Is the World Bank Helping the Poor—or the World’s Banks?
by Vince Beiser
While business-suited officials of the World Bank Group hold their annual conference in Washington, D.C., on Friday, activists from around the world will be on the streets outside protesting what they say is the global financier’s damaging impact on land use in the developing world. A coalition representing 235 groups, most of them from developing countries, will stage “creative resistance” actions outside the World Bank’s Washington headquarters and in nine other cities to denounce policies they say promote land grabs—mass-scale land sales to foreign investors that lead to the eviction of local farmers.
The protests target the World Bank’s Doing Business report, which ranks countries by the extent to which local regulations make it easy to start and run a business. The rankings, say protest organizers, have a powerful influence on policy makers in poor countries trying to get a leg up by encouraging them to ease regulations, benefiting foreign corporations at the expense of local populations.
“The rankings are about how easy you make it for foreign companies to set up shop in your country,” said Anuradha Mittal, executive director of the Oakland Institute, one of the groups organizing the protests. “It encourages countries to do away with things like environmental regulations, minimum wages, and public consultations to create an environment which favors investors.”
The protesters’ concerns are driven by a recent surge in land purchases across Africa, Asia, and Latin America by big corporations, governments, and billionaire investors, especially after the 2008 spike in food and energy prices. That encouraged a rush on fertile terrain to grow food and biofuel crops. Some local governments have—with World Bank assistance,according to the Oakland Institute—facilitated these land grabs. Often they’ve come at the expense of smallholder farmers or pastoralists living or farming on the property.
Tens of millions of acres of land have changed hands in recent years, with most of the crops,according to Oxfam, produced for export, not local needs. Millions of farmers have been displaced in the process, says a report by the Oakland Institute. Critics are also sounding the alarm on environmental damage that could result from the introduction of industrial-scale agribusiness.
The World Bank, whose raison d’être is ostensibly to eliminate poverty worldwide, sees things differently. “Claims that the World Bank Group supports land and resource grabs, or encourages them through its annual Doing Business reports, are incorrect,” said a World Bank spokesperson. “The Doing Business reports focus on domestic enterprises, not foreign investors and large companies. When local businesses grow unhindered, more job opportunities are created and benefits are spilled over to the society.”
Bottom line, said the spokesperson: “The World Bank Group opposes speculative land investments or acquisitions which take advantage of weak institutions in developing countries or which disregard principles of responsible agricultural investment.”
As if outside activists weren’t enough of a headache, the World Bank is also under fire from its own staff. A group of its employees called for a 15-minute strike this week; they’re upset because at a time when many of the rank and file are being told to prepare for layoffs and budget cuts, a World Bank exec was just given a $94,000 bonus.
To stay up-to-date on the protests, watch #worldvsbank on Twitter.