In an attempt to put the focus on the World Bank’s policies, strategies, and structure, associating the lecture by Emmanuel Mbi representing the bank in Egypt, it seems that a set of critiques is unavoidable. Critics of the World Bank believe that the institution was not started to reduce poverty but rather to support United States’ business interests, and argue that the bank has actually increased poverty while disregarding the environment, public health, and cultural diversity. Some critics also claim that the World Bank has consistently pushed a capitalist agenda, imposing policies on developing countries which have been damaging, destructive, and anti-developmental. A number of intellectuals in developing countries have argued that the World Bank is strongly represented in contemporary forms of donor and NGO-driven imperialism, and that its intellectual output functions to blame the poor for their condition.
On the other hand, the World Bank is criticised as an instrument for the promotion of Western interests in certain regions of the world. The structure of the World Bank reflects the fact that the President of the Bank is always an American, nominated by the President of the United States. There have been accusations that the decision-making structure is undemocratic, as the US effectively has a veto on some constitutional decisions with just over 16% of the shares in the bank. Moreover, decisions can only be passed with votes from countries whose shares total more than 85% of the bank’s shares. A further criticism concerns internal governance and the way in which the World Bank is accused of lacking transparency to the external public and researchers, in addition to fabricating reports in order to pass some intended projects or cover up failures.
Critics of the World Bank are also concerned about the conditionalities imposed on borrower countries. The World Bank often attaches loan conditionalities based on what is termed in the Washington Consensus, focusing on liberalisation of trade, investment, and the financial sector, deregulation, and privatisation of nationalised industries. Often, these conditionalities are attached without due regard for the borrower countries’ individual circumstances, and the prescriptive recommendations by the World Bank frequently fail to resolve the economic problems within these countries.
Concerns also extend to the types of development projects funded by the World Bank. Many infrastructural projects financed by the Bank have social and environmental implications for the populations in the affected areas, with criticism centring on the ethical issues of funding such projects. For example, World Bank-funded construction of hydroelectric dams in many countries has resulted in the displacement of indigenous peoples in those areas. Further criticism arises from the perception that the World Bank, working in partnership with the private sector, undermines the role of the state as the primary provider of essential goods and services, such as healthcare and education, leading to the weakening of such services in countries that are most in need of them. The World Bank’s governance structures, dominated by industrialised countries, are also heavily criticised. Decisions are made and policies implemented by leading industrialised countries like the G7, who represent the largest donors, with limited consultation with poorer, developing nations.
Mbi, however, gave a very interesting presentation about the World Bank’s strategies and activities in the MENA region, which was both positive and promising. He elaborated on the bank’s projects in Egypt, particularly project proposals and related research, which were well presented and ‘planned’. On the other hand, Mbi tried hard to address the above concerns and criticisms of the World Bank’s practices, offering responses that were, to some extent, convincing or at least diplomatically ‘well planned’.
The issue of Egypt was of particular concern. Given that Egypt is a major recipient of USAID assistance in addition to support from donors such as the European Union, the question arose as to why the World Bank does not redirect its focus to other recipients who are in greater need. Mbi justified the Bank’s continued focus on Egypt by highlighting the coordinated arrangements between the World Bank and USAID. These arrangements aim to avoid competition or duplication in targeting developmental objectives. While this explanation appears logical, it does not fully justify the volume of aid Egypt continues to receive. Mbi further noted that USAID budgets in Egypt have been sharply declining, which partially explains the World Bank’s role.
In an attempt to improve the image of the World Bank, Mbi emphasised that the institution, though perceived as being heavily influenced by American pressure, has undergone significant changes under its current president. He described the president’s policies as well-managed and respectable. However, this does not address the underlying issue of why the presidency of the Bank is reserved exclusively for Americans.
Regarding the criticism of structural adjustment and conditionality policies, Mbi shared an intriguing update. Taking Uganda as an example, he stated that the World Bank no longer follows structural adjustment policies or imposes conditionality, as both are now considered outdated practices. He introduced the Bank’s new strategy, termed the ‘Triggering Policy’, accompanied by a shooting gesture with his raised right hand. This approach allows countries to initiate their own changes and propose cooperative projects with the Bank, which are then negotiated. While this strategy appears to grant greater autonomy to borrower countries, scepticism remains. The only change, it seems, is that countries must complete structural adjustments in advance to meet the World Bank’s criteria before their projects are considered for funding.
Concerning past mistakes, Mbi openly acknowledged their existence. He expressed optimism that the Bank’s new systems, policies, and management practices would lead to a more transparent and effective approach to poverty alleviation and sustainable development. This optimism is undoubtedly shared by many, but whether these changes will deliver tangible results remains uncertain.
The World Bank, like any political entity, markets itself as a catalyst for transformative change. However, its promises often remain unfulfilled. Ultimately, only time will determine the success or failure of these claimed changes, as well as the genuineness of its commitment to addressing the complex challenges faced by countries of the Global South.
This article is originally published in English by Southpush.