Land Deals: World Bank Group

Reports and Briefs

In the 1980s and 1990s, the World Bank and International Monetary Fund’s (IMF) intervention in developing countries’ national policies, through aid conditionality and austerity programs known as Structural Adjustments Programs (SAPs), triggered a wave of global resistance against the International Financial Institutions (IFIs). in the face of growing criticism that these policies increased poverty, debt, and dependency on rich countries, saps were eventually withdrawn in 2002; however the World Bank, through renewed means, continues to pursue and impose its neoliberal agenda on the developing world.

Established in 1944 with the objective of reducing poverty, the World Bank, headquartered in Washington, DC, is an international financial institution that provides financial and technical assistance as well as advisory services to enhance development in poor and transitioning countries.

Despite its praiseworthy goals, the World Bank’s activities and undue influence over policy making in developing countries have come under heavy criticism over the years. Countless protests have denounced the Bank’s neoliberal agenda, which includes unfair conditionality policies, austerity measures that deny people’s right to healthcare or education, support for environmentally destructive projects, and sham debt relief. The Bank’s 1980s structural adjustments programs (SAPs), impoverished millions in developing countries after imposing the withdrawal of state intervention and sweeping liberalization of economies as conditions to receive loans. The SAPs came under heavy attack from all quarters of civil society until they were officially withdrawn in 2002.

Oakland Institute’s report exposes the role of the Bank’s private sector branch, International Finance Corporation (IFC), in fueling land grabs, especially in Africa.

In the years following the 2001 economic crisis, the World Bank has used Uruguay as the poster child of an economy that has become stronger after following its development model. The Bank pushed for financial sector changes, including developing capital markets (the buying and selling of long term debt and other mechanisms) to improve the investment climate in the country. At the 88th position out of 189 countries, Uruguay enjoys a “good” score in the 2014 World Bank Doing Business rankings. This ranking reflects Uruguay’s efforts to follow the directives of the Bank’s investment climate team, which provides advisory services to the country. The current 2010-2015 strategy of the World Bank aims to help Uruguay further reform its economy and deliver greater competitiveness. One key pillar of the Country Partnership Strategy is to provide financial support for export-oriented agribusiness. It includes a Bank lending program of approximately $700 million, together with an active International Finance Corporation (IFC) program—private lending arm of the World Bank Group—and advisory services. All three of the IFC’s active investment projects in Uruguay are in export-oriented agribusiness companies.

In 2014, Uganda came in at 132nd out of 189 economies in the World Bank’s Doing Business ranking, down from 126 in 2013, reflecting that in the Bank’s view it had failed to improve the “ease of Doing Business in the country.” Nonetheless, Uganda was the second best performing economy of the East African Community (EAC) in the 2013 Doing Business report, and the country is a good ally for the World Bank in the region. It was recently chosen as one of the pilot countries to test the Bank’s new Benchmarking the Business of Agriculture (BBA) indicator, a project that aims to “help policy makers strengthen agribusiness globally, enabling the farm sector to participate more fully in the market.” With this project underway, the Bank will assist Uganda in creating an environment that supports the establishment of more private agribusinesses in the country, despite concerns that agricultural investments in Uganda have provoked land grabbing and dispossession of local populations.

Laos, officially the Lao People’s Democratic Republic is a mountainous, land-locked state, identified as one of the world’s Least Developed Countries (LDC). Since the year 2000, Laos has undergone an unprecedented transformation in rural land use, as government reforms facilitate growth through market-based economic strategies. The goal of the Laotian government is to graduate from LDC country status by 2020.

In 2008, the World Bank’s Doing Business program named Kenya one of its 10 Top Reformers, after the country had implemented a number of pro-business reforms. However, since then, the weakening investment climate and an “unsupportive” fiscal environment contributed to the Bank reconsidering Kenya’s inclusion in the Top Reformer group. Kenya dropped from 122nd out of 189 countries in the 2013 Doing Business ranking to 129th in the 2014 evaluation.

Although it is among the world’s resource-richest countries, the DRC ranks at the bottom of the World Bank’s Doing Business ranking (183rd out of 189 economies ranked in 2014), with the US Bureau of Business Affairs qualifying the country as “a highly challenging environment in which to do business.”1 Invasions sparking consecutive conflicts in 1996-1997 and 1998-2003, fueled by foreign interests over Congolese resources, have played a big role in destabilizing the economy and governing institutions.

Since Cambodia was first ranked 145th in the World Bank’s Doing Business (DB) ratings in 2008, it has only inched up slightly, moving to 137th in 2014. This deceptively low score belies the country’s deep deregulation in the hopes of attracting foreign investment. In 2014, the World Bank recognized Cambodia for being the South East Asian country most open to foreign direct investment (FDI), as well as the second largest recipient of FDI in agriculture in the region.

In its 2013 Growing Africa report, the World Bank argued “wider uptake and more intensive use of improved seed, fertilizer, and other inputs would go a long way to closing the African ‘agricultural performance deficit.’” The report goes on to advocate policy and regulation reforms claiming, “policy and regulatory barriers, including import restrictions and rigid, lengthy processes for releasing new varieties are slowing the adoption of agricultural inputs.” According to the World Bank, growth of the private sector is the best way to bring about agricultural development. Assuch, the Bank’s Doing Business (DB) project “encourages countries to compete towards more efficient regulation,” resulting in deregulation of the sector.

International financing has played a significant—although not always reported—role in the current conflict in Ukraine. In late 2013, conflict between pro-European Union (EU) and pro-Russian Ukrainians escalated to violent levels, leading to the departure of President Viktor Yanukovych in February 2014 and prompting the greatest East-West confrontation since the Cold War.

A major factor in the crisis that led to deadly protests and eventually President Yanukovych’s removal from office was his rejection of an EU Association agreement that would have further opened trade and integrated Ukraine with the EU. The agreement was tied to a $17 billion loan from the International Monetary Fund (IMF). Instead of the EU and IMF deal, Yanukovych choose a Russian aid package worth $15 billion plus a 33% discount on Russian natural gas. This deal has since gone off the table with the pro-EU interim government accepting the new multimillion dollar IMF package in May 2014.

In 2013, Mali was classified among the African countries that made the most effort to improve their business climate since 2005 by the World Bank. Undeterred by the 2012-2013 political crisis, the country retained its top ranking out of the eight West African Economic and Monetary Union (WAEMU) nations in the Doing Business 2013 report. In 2014, Mali lost this leadership, coming at the 155th place, just behind Burkina Faso. The country, however, remains a good student of the World Bank in sub-Saharan Africa.

Since 2004, the World Bank has provided continuous “investment climate advisory services” to Sierra Leone. Business reforms and Bank-piloted programs such as Sierra Leone Business Forum and the Sierra Leone Investment and Export Promotion Agency led to the World Bank classifying Sierra Leone among “the top 15 economies that improved their business regulatory environment the most” since 2005 and rank the country third in the regional “Protection of Investors” category. In the agricultural sector, reforms around land, mapping of parcels, and fast-tracking land leasing processes have attracted investors eager to develop large-scale monocrop plantations of sugar cane or oil palm, which deprive local communities of their resources and undermine human, social, and environmental rights in Sierra Leone.

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