Monday, May 17, 2010

Africa now has less say in World Bank decisions

Voting power in the World Bank has changed to reflect the GDP of individual countries. The World Bank says that emerging nations now have more voting power and influence in Bank decisions. This is great for countries like China, India and Brazil, but Sub-Saharan Africa has lost some of it's voting power.

From the IPS, writer Hilaire Avril has this summary of the changes.

Eighteen sub-Saharan countries have thus lost a measure of their already modest influence in the institution’s decision-making process. Nigeria and South Africa are hardest hit, their voting powers having been decreased by about 10 percent.

Only oil-rich Sudan - whose president has been indicted by the International Criminal Court on suspicion of war crimes - has seen its share of votes increase.

The World Bank, internationally mandated with financing development projects, has long been criticised by civil society and recipient countries as unrepresentative of those it claims to be helping. Sub-Saharan Africa, the target of many of its "poverty reduction" programmes, retains a total of less than six percent of the institution’s voting rights.

Finally responding to critics, the Bank has in recent years indicated some intention towards reforming its governance and making it more inclusive of its purported beneficiaries. Its Istanbul Declaration of October 2009 committed to "protect the voting power of the smallest poor countries".

But on Apr 25, it shuffled voting rights to increase the share of China (by 1.64 percent), South Korea (0.58 percent), Turkey (0.55 percent), Mexico (0.5 percent), and Singapore (0.24 percent). According to the Bank’s own economic definitions, South Korea and Singapore are high-income countries, whereas Mexico and Turkey are upper middle-income countries.

Criticising the adjustments, head of research for anti-poverty campaigner Oxfam, Duncan Green, noted in a blog entry titled "The World Bank breaks its promises on Africa’s voting power" that "the reform reflects the shift in global GDP (gross domestic product), and so benefits the big emerging economies, not the slower growing economies in Africa".

Adds Sebastien Fourmy, who follows global financial institutions at Oxfam’s French chapter: "This reform is an attempt at making nice with the main emerging world players, such as China and Brazil, in the hope that they will contribute a larger share of the Bank’s funding.

"This comes at a point where Europe has growing difficulties in meeting its financial commitments to development," he explains. "European countries have therefore agreed to a minor reduction in their voting powers but most are still clinging to their chairs."

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