IF-EYE Newsletter

Issue #38

Wednesday, February 11, 2009

A publication of the Bank Information Center (BIC)

Welcome to the February 11, 2009 issue of the IF-EYE – the Bank Information Center’s monthly synthesis of key developments concerning international financial institutions. This issue spotlights a BIC report assessing the World Bank's contribution to climate change through its energy sector lending, as well as an info brief detailing the effects of the financial crisis on IFIs in Latin America. Please send suggestions, contributions and subscription requests to: info@bicusa.org. Thanks for reading!

In this issue:

1. SPOTLIGHT: BIC releases report highlighting the World Bank's fossil fuel financing

2. SPOTLIGHT: Global crisis is good news for IFIs in Latin America

3. Civil society updates

4. IFI updates

5. Announcements and Resources

6. New at BIC! BIC welcomes Rebecca Harris as Information Services Coordinator

1. SPOTLIGHT: BIC releases report highlighting the World Bank's fossil fuel financing

2/10/2009 Heike Mainhardt-Gibbs, Bank Information Center

A study conducted by Heike Mainhardt-Gibbs from the Bank Information Center finds that even with important gains in renewable energy and energy efficiency in recent years, the World Bank Group’s overall lending approach to the energy sector does not support developing countries’ transition towards a low-carbon development path. The report shows that World Bank fossil fuel lending is on the rise and has actually increased by 102% relative to only an 11% increase in loans for new renewable energy projects.

The report also emphasizes the extent to which World Bank projects have an impact on global CO2 emissions. “When the fossil fuels involved in the World Bank and IFC lending projects for the 2008 fiscal year are combusted, the project lifetime CO2 emissions from this one-year of financing will amount to approximately 7% of the world’s total annual CO2 emissions from the energy sector, or more than twice as much as all of Africa’s annual energy sector emissions,” emphasized Mainhardt-Gibbs. The report concludes with a call for the World Bank to seriously reassess its approach to financing the development of fossil fuels due to its detrimental impact on climate change and a disproportionately negative impact on developing countries and the poor of this world.

Read the full Info Brief:

World Bank energy sector lending: Encouraging the world's addiction to fossil fuels, by Heike Mainhardt-Gibbs, Bank Information Center, February 2009 (Acrobat pdf, 4.06 MB)

 Read more (BIC website)

2. SPOTLIGHT: Global crisis is good news for IFIs in Latin America

1/9/2009 Vince McElhinny, Bank Information Center

The World Bank and Inter-American Development Bank (IDB) have announced dramatic increases in lending to Latin America in the wake of the global credit squeeze triggered by the U.S. financial collapse.  Crowded to the margin in recent years by demands for financial independence backed by high commodity prices and steadily growing reserves, the World Bank, IDB and International Monetary Fund (IMF) are happily back in business. The majority of South American economies had lowered their exposure to IMF influence, with new Stand-By agreements falling to only two in 2007 (Peru and Honduras, both of which expire in early 2009). In 2005, 80% of IMF's $81 billion loan portfolio was to Latin America. By early 2008, Latin America represented only 1% of the IMF portfolio with nearly all its $17 billion in outstanding loans to Turkey and Pakistan. Prior to the crisis, the total outstanding debt to the IMF in Latin America had fallen dramatically to about $700 million. Their fortunes tethered, the lending portfolios of the international financial institutions (IFIs) had also declined prior to 2007. In the wake of the global financial crisis, IFIs have recently reported sharp lending increases, and in this light, IFI transparency and accountability remain significant concerns.

Read the full Info Brief:

Global crisis is good news for IFIs in Latin America By Vince McElhinny, Bank Information Center, January 9, 2009 (Acrobat pdf, 2771 KB)

3. Civil society updates:

Global economic woes, climate change increase importance of NGO oversight

1/1/2009 Maggie I. Jaruzel, Mott Foundation

International anxiety about the downturn in the financial markets - coupled with growing concern about the impact of climate change - has prompted global government and NGO leaders to take a renewed look at the International Financial Institutions (IFIs). As the global economic market downturn makes it more difficult for developing countries to access loans from private banks, they increasingly look to IFIs for project funding. This has resulted in the IFIs playing a bigger role in the global economy. In this light, NGOs like the Bank Information Center who apply pressure on the IFIs to implement more effective and environmentally sound development practices, are now more important than ever.

Read the full article: 

 Global economic woes, climate change increase importance of NGO oversight, by Maggie I. Jaruzel, Mott Mosaic, Fall/Winter 2008/2009 (Mott Foundation website) 

 Read the full Mott Mosaic Fall/Winter 2008/2009 Newsletter (Mott Foundation website)

Discussing IIRSA at the World Social Forum 2009

1/23/2009 World Social Forum

During the World Social Forum 2009, a group of organizations working together to prevent and/or mitigate social and environmental negative impacts caused by the Initiative for the Integration of Regional Infrastructure in South America (IIRSA) and other harmful development strategies organized a two day workshop for updates and strategy building to inform, discuss, strategize and act in defense of the rights of affected populations and the environment.

The workshop was titled “Challenging IIRSA Mega-Projects for Regional Integration: Priorities, Strategies, Lessons Learned, and Alternative Visions of Integration”.

 Find out more about the World Social Forum 2009 (World Social Forum website)

 Find out more about IIRSA (IIRSA website)

 Read more (BIC website)

Aid reform advocates urge new U.S. administration to act

1/8/2009 Modernizing Foreign Assistance Network

Civil society groups and think tanks working on foreign aid have produced a series of proposals for the new U.S. administration. A new report from Oxfam America gives strong weight to the arguments for a fundamental reform of the US legal framework which governs overseas aid. Such reform is demanded by a coalition of organisations known as the Modernizing Foreign Assistance Network.

 Read more (European Network on Debt and Development website)

4. IFI updates:

World Bank operations in Syria are kept secret

2/5/2009 World Bank

According to the Arabic Syrian daily Al-Watan, a World Bank delegation visiting Syria has met with officials in the Ministry of Transportation to discuss cooperation to reform the transportation sector in the country.  However, the Bank’s research in these areas has not been released publicly, and its policy interventions in these critical sectors remain unknown.

  Read more (BIC website)

China joins IDB in ceremony at Bank headquarters

1/12/2009 Inter-American Development Bank

China formally joined the Inter-American Development Bank (IDB) in a signing and flag placement ceremony held on January 12, 2009 at the IDB’s headquarters in Washington, DC. The Asian giant became the Bank’s 48th member nation, contributing $350 million to various programs.

 Read more (IDB website)

5. Announcements and Resources:

BIC Country Study: The World Bank Group in the West Bank and Gaza

2/1/2009 Bank Information Center

BIC has produced a document analyzing the World Bank Group's involvement in the West Bank and Gaza since the Oslo Accords, including recent trends and analyses of its aid coordination role. The study is primarily designed to provide Palestinian civil society with the knowledge and tools to engage in development policies but also to be able to understand how the World Bank Group may be connected to some key issues affecting the Occupied Palestinian Territories, such as water resources, public infrastructure, and healthcare. 

Read the Country Study:

West Bank & Gaza Country Study, Bank Information Center, February 2009 (Acrobat pdf, 189 KB)

BIC launches Arabic website

The Bank Information Center is very pleased to announce the new fully functional Arabic version of its website! Over the last few months, BIC's Middle East and North Africa Program has been working hard to produce up-to-date and relevant content for the new Arabic site.

 Visit BIC's Arabic-language website (BIC website)

6. New at BIC! BIC welcomes Rebecca Harris as Information Services Coordinator

Becky Harris joined the Bank Information Center as its Information Services Coordinator in January 2009. She previously served on the Steering Committee of Foreign Policy Professionals for Obama, and has worked on policy regarding children’s issues in the developing world, aid effectiveness, and transparency within the extractive industries.  Becky holds a B.A. in Spanish and International Studies from Washington University in St. Louis and a M.A. in International Relations, with concentrations in conflict management and international economics, from the Johns Hopkins School of Advanced International Studies (SAIS).  While at SAIS, she participated in a research trip to Port-au-Prince, Haiti to study the role gangs play in the endemic conflict throughout the country.  She has lived and studied in Spain and Italy and speaks Spanish and French.

Contact Becky at rharris@bicusa.org