NGO: World Bank investments indirectly hurting S-E Asia
WASHINGTON World Bank investments in commercial financial institutions are indirectly allowing land-grabs, evictions and pollution in South-east Asia, a watchdog group charged in a report yesterday.
By investing in banks and other so-called financial intermediaries, World Bank funds can increase poverty, social strife and promote projects which hasten climate change, a report by Inclusive Development International said.
These investments by the World Bank's private financing arm, the International Finance Corporation (IFC), violate its own guidelines on environmental and social conditions, the report by the non-governmental organisation alleges.
"Once again, we have found that outsourcing the World Bank Group's development mandate to private financial institutions is a recipe for disaster," Mr David Pred, the group's managing director, said in a statement.
An IFC spokesman defended the practice, saying they were "essential" to poverty reduction and job creation. "The multiplier effect of FI investments enables us to support far more enterprises critical to development than we would be able to on our own," IFC spokesman Frederick Jones said.
"We work with our FI clients to improve their environment and social risk management practices."
In 2016, IFC poured US$5 billion (S$7 billion) into commercial banks, insurance and private equity firms and others, representing about half of its new annual long-term commitments, according to an internal IFC watchdog.