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World Bank Rebuffs Land-Grabbing Claims

September 22, 2011
Emerging Markets


The International Finance Corporation has rejected criticisms from campaigners that its projects aimed at increasing foreign investment in Africa have facilitated land-grabbing by multinationals and large food importers.

The World Bank’s private sector arm, the International Finance Corporation (IFC), is being accused by campaigners of helping land grabbing in poor countries.

Representatives of civil society organizations (CSOs) at the annual meetings in Washington this week will demand co-ordinated action to regulate land grabbing, and reject the Responsible Agricultural Investment (RAI) principles as toothless.

Researchers in the US, working with CSOs in African countries, have found that IFC projects focused on improving conditions for foreign investment undermine local food security and pave the way for multinational companies and large food importers to buy land.

Anuradha Mittal of the Oakland Institute, a think-tank that monitors World Bank activities, told Emerging Markets “We have looked at 25 deals in seven African countries, all of them potentially detrimental to local food security.

“It’s no good just saying that China and India, or hedge funds, or private equity funds, are to blame. The problem is with the development paradigm.

“The IFC comes in and creates a one-stop shop in a poor country to make it easier for foreign investors to purchase land. It is assumed a priori that big commercial agriculture and foreign investment is the way to go.

“But what does it mean that the land is ‘available’? Is this the best use? Is food supply available for local people? Why are these questions not being asked?”

A recent report co-authored by Mittal questioned the IFC’s role in pump-priming foreign investment in Sierra Leone, Ethiopia and Liberia.

In Sierra Leone, the IFC’s Foreign Investment Advisory Service (FIAS) implemented a project to remove administrative barriers to foreign investment and set up an Investment and Export Promotion Agency in 2007.

In 2010 there followed a $400 million deal between Sierra Leone and Addax Bioenergy of Switzerland – the country’s biggest ever agricultural investment – to produce sugar for bioethanol. The Oakland Institute found that local farmers who will be displaced from their land by the project were unaware of the plans.

The report concluded that in prioritizing the improvement of investment climates, the IFC “overlooks the more urgent problems of hunger and poverty”. IFC and FIAS monitoring procedures pay “absolutely no attention” to projects’ impact on hunger and poverty statistics.

The World Bank Group has rebuffed these criticisms. The IFC “consistently recommended that governments implement systematic land regularization programmes that recognize all forms of tenure, formal and customary, including those of pastoralists, or others with weak formal rights”, a spokesman said. The bank’s concern is that large-scale agricultural investment “does not disadvantage smallholder farmers who depend on the land for their livelihoods”.

The RAI principles, formulated by the World Bank, the G-20, the FAO and other international agencies, will come up for discussion again at next month’s meeting of the UN Committee for Food Security in Rome.