World Bank "trillions": More PPPs, even worse days of privatisation?: Page 2 of 3

Posted on 23 August 2017

with an average cost increase of USD 30 million per addendum. [12] Also, PPPs in Latin America linked to the firm Odebrecht -- which received USD 50 million in IFC credit guarantees in 2011 -- have recently met a corruption scandal; a PPP in Magdalena River in Colombia has faced the opposition of communities left unconsulted by a largely Odebrecht-owned firm. [13]

Thus WBG’s perceived role as an “honest middleman” between capital and the poor in the global South actually betrays a bias for the former, at the expense of development for the marginalised. The agenda for big private sector investments in such onerous PPPs in developing countries, or what it calls “emerging markets,” is also seen as “motivated by the needs of investment funds (including pension funds) in developed countries that face very low or even negative interest rates at home.” [14]

Currently, the IFC and the Multilateral Investment Guarantee Agency (MIGA) will likely be central to the PPP agenda as the private sector and the political risk insurance arm of the WBG, respectively. The IFC is expected to pursue its “advisory” function to governments and businesses [15] to make developing countries, especially conflict-affected ones, attractive to corporate investors. [16] On the other side of the coin, new efforts of the IFC in stimulating large sums of private finance for investment in developing countries are through its Managed Co-Lending Portfolio Program (MCPP). [17][18] The MIGA’s role is expected to be important in protecting corporate investors through insurance for political events that might cause loss of profits.

Such WBG mechanisms further protect and privilege corporations. But where are international instruments that could hold corporations accountable? Currently, a “ legally binding treaty on transnational corporations and human rights” is on the agenda for a United Nations working group. [19] This could be a potential mechanism to hold corporations and WBG-promoted PPPs liable to the threats they pose to people’s rights and access to services and people-centred development. Civil society organisations, however, will have to be vigilant about its possibilities and limits.

Aside from holding corporations accountable, one needs to ask: to what extent do people and communities have a role in processes that affect them?The case of the Colombia water transport PPP reveals how the people could be absent in development decisions. In another PPP, for a hospital in Lesotho, the IFC’s role as “transaction advisor” was reported to include acting on behalf of the government in the negotiation process. [20] Thus peoples in the global South will have to demand both broader peoples’ participation in national development processes, and to push state actors to assert national sovereignty against continued IFC efforts to “advise” their governments.

It is also ever pertinent to assert universal access to basic social services especially in the global South and stress that this is a government responsibility. Slovenia, for instance, made water a constitutional right (“water resources…are not a market commodity”) [21] in reaction to threats of broadening corporate control. [22] As part of measures to regulate private sector actors and ensure their potential development contributions, transparency

PDF icon II Statement on WB trillions_final.pdf107.47 KB
Global Region: