The WB, “policy reforms” and PPPs -- Maximising Finance for Maldevelopment?: Page 2 of 3
was extended until 2020, [x] the WB cited the need to accelerate the relatively low growth rates of the Kenyan economy. It points the need for investments to supposedly “contribute to expansion of the private sector, create jobs and improve equity” such as in petroleum and natural resources. [xi]
Within the MFD, the World Bank boasts of its various roles in Kenyan infrastructure PPPs mainly through the IDA, IFC and MIGA. The WB notes that IDA loaned USD 40 million to the Kenyan government which “helped establish” a 2013 PPP law and another USD 50 million to support possible PPP projects. [xii] This is in tandem with World Bank “technical assistance” for the creation of capital markets, for long-term infrastructure investors. The IFC and MIGA are negotiating with bidders for the first highway PPP in Kenya: the USD 550 million Nairobi-Nakuru-Mau Summit Highway project. The case of the PPP law and other forms of “support” show the use of WB funding to intervene in domestic policy trajectories to further open the gates for the private sector.
In the PPP set-up for the Nairobi-Nakuru-Mau Summit Highway, the “private sector partner” designs, builds, finances, maintains and operates the road. [xiii] It will thereby receive “user fees” such as toll fees. The WB also supports this “user-payer” approach, which “can be used to service the debt raised by the private sector to undertake the project.” [xiv] This case concretises the UN Conference on Trade and Development (UNCTAD) critique of the drive for “bankable” projects, given that private and public interests are not necessarily in correspondence and given compromises in policy space. [xv] In this case, the whole infrastructure project will be surrendered to the would-be contractor, treating the social service as a commodity and not as a right.
Peru: Extracting profits
The World Bank has been active in the country during the 1990s Structural Adjustment Programs that launched deregulation and privatisation, even removing ownership restrictions on land. [xvi] Many critics have pointed out the IFC’s USD 26 million loan to Minera Yanacocha S.R.L, a corporation more than 50% owned by the US’ Newpoint Mining Corporation. These were for the Yanacocha Mine, with succeeding loans for its expansion. Within the last decade WBG presence in Peru included IFC-advised “reforms” that started in 2009, reducing workers’ benefits while facilitating greater entry of foreign investment.
The 2015 Annual Meetings marked Peru as the first Latin American venue in more than four decades. Now Peru is also said to be in the pipeline of countries for the implementation of the MFD approach. Like in other Southern economies, the WB has intervened through encouraging legal and policy “reforms” to accommodate more PPPs. There had been two PPP laws in 2015 and 2016, supported by the IBRD loan and IFC support. The WB declares that by 2018, the Peruvian framework for PPP projects “was mostly complete” [xvii] – strengthening more opportunities for big domestic and international corporations for investment. #
[i] UN Development Programme. “Overview of Social Finance in Indonesia.” http://www.id.undp.org/content/dam/indonesia/2017/doc/INS-report1%20Allied%20crowds.pdf
[ii] The World Bank. 2015. “Indonesia Country Partnership Framework for