World Bank Riddled With Major Flaws : Doing Business Report Is Just the Tip of the Iceberg
–FOR IMMEDIATE RELEASE—
September 23, 2021
Washington DC, USA
The World Bank has announced that it will discontinue the publication of its flagship Doing Business Reports (DBR). The decision came after a series of internal audits and the publication of a damning investigation that revealed serious ethical improprieties, conflict of interest within the Bank’s advisory services and data manipulation in the development of the Doing Business rankings.
The termination of the Doing Business Report marks a major victory for over 360 civil society organisations, academics and trade unions from 80 countries who demanded the World Bank to stop publishing its Doing Business Rankings earlier this year and for all those who have advocated the same since the report’s inception.
Since the Doing Business Report’s launch in 2003, the World Bank has ranked countries on the “ease of doing business” and guided regulatory changes attractive to private investors with scant regard to the fact that what is good for business is not always good for people and the planet. The Bank has documented more than 3,800 policy changes related to the Doing Business report, including lowering corporate taxes, reducing contributions to workers’ pensions or healthcare and relaxing environmental protection rules. “The World Bank’s decision comes 18 years too late. Much harm has been done in countries cutting back social and environmental standards and deregulating their economies to climb on the rankings. We remain concerned by the Bank’s commitment to advance the role of the private sector in development through new assessment methods. If shape and form change but content remains the same, the Bank’s ideological prescriptions will lead to equally harmful impacts and deepen inequalities,” said Flora Sonkin, Society for International Development (SID), USA.
The discontinuation of the Doing Business Report is testament to the fact that the current global finance, debt, and economic architecture is not fit for developing countries’ structural transformation needs and to global commitments under the 2030 Agenda. “Policies informed by approaches and methodologies aimed at benefiting wealthy countries and multinational corporations have been the order of the day at the expense of African economies,” added Adrian Chikowore, African Forum and Network on Debt and Development (AFRODAD), Zimbabwe.
The latest Doing Business scandal reveals deeper institutional flaws that include corruption and political handling of research and analysis. It also raises questions on what other methodological leeways were given in the development of World Bank statistics, which ultimately impact widely used development indicators. “The data rigging found in the report is merely the tip of the iceberg and the legitimacy crisis of the World Bank Group extends deeper into its biased narratives, ideologies and policy agenda which supports private returns at the expense of public interest regulations that safeguard social equity and the environment. A new manifestation of the Doing Business Report that continues to promote global tax competition, labor rights deregulation and environmental harms must be prevented at all costs,” said Chee Yoke Ling, Third World Network, Malaysia. She added that the World Bank Group must stop standing in the way of an active developmental role of states to sustainably diversify developing country economies and generate decent work opportunities that protect the environment for an actual green and just recovery.
A structural overhaul of World Bank’s policies and governance mechanisms is the need of the hour for it to have any credibility left. “The Doing Business case revealed the internal accountability deficit of the World Bank. Its announcement to discontinue the rankings along with personal penalties are not enough. The external investigation highlights once again the structural problems of the institution. Far-reaching reforms with regard to internal accountability structures are necessary and external control is urgently needed,” said Dustin Schäfer, Campaigner at Urgewald, Germany.
Roberto Bissio, Social Watch, Uruguay, added, “Corruption is not only a matter of the Bank’s flagship publication or political manipulation by its management. It is also deeply ingrained in the way the World Bank picks who it supports through its private-sector lending window, the International Finance Corporation (IFC). Only diplomatic immunity saves the World Bank’ private sector lending from a landslide of corruption cases.”
In fact, the Doing Business data-tampering is only the latest in a long list of wrongdoings by the World Bank Group. An institution ridden with conflicts of interest and marked by an unaccountable and undemocratic governance structure should not be defining what makes good economic advice for the world.
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