An ethical bank?

The World Bank tries to reinvent itself.

The World Bank – the globe’s largest anti-poverty agency – has a new chief. Jim Yong Kim, an activist doctor whose five-year term began on 1 July, will have his work cut out for him. Running the 9,000-employee development powerhouse has always been one of the toughest jobs in the world, and a successful bank chief must be in almost equal measures a diplomat, financier and intellectual.

How to lift people out of poverty – the Bank’s main mission – remains one of the enduring mysteries of modern economics. A vast body of research and experience fails to provide any simple lessons. Like his 11 predecessors as Bank president, Kim will need considerable diplomatic poise. The organisation has 188 member nations all wanting a say in how it works. With a loan book of roughly $200bn, it is a formidable financial institution. Last year alone it committed $57bn to developing nations.

As if this were not challenge enough, the World Bank has gone through something of an identity crisis in recent years. Not long ago it was the biggest single source of lending for many poor countries, funding everything from massive dam and road projects to health and education plans. Recently, however, some of its most reliable clients – notably China and India – have become less reliant on its largesse. Meanwhile, the World Bank is left with crisis-ridden states like Sudan and Haiti, some of the hardest nations to assist. As its financial importance shrinks, the World Bank has needed to forge a new role.

At the heart of the Bank’s soul searching is a surprising statistic. Despite a global recession and surging food prices, poverty has been falling in all parts of the globe for the first time since the World Bank started collecting figures in 1981. In 2010 the number of people living on less than $1.25 a day – the Bank’s definition of extreme poverty – was about half the level it was in 1990. As a result, the world hit the United Nations’ target of halving poverty between 1990 and 2015 five years ahead of schedule. The share of the world’s population below the poverty line has plunged from 43 per cent in 1990 to 22 per cent in 2008.

The biggest progress has been made in China. This nation alone has managed to lift 660 million out of poverty since 1981. But China is not the only nation to be making economic progress. Developing nations through Asia, Africa and Latin America have been enjoying far faster rates of economic growth. "The reward has been ready access to international capital markets, which has meant that World Bank money is less important," says Claudio Loser, a former director of the Western Hemisphere for the International Monetary Fund. Last year the Bank’s net funding for middle-income countries, such as Turkey, was a mere $8bn. That compares to $910bn in private inflows into emerging markets in the same year, according to the Institute for International Finance.

 Dr Kim takes over an institution in flux. Its financial heft has failed to keep pace with expanding global capital flows. It is also less likely to be able to boss poor nations around than it did in the past. Nonetheless, the Bank remains the globe’s leading source of expertise on development. While extreme poverty appears to be retreating, over 2bn people still struggle to meet their basic needs. A dynamic World Bank is as necessary as ever.

This article can be read in full in economia.


Jim Yong Kim, Photograph: Getty Images

Christopher Alkan

Photo: Getty
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The Prevent strategy needs a rethink, not a rebrand

A bad policy by any other name is still a bad policy.

Yesterday the Home Affairs Select Committee published its report on radicalization in the UK. While the focus of the coverage has been on its claim that social media companies like Facebook, Twitter and YouTube are “consciously failing” to combat the promotion of terrorism and extremism, it also reported on Prevent. The report rightly engages with criticism of Prevent, acknowledging how it has affected the Muslim community and calling for it to become more transparent:

“The concerns about Prevent amongst the communities most affected by it must be addressed. Otherwise it will continue to be viewed with suspicion by many, and by some as “toxic”… The government must be more transparent about what it is doing on the Prevent strategy, including by publicising its engagement activities, and providing updates on outcomes, through an easily accessible online portal.”

While this acknowledgement is good news, it is hard to see how real change will occur. As I have written previously, as Prevent has become more entrenched in British society, it has also become more secretive. For example, in August 2013, I lodged FOI requests to designated Prevent priority areas, asking for the most up-to-date Prevent funding information, including what projects received funding and details of any project engaging specifically with far-right extremism. I lodged almost identical requests between 2008 and 2009, all of which were successful. All but one of the 2013 requests were denied.

This denial is significant. Before the 2011 review, the Prevent strategy distributed money to help local authorities fight violent extremism and in doing so identified priority areas based solely on demographics. Any local authority with a Muslim population of at least five per cent was automatically given Prevent funding. The 2011 review pledged to end this. It further promised to expand Prevent to include far-right extremism and stop its use in community cohesion projects. Through these FOI requests I was trying to find out whether or not the 2011 pledges had been met. But with the blanket denial of information, I was left in the dark.

It is telling that the report’s concerns with Prevent are not new and have in fact been highlighted in several reports by the same Home Affairs Select Committee, as well as numerous reports by NGOs. But nothing has changed. In fact, the only change proposed by the report is to give Prevent a new name: Engage. But the problem was never the name. Prevent relies on the premise that terrorism and extremism are inherently connected with Islam, and until this is changed, it will continue to be at best counter-productive, and at worst, deeply discriminatory.

In his evidence to the committee, David Anderson, the independent ombudsman of terrorism legislation, has called for an independent review of the Prevent strategy. This would be a start. However, more is required. What is needed is a radical new approach to counter-terrorism and counter-extremism, one that targets all forms of extremism and that does not stigmatise or stereotype those affected.

Such an approach has been pioneered in the Danish town of Aarhus. Faced with increased numbers of youngsters leaving Aarhus for Syria, police officers made it clear that those who had travelled to Syria were welcome to come home, where they would receive help with going back to school, finding a place to live and whatever else was necessary for them to find their way back to Danish society.  Known as the ‘Aarhus model’, this approach focuses on inclusion, mentorship and non-criminalisation. It is the opposite of Prevent, which has from its very start framed British Muslims as a particularly deviant suspect community.

We need to change the narrative of counter-terrorism in the UK, but a narrative is not changed by a new title. Just as a rose by any other name would smell as sweet, a bad policy by any other name is still a bad policy. While the Home Affairs Select Committee concern about Prevent is welcomed, real action is needed. This will involve actually engaging with the Muslim community, listening to their concerns and not dismissing them as misunderstandings. It will require serious investigation of the damages caused by new Prevent statutory duty, something which the report does acknowledge as a concern.  Finally, real action on Prevent in particular, but extremism in general, will require developing a wide-ranging counter-extremism strategy that directly engages with far-right extremism. This has been notably absent from today’s report, even though far-right extremism is on the rise. After all, far-right extremists make up half of all counter-radicalization referrals in Yorkshire, and 30 per cent of the caseload in the east Midlands.

It will also require changing the way we think about those who are radicalized. The Aarhus model proves that such a change is possible. Radicalization is indeed a real problem, one imagines it will be even more so considering the country’s flagship counter-radicalization strategy remains problematic and ineffective. In the end, Prevent may be renamed a thousand times, but unless real effort is put in actually changing the strategy, it will remain toxic. 

Dr Maria Norris works at London School of Economics and Political Science. She tweets as @MariaWNorris.