Source: Todd Moss, Center for Global Development
The World Bank is supposed to work with poor countries in distress. When it all goes well, the Bank supports reformers with advice and money. Sometimes, however, the Bank prolongs a country’s pain by throwing a lifeline to recalcitrant regimes. The difference between a helping hand and a counterproductive crutch requires the Bank to understand the trends inside a country and how its own actions might affect those dynamics. Often, it’s difficult to discern these subtleties. Not in the case of Zimbabwe—where a leaked draft report suggests that the Bank could do business there again if human right abuses “level off.” You can read it for yourself—I’ve linked to it below—but I’ve already been through it and it’s pretty extraordinary.
The backdrop is that Robert Mugabe’s government is literally running out of cash and wants new loans. But the World Bank can’t lend to his government because it hasn’t repaid its old loans for the past 17 years. So before Mugabe can start borrowing again, his government must first clear the $1.8bn in arrears that it owes to the World Bank, International Monetary Fund, and African Development Bank. Since the country doesn’t have the money, its finance minister has proposed a raft of new loans and accounting maneuvers (PDF) to clear the tab. Part of the financing will supposedly come from a special rescue fund created by donors like the UK and US.
Shareholders of the international financial institutions expect borrowers to meet some minimal standards of human rights and governance before receiving help from their taxpayers. Thus, if Zimbabwe wants others to pay off its arrears and for lending to restart, Mugabe’s government must convince the world that it’s serious about reforms. This is a pretty tall order given that a small cabal has run the country for the past 36 years. These very same people are responsible for decimating the economy, stealing elections, and repeatedly committing gross human rights violations. But the cabal is now promising they have changed.
It’s hard to take such claims too seriously since the government is still denying any responsibility for the disappearance of activist Itai Dzamara, while just within the past few days, the regime has been openly beating protestors in the streets and threatening more violence against civilians. The United States Congress is clearly not buying it.
The first step in the process is a green light from the IMF. Zimbabwe should easily meet the IMF’s overly narrow technical targets while the IMF has hinted it is preparing to go along. The next step, convincing the World Bank, should be a higher bar since its mandate includes broader governance. The Bank is currently trying to figure out if the Government of Zimbabwe is truly committed to reform or just play-acting in order to get the money it desperately needs.
Such a decision is usually made in a black box. Ordinary Zimbabweans and Western taxpayers would normally have no idea what the Zimbabwe government is pledging to do, nor what the World Bank really thinks is going on in the country. But this time, the public has a revealing window into the Bank staff’s views of Zimbabwe’s progress: a leaked copy of the World Bank’s draft “Turnaround Eligibility Note for Zimbabwe,” dated 27 July 2016. Readers can judge for themselves if the Bank’s analysis bears any resemblance to reality or if the arguments for engagement are convincing. (My verdicts: no and hell no.)
Let me call attention, however, to one section that particularly struck me: On page 29, the Bank proposes an indicator of progress would be “Number of alleged human rights violations level off or decline…”
Reading this literally turned my stomach. It fits with the worst conspiracy theories that critics have of the World Bank—that it’s an unaccountable behemoth plotting in secret to bankroll tyrants, undermine democracy, and destroy communities. I don’t believe any of that. I briefly worked at the World Bank, I’ve researched the World Bank for most of my career, and I have largely defended the World Bank. It’s an essential institution for tackling some of the world’s toughest global problems. And it’s mostly filled with smart, honorable, hard-working people dedicated to ending poverty.
That’s why this document makes me sick.
For the World Bank to move ahead with funding for Zimbabwe based on this naïve and deeply flawed analysis would be a colossal mistake. Doing so in the hope that human rights violations “level off” is an affront to the very reason the World Bank exists. It’s also entirely counter to the Bank’s new safeguards, launched less than a month ago, which are supposed to increase the focus on human rights.
But it’s not too late. President Jim Kim must squash this immediately. Barring clear action from Bank management, the shareholders like the US and UK must do the right thing and block this nonsense before it goes any further. Bankrolling Mugabe on the delusional premise that it would benefit ordinary people and encourage reform is harmful to millions of suffering Zimbabweans—and would cause irreparable damage to the credibility of the World Bank and its shareholders.
Source: Todd Moss, Center for Global Development