My former colleagues at the Bretton Woods Project have just published their bi-monthly Bretton Woods Update with a cover article summarising some of the key issues that whoever wins the Presidency will have to tackle. Worth reading in full, but here are some snippets, the first on the rise of emerging markets:
One of the most pressing issues is how to work effectively with large emerging market countries. At a BRICS (Brazil, Russia, India, China and South Africa) summit at end March, the leaders called for “a multilateral institution that truly reflects the vision of all its members, including the governance structure that reflects current economic and political reality.” While governance reform is not strictly in the power of the Bank president, the president can argue for and demand changes in the alignment of power among shareholders. And then, according to Roberto Bissio, coordinator of NGO network Social Watch, “the Bank should practice what it preaches and welcome some competition”.
They have another article specifically on this topic. More snippets, starting with human rights…
While sorting out a bigger role for middle-income countries, the next Bank president is also being called upon to protect the rights of people affected by Bank projects. The Bank currently does not recognise that it has a duty to respect and protect human rights, generally categorising human rights as ‘political’ rather than ‘economic’ or ‘poverty’ related. Titi Soentoro of Indonesian NGO Aksi said, “if the Bank is going to boost the role of middle-income countries that must go hand-in-hand with strengthened environmental and social safeguards.”
… the environment…
The environment is one of the key battlegrounds for the next administration, with past efforts to dub the Bank an “environment bank” annoying civil society groups who have long pointed to the damage done by Bank-funded projects, not least because of its funding of fossil fuel power plants while ignoring the needs of vulnerable people for energy access.
…and private finance….
Finally, while the past decade has seen a trend of the Bank’s direct finance to middle-income country governments shrinking as a proportion of their total financing, there has been a massive increase in the size of the Bank’s private sector operations through the International Finance Corporation (IFC), where it is lending increasing amounts to corporate operations in middle-income countries. Additionally, the IFC is starting to adopt financial structures used by Wall Street investment banks, with half of its funding is now being routed through financial intermediaries.