UK must not let World Bank off the hook

Jubilee Debt Campaign is urging the UK government not to let the World Bank off the hook after Hilary Benn, the International Development Secretary, announced he would be paying £50 million withheld in September in a dispute over strings attached to aid and debt relief.

In September 2006, Hilary Benn expressed his concern about "the Bank's use of conditionality" and announced that he was withholding £50m in UK funding to the World Bank "until there is evidence of more progress in this area". In response, the World Bank produced a study, discussed by its Executive Board today, which claims that it is now imposing fewer controversial policy conditions on poor countries, and ensuring that conditions are 'owned' by the countries concerned.

However, Jubilee Debt Campaign is pointing out that the Bank simply has not done enough to be let off the hook.

Use of conditions
The study claims that conditions, particularly in controversial areas, have been reduced. However, this is largely by reclassifying some conditions as 'benchmarks' (which are viewed the same way by poor countries) and by grouping others together as single conditions. Including benchmarks, there are still 38 conditions per loan or grant. There has been some progress in shifting the focus of conditions away from privatisation and liberalisation - but these conditions are still included in about one quarter of the cases. Even one of these conditions is too many. The World Bank and other donors, notably the IMF, is still undermining democracy and damaging livelihoods by using aid and debt relief to force poor countries to adopt controversial policies, such as privatisation of services, or rapid unilateral trade liberalisation.

Ownership
This is one of the key battlegrounds: have the countries actually chosen the conditions for themselves? The World Bank says that, whilst ownership is difficult to assess and admitting that in some cases conditions have given governments "less policy space than desirable", it is doing well in ensuring that conditions are 'owned'. The problem is that the Bank's definition of 'ownership' seems to come from a parallel universe. For a country to 'own' a policy, it must be chosen by its government after public debate, parliamentary scrutiny and a decision by its government. But the World Bank believes a country 'owns' any policy chosen by the Bank and IMF behind closed doors, as long as the government agrees to go along with it. It measures ownership by whether a country implements a policy, not how it was chosen.

What next?
Jubilee Debt Campaign has welcomed the pressure that the UK government has put on the World Bank, including by withholding funding in order to force the Bank to examine its practice, but it must not now let the Bank off the hook. If Hilary Benn is serious about getting the World Bank to change, the UK must continue to link its funding to the removal of undemocratic and harmful conditions, and must work with other governments – both South and North – to secure this.

Take action
Ask Hilary Benn not to let the World Bank off the hook here.