Where did international financial institution's COVID-19 funding go?
Originally published on Global Voices
COVID-19 emergency response activities, Madartek, Basabo, Dhaka. Image via Flickr by UN Women Asia and The Pacific. CC BY-NC-ND 2.0.
Jocelyn Modello, Nadeen Madkour and Siddharth Akali co-authored the post.
We are beginning 2022 with the world reeling under rising Omicron cases. It has been two years since the World Health Organization declared the coronavirus a public health emergency of international concern. And we still have pressing questions around how we shepherd ourselves out of the pandemic, and through the recovery: Who will provide the funds? What will they be spent on? How will we make sure they reach those who need it the most?
International financial institutions (IFIs), like the World Bank, International Monetary Fund, and various regional development banks, have positioned themselves as key players for the global recovery from the economic and social impacts of the pandemic. In 2020, when the first wave of the coronavirus started sweeping the globe, economic experts urged countries to spend and borrow, and they did. IFIs shortened their disbursement timelines to address this urgent demand, and formally or informally did away with many of their environmental and social safeguard requirements.
These institutions have already provided billions of dollars of public money for the pandemic response, promoting a positive image of their funding going to the public sector and to groups that face marginalisation. However, a different narrative emerges from grassroots communities.
Since the early stages of the pandemic, civil society groups from around the world have been calling for a human rights-based approach from the IFIs. Frontline medical workers, journalists, and others directly affected by IFIs’ COVID-19 response have been raising concerns about the risks of exacerbating human rights violations, shrinking space for democratic participation, environmental damages, dilution of environmental and social standards, corruption and mounting debt. Now, there is growing evidence that many of these risks have actualised.
There is a concerning lack of transparency on how IFIs money was spent and what impacts it had on the ground for grassroots communities. However, a series of national-level case studies by members and partners of the Coalition for Human Rights in Development, have been trying to dig in, find the receipts and evaluate impacts and outcomes. “Missing Receipts” — a new collaborative overview of these national and global reports — documents several shortcomings in IFI-funded pandemic responses, and raises serious concerns about whether, and under what conditions, IFI financing is an appropriate solution for the ongoing crisis and future global emergencies.
Screenshot from the report ‘Missing Receipts,’ used with permission.
The research unearthed implementation problems including corruption, crony capitalism, and exclusion of those who needed support the most. Concerningly, women, Indigenous peoples, low-income populations, people with disabilities, and frontline medical workers were often excluded both from the shaping of IFI supported programs, and benefiting from them, as well.
Many developing, lower- and middle-income and post-colonial countries went into the pandemic already in a state of vulnerability born out of neoliberal prescriptions. For decades IFIs have been pushing forward debt-based financing, extractivism-based economies, privatization of basic services, and flexibilizing labor markets. This led to the hollowing out of the public sector, elimination of social protection programs, and enabled corporate capture. IFIs did not take responsibility for these actions and the resulting poverty and inequality. Nor did they change course in their pandemic response. Instead, IFIs vigorously promoted the “private-sector-first” paradigm, focusing on leveraging private investment over supporting countries in rebuilding state capacity for resilience in the long run.
IFIs have pumped out a significant amount of money as part of their pandemic response: civil society’s Early Warning System (EWS) COVID-19 tracker has identified at least 1,500 known projects totaling over 160 billion USD from 15 development banks’ disclosed financing. But the EWS shows that the amount spent on direct benefits to people is significantly lower than what went to the private sector. And while most IFI support was delivered to countries rather than to companies, that is not the full story, since the money that went to the public sector was largely passed on to large corporations.
High-level policy conversations about crisis response, development and financial architecture should incorporate such information from the grassroots and their allies about the actual impact of IFIs’ financing during the pandemic.
Back in 2020, author and activist Arundhati Roy reminded us that, “historically, pandemics have forced humans to break with the past and imagine their world anew.” She suggested that the coronavirus pandemic is a portal, and we can choose both how we walk through it, and also what kind of world we want to walk into.
Today, as countries begin to grapple with the long-term effects of the pandemic, with millions more individuals living in poverty, even more entrenched inequality, a mounting economic and debt crisis, and new waves of COVID-19 continuing to make the news, many are asking: Where did the money from IFIs go? How will our governments pay for these debt obligations? What social programs will be cut in exchange? Is there a better way to weather crises? Is this sustainable development?
To answer these questions, IFIs have to show the receipts. We, the people, need to see where the money went and what impact it had. We also need IFIs to remedy the projects that excluded marginalised groups, where funds were pilfered, or where living beings and the planet were harmed. There has to be meaningful accountability. Governments, academics and high-level policy forums must demand IFIs show the receipts before giving them a bigger role in the pandemic and the recovery.
And as news of the Omicron variant floods our news feeds, we, as civil society, have to remember the pandemic’s portal is still open. We could choose to walk through it, dragging the carcasses of dead ideas of international financial institutions which replicate economic imperialism, misogyny, and ecological crisis. Or we can walk bravely, with love and generosity, ready to imagine and fight for another world where the institutions providing development and crisis financing are community-led, democratic, equitable, and embrace a human rights-based approach.
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