Source: The Guardian
April 16, 2015
by Jeff Furman
For 13 years, the World Bank’s landmark publication, Doing Business, has ranked countries around the world based on how well their regulatory systems serve corporate interests. But far from merely analyzing the business climate across the globe, the annual report has profoundly affected the way that countries deal with regulation.
In 2014 alone, more than 70% of sub-Saharan African governments implemented at least one reform to ease the way for businesses – and, not incidentally, moved up in the World Bank’s ranking. This has resulted in a global competition to lower public interest regulations, diminish environmental and social safeguards, and reduce corporate tax responsibilities – all in the name of doing business.
Dr Jason Hickel of the London School of Economics has called the World Bank’s rankings the “new shock doctrine”. He argues that, with the end of the World Bank and IMF’s structural adjustment programs, the rankings have become the new instrument for driving liberalization reforms around the world.
At the World Bank’s annual meeting last October, I was on a panel that discussed land privatization, one of the major shortcomings of the Doing Business ranking system. Some of my co-panelists gave first-hand testimony about how deregulation and competition to attract foreign investment – encouraged by Doing Business – has fostered large-scale private investment in farmlandin developing countries. As corporations and wealthy investors have grabbed millions of hectares, they’ve displaced thousands of small holder farmers and other rural residents.
To his credit, World Bank Group president Dr Jim Yong Kim has acknowledged that large-scale land acquisitions threaten a way of life for thousands. But little has changed on the ground, and the World Bank staff’s response to our panel was dismissive at best.
The problem may soon be getting worse. At the behest of the G8, the World Bank is developing Enabling the Business of Agriculture, a new project that will apply the Doing Business approach to agriculture. This initiative, funded by four Western governments and the Gates Foundation, is expected to benchmark 40 countries by 2015. It promotes actions that further undermine farmers’ access to land and will make them even more dependent on corporate producers of agricultural materials.
Another perspective
It’s hardly surprising that corporations are constantly pushing for fewer limitations on how they conduct business. But given the impact of this lobbying – as well as the impact that Doing Business has had on regulations around the globe – a fundamental question has emerged about the legitimacy of the World Bank’s list. Is it a true informative project or merely a tool to deregulate business, lower taxes, and shift control of the world’s most fertile land from small holder farmers to large private companies?
Clearly, there are better ways to balance the needs of businesses, citizens and countries. I’ve seen first-hand how a high-road approach to environmental and labor standards can be good for people and the planet, as well as the bottom line.
Instead of the Doing Business list, I would suggest a system that ranks corporations on how they impact the people and the communities where they do business. Among other things, such a system would ask about each company’s track record on social factors, like whether they provides good quality jobs and stays in communities. It would look into each company’s environmental impact and sustainability. It would consider whether companies fulfill their promises, strive toward transparency and pay their taxes.
And – especially in the case of agribusiness ventures – a truly effective system would ask if companies have shown respect and deference to small holder farmers, agro pastoralists, fishing communities, and indigenous populations.
To make this kind of system work, we would need to rethink how we conceptualize value. Shareholder value, of course, would be a major part of this reconsideration, but the larger question of value extends far further.
In some ways, this focus on value is nothing new: companies are constantly rethinking the notion of “creating value”. What’s more, they are also the biggest advocates for using measurements as an instrument for change. They recognize that what you measure influences what you work on.
With that in mind, shouldn’t we encourage a race to the top and not to the bottom? Shouldn’t the World Bank move from Doing Business to creating instead a ranking of corporations that promote fair business?
Businesses are competitive by nature, and a competition to be ranked as the best corporate citizen could inspire some of their most creative instincts. Admittedly, there have already been numerous corporate social responsibility rankings, but none have been conducted by an organization with the World Bank’s financial and political influence. It’s hard to imagine how far the impact of such a ranking could extend.
On the other side, this kind of ranking could pay dividends for the World Bank, which has steadily lost credibility on the global stage as it has increasingly been seen as little more than an agent of corporate interests. If it hopes to turn this image around, the organization needs to stop pursuing “business as usual” policies.
Doing away with the Doing Business rankings would be a good start, and a great way to send the message that the bank will only put its resources behind corporations that have demonstrated a firm commitment to climate justice and human rights.
View Full Article at The Guardian
The World Bank’s race to the bottom
Source: The Guardian
April 16, 2015
by Jeff Furman
For 13 years, the World Bank’s landmark publication, Doing Business, has ranked countries around the world based on how well their regulatory systems serve corporate interests. But far from merely analyzing the business climate across the globe, the annual report has profoundly affected the way that countries deal with regulation.
In 2014 alone, more than 70% of sub-Saharan African governments implemented at least one reform to ease the way for businesses – and, not incidentally, moved up in the World Bank’s ranking. This has resulted in a global competition to lower public interest regulations, diminish environmental and social safeguards, and reduce corporate tax responsibilities – all in the name of doing business.
Dr Jason Hickel of the London School of Economics has called the World Bank’s rankings the “new shock doctrine”. He argues that, with the end of the World Bank and IMF’s structural adjustment programs, the rankings have become the new instrument for driving liberalization reforms around the world.
At the World Bank’s annual meeting last October, I was on a panel that discussed land privatization, one of the major shortcomings of the Doing Business ranking system. Some of my co-panelists gave first-hand testimony about how deregulation and competition to attract foreign investment – encouraged by Doing Business – has fostered large-scale private investment in farmlandin developing countries. As corporations and wealthy investors have grabbed millions of hectares, they’ve displaced thousands of small holder farmers and other rural residents.
To his credit, World Bank Group president Dr Jim Yong Kim has acknowledged that large-scale land acquisitions threaten a way of life for thousands. But little has changed on the ground, and the World Bank staff’s response to our panel was dismissive at best.
The problem may soon be getting worse. At the behest of the G8, the World Bank is developing Enabling the Business of Agriculture, a new project that will apply the Doing Business approach to agriculture. This initiative, funded by four Western governments and the Gates Foundation, is expected to benchmark 40 countries by 2015. It promotes actions that further undermine farmers’ access to land and will make them even more dependent on corporate producers of agricultural materials.
Another perspective
It’s hardly surprising that corporations are constantly pushing for fewer limitations on how they conduct business. But given the impact of this lobbying – as well as the impact that Doing Business has had on regulations around the globe – a fundamental question has emerged about the legitimacy of the World Bank’s list. Is it a true informative project or merely a tool to deregulate business, lower taxes, and shift control of the world’s most fertile land from small holder farmers to large private companies?
Clearly, there are better ways to balance the needs of businesses, citizens and countries. I’ve seen first-hand how a high-road approach to environmental and labor standards can be good for people and the planet, as well as the bottom line.
Instead of the Doing Business list, I would suggest a system that ranks corporations on how they impact the people and the communities where they do business. Among other things, such a system would ask about each company’s track record on social factors, like whether they provides good quality jobs and stays in communities. It would look into each company’s environmental impact and sustainability. It would consider whether companies fulfill their promises, strive toward transparency and pay their taxes.
And – especially in the case of agribusiness ventures – a truly effective system would ask if companies have shown respect and deference to small holder farmers, agro pastoralists, fishing communities, and indigenous populations.
To make this kind of system work, we would need to rethink how we conceptualize value. Shareholder value, of course, would be a major part of this reconsideration, but the larger question of value extends far further.
In some ways, this focus on value is nothing new: companies are constantly rethinking the notion of “creating value”. What’s more, they are also the biggest advocates for using measurements as an instrument for change. They recognize that what you measure influences what you work on.
With that in mind, shouldn’t we encourage a race to the top and not to the bottom? Shouldn’t the World Bank move from Doing Business to creating instead a ranking of corporations that promote fair business?
Businesses are competitive by nature, and a competition to be ranked as the best corporate citizen could inspire some of their most creative instincts. Admittedly, there have already been numerous corporate social responsibility rankings, but none have been conducted by an organization with the World Bank’s financial and political influence. It’s hard to imagine how far the impact of such a ranking could extend.
On the other side, this kind of ranking could pay dividends for the World Bank, which has steadily lost credibility on the global stage as it has increasingly been seen as little more than an agent of corporate interests. If it hopes to turn this image around, the organization needs to stop pursuing “business as usual” policies.
Doing away with the Doing Business rankings would be a good start, and a great way to send the message that the bank will only put its resources behind corporations that have demonstrated a firm commitment to climate justice and human rights.
View Full Article at The Guardian