IDA replenishment: European governments miss major opportunity

(Eurodad) Five days after the EU-Africa Summit, where European governments promised to build fairer partnerships with poor countries they are failing to deliver on their promise. European non-governmental organisations spoke out as European governments gather in Berlin this Thursday and Friday to confirm their financial contributions to the World Bank’s biggest fund to poor countries, the International Development Association (IDA). More than 13,000 people from across Europe have called on their governments to withhold funding from the World Bank until it ends its practices of attaching harmful economic conditions to loans and debt relief, and of funding fossil fuel development.

“European governments should not be taken in by the Bank’s assurances that conditionality is a problem that has been dealt with. Using the Bank’s own figures we’ve found that more than two thirds of loans and grants (71%) from the World Bank’s International Development Agency (IDA) are still linked to sensitive policy reforms on developing countries, mostly privatisation and liberalisation. And stories from communities around the world demonstrate the negative impacts of the Bank’s inappropriate economic policies.” says Alex Wilks, coordinator of the European Network on Debt and Development (EURODAD).

While the World Bank declared its commitment towards combating climate change in Bali, financing for oil and gas remains firmly on its agenda. The Bank increased its support for fossil fuel projects during the past years – by 90% between 2005 and 2006 alone. Investments in renewable energy, which have a double positive result both for climate and poverty reduction, only make up 5% of the budget for all energy projects. “The World Bank refuses to release the information on the overall emissions of the projects financed by the institution”, remarks Elena Gerebizza from Campagna per la Riforma della Banca Mondiale (the Italian World Bank campaign). “Many of these projects have had negative development impacts, responding to the energy needs of western governments and benefiting western oil corporations while harming the climate and poorer people.”

European governments are about to miss the final opportunity in Berlin to send a strong signal to the World Bank that they want to see major reform of the economic model of development that is being forced on poor countries. Without the threat of cuts to its funding, the Bank will be able to continue pursing policies that are devastating the economies and environments of poor countries.