging the correlations between economic development and human rights, affirms that SAPs take into account human considerations.10 Yet SAPs have very specific agendas which oftentimes counteract the human rights aim of certain World Bank programs-- it is the disregard of international law, the forcing of liberal market styles upon World Bank fund recipients, and the misled acceptance of what constitutes a "good" economy which leads to the economic and/or human rights failures of recipient states, as demonstrated in the cases of Cambodia and Ethiopia.

Bahram Ghazi, The IMF, The World Bank Group and the Question of Human Rights. Series on International Law and Development. (Lawrence, KS: Transnational Publishers, 2005) 9 The World Bank. Development and Human Rights: The Role of the World Bank (1998); Bahram Ghazi, The IMF, The World Bank Group and the Question of Human Rights. Series on International Law and Development. (Lawrence, KS: Transnational Publishers, 2005) 10 The World Bank. Development and Human Rights: The Role of the World Bank (1998)
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7 Structural Adjustment Programs lack transparency.11 In Ethiopia, that lack of transparency has been cited as the critical concern regarding human rights.12 It is why the ruling party was able to be so manipulative. In Cambodia, lack of transparency led to the World Bank being at first unaware of and then subsequently unresponsive to the crisis of land entitlement.13 Indeed, lack of transparency is one of the underlying flaws of the World Bank's approach-- while transparency does exist it is too limited to guarantee success. SAPs should be monitored by third-party organizations and require obedience to rules of human rights. They should also, it has been suggested, require their recipients to follow the founding documents of modern international law.14 Ethiopia's activity violates the ICCPR by allocating funds, food, and fertilizers based upon political party affiliation, for example-- and thus denying free determination of political status.15 Were the recipient states required to adhere to the provisions of both the ICCPR and the ICESCR, it would go a long way toward correcting the human rights abuses brought about by SAPs. Had there been requirements to adhere to international law and appropriate third-party investigations coupled with transparency on all sides, the cases of Ethiopia and Cambodia would have been much more avoidable-- and if this advice is taken, it is far less likely

Bahram Ghazi, The IMF, The World Bank Group and the Question of Human Rights. Series on International Law and Development. (Lawrence, KS: Transnational Publishers, 2005) pg 48
11 12

Human Rights Watch, Development Without Freedom: How Aid Underwrites Repression in Ethiopia (October, 2010) 13 Irwin Loy, "Botched World Bank Project Leads to Thousands of Evictions". IPS World News Service, <http://ipsnews.net/news.asp?idnews=54888>. Written March 17, 2011 (Accessed April 29, 2011); Toshiyasu Kato, Jeffery A. Kaplan, Chan Sophal, and Real Sopheap, Cambodia: Enhancing Governance for Sustainable Development (Phnom Penh: Cambodia Development Resource Institute, 2000)

Bahram Ghazi, The IMF, The World Bank Group and the Question of Human Rights. Series on International Law and Development. (Lawrence, KS: Transnational Publishers, 2005) pg 167, 255 15 Ibid, 167
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8 that similar cases will repeat themselves, although there are more problems one first must consider. While SAPs are abused by recipient states, the World Bank itself does actually misuse the SAPs in the first place by designing them with a fundamental set of Western market values which do not always work for recipient states. Among many other things, SAPs generally require states to 1) Adopt free trade principles without the use of subsidies, and to remove existing subsidies; 2) Privatize public companies and businesses in general; 3) Allocate funding in a way which is most beneficial to outside corporate or national interests and not as beneficial to the recipient itself.16 Requiring the recipient state to decrease or eliminate its subsidies often heightens the price of certain necessary goods to the level where marginalized and impoverished populations cannot afford them any longer. Requiring a market to become "free" when the Western markets are in fact heavily subsidized results in a lack of opportunity for recipient nations' populations to sell and buy their own goods both inside and outside of the country. Thus at the same time that profits are decreasing, prices are increasing. Privatizing formerly public businesses can lead to a similar phenomenon where less wealthy individuals, who once benefited from a more socialist sort of business, find themselves unable to pay for now private goods or services. If there is a large enough concentration of wealth in the upper classes (and given the abovementioned phenomenon we may presume that at the same time lower classes are becoming less impoverished) privatized corporations will cater toward the consumer and ignore those people beneath the plausible or desired level of purchasing power.

16

Ibid, 45-48, 51, 241

9 Allocating funds in ways which benefit sponsor corporations and nations moreso than recipient populations is a common occurrence. A most common pattern is the allocation of funds for highways and automobile development, instead of allocating funds for public transit and public railway systems which would benefit populations more by providing more affordable transportation. Such funding benefits the automobile interests of donor nations, but does not effectively provide practical transportation development for the recipient nation.17

IV: Suggestions and Theoretical Contributions

To realize how one goes about fixing these problems, one must first discuss the theoretical issues surrounding human rights, development, and World Bank connections. The underlying fact that one must build off of is that the World Bank's mandate of poverty alleviation becomes jeopardized when the World Bank supports abuses of human rights.18 We know this because government is the intermediary between civil-political and socioeconomic rights and abilities.19 When that intermediary link is corrupted, World Bank programs adversely affect human rights. These theories have already been argued and proven, and the World Bank has admitted that transparency must become more of a central requirement for programs.20 Yet-- as Ethiopia and Cambodia both demonstrate-this is a hollow and unfulfilled claim. There must be more transparency-- to the point
17 18

Ibid, 51 Dana L. Clark, "The World Bank and Human Rights: The Need for Greater Accountability", Harvard Human Rights Journal, Vol. 15 19 Daniel Kaufmann/The World Bank Institute, Human Rights and Development: Toward Mutual Reinforcement: Human Rights and Governance: The Empirical Challenge (NYC: New York University Law School, 2004) 20 The World Bank. Development and Human Rights: The Role of the World Bank (1998)

10 where economic development should actually be approached from a human rights angle.21 The separation between civil-political and socioeconomic rights is "a disingenuous distinction".22 Therefore the recipient, donor, and World Bank must all be more actively engaged in the human rights-based approach to development. Specifically, the World Bank should pay closer attention to income disparity, individual purchasing power, and regional or ethnic inequalities. This paper adds yet another argument alongside these already-proven ones: That SAPs, the fundamental program of World Bank development, enhance the abovementioned flaws by essentially requiring the government to corrupt its own economy as a part of the SAP mandate. The three criteria which SAPs demand and which adversely affect human rights-privatization, enforced free trade, and self-interested appropriation of funds-- are the first things which must be fixed. They are under the direct domain of the World Bank, and only the World Bank may fix these flaws. At the same time, donor nations must comply with these same criteria-- they must support the World Bank in its real mission and realize that their principles and own interests are often detrimental to the interests and principles of the recipient nation. The second move must come largely from the recipient nation itself, but must also include the cooperation of the World Bank and its investigative institutions. The recipient nation must first agree to the standards of international law regarding socioeconomic and civil-political rights. Then the recipient nation must allow for full transparency in all of its programs and funding deriving from World Bank programs and allow third-party institutions to investigate these proceedings. In conjunction with these investigations, the
Dana L. Clark, "The World Bank and Human Rights: The Need for Greater Accountability", Harvard Human Rights Journal, Vol. 15 22 Korinna Horta, "Rhetoric and Reality: Human Rights and the World Bank", Harvard Human Rights Journal, Vol. 15
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11 World Bank itself must not become lax in its own investigations, as it did in both Cambodia and in Ethiopia. It is the duty of the donors, recipients, and World Bank alike to ensure that populations are not unnecessarily marginalized and that funds are not misappropriated in the name of politics (Ethiopia) or in the name of macroeconomic development (Cambodia). If there is one overwhelming conclusion to take away from all of this, it would be this: Politics must never become an excuse for economic development methods; Economic development must never become an excuse for politics; Politics and economics must coincide and coexist and act mutually toward the betterment and fulfillment of the interests of the marginalized and the voiceless. By readjusting macroeconomic approaches to more microeconomic, human-rights based approaches, by revamping the requirements of Structural Adjustment Programs, and by mutually assuring that politics and economics act in cohesion instead of against one another, the World Bank, donor nations, third-party investigators, and recipient nations will find the path to development much easier. At the same time, they will find that as their macroeconomic economy develops, so too will their microeconomic economy. So, too, will civil-political and human rights. So, too, will the purchasing power of formerly marginalized individuals-- and so subsequently the purchasing power of the populace in regards to basic goods. Finally, following all of this, the nation as a whole will have a stronger economy, a stronger body politik, and a stronger sense of security, as it will be able to maintain its stability in an environment of social, political, economic, and civil well-being. This is a long process which requires many complementing actions from all actors involved, and will at times require the sacrifice of principles and profits on the part

12 of donor nations and the sacrifice of power on the part of recipient nations. The process begins with that institution which coordinates efforts between these two bodies: The World Bank.

FULL BIBLIOGRAPHY

13

Arend, Elizabeth. Gender, IFIs, and Food Insecurity Case Study: Ethiopia. Gender Action: April, 2011.

Clark, Dana L. "The World Bank and Human Rights: The Need for Greater Accountability". Harvard Human Rights Journal, Vol. 15

Ghazi, Bahram. The IMF, The World Bank Group and the Question of Human Rights. Series on International Law and Development. Lawrence, KS: Transnational Publishers. 2005.

Horta, Korinna. "Rhetoric and Reality: Human Rights and the World Bank". Harvard Human Rights Journal, Vol. 15

Human Rights Watch. Development Without Freedom: How Aid Underwrites Repression in Ethiopia. October, 2010.

Kato, Toshiyasu, Jeffery A. Kaplan, Chan Sophal, and Real Sopheap. Cambodia: Enhancing Governance for Sustainable Development. Phnom Penh: Cambodia Development Resource Institute. 2000.

14 Kaufmann, Daniel /The World Bank Institute. Human Rights and Development: Toward Mutual Reinforcement: Human Rights and Governance: The Empirical Challenge. NYC: New York University Law School. 2004.

Loy, Irwin. "Botched World Bank Project Leads to Thousands of Evictions". IPS World News Service, <http://ipsnews.net/news.asp?idnews=54888>. Written March 17, 2011. Accessed April 29, 2011.

Tekle, Tesfa-Alem. "Ethiopia: World Bank Delegates Impressed by Food Security Program". The Sudan Tribune. < http://www.sudantribune.com/Ethiopia-World-Bankdelegates,36741>. Written Oct. 27, 2010. Accessed April 28, 2011.

The World Bank. Development and Human Rights: The Role of the World Bank. 1998.

The World Bank. <http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/AFRICAEXT/ETHIOP IAEXTN/0,,menuPK:295939~pagePK:141132~piPK:141107~theSitePK:295930,00.html >. Accessed April 29, 2011.