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Wednesday, January 26, 2022

Ifc: five star hotels now; jacuzzis next?

IFC; it's all we need


IFC has strangely taken on a profit-making goal
AMIR HOSSAIN | Issue Dated: November 30, -0001, New Delhi
Tags : World Bank | IFC | IEG | Investment projects | Ethiopia |

The fastest growing unit of the World Bank, the International Financial Corporation (IFC) was set up in 1956 with the vision that “people should have the opportunity to escape poverty and improve their lives.” Sadly, the global institution derailed long back from its primary motive and has turned out to be a typical profit-oriented venture. An assessment of IFC brings forth its associations with billionaires, transnational firms and involvement in multinational projects that aim to secure immediate returns for IFC.

Even the fabled downward economic trickle to the poor has not really happened when we see IFC's various projects. And this is something even those in the IFC family accept. A 2011 report prepared by the World Bank’s Independent Evaluation Group (IEG) highlighted that "Most IFC investment projects generate satisfactory returns but do not provide evidence of identifiable opportunities for the poor to participate in, contribute to, or benefit from the economic activities that the project supports." Surprisingly, only 13 per cent of 500 projects "had objectives with an explicit focus on poor people."

Additionally, if we go through the clientele list of IFC, then one can easily see that IFC only likes to work with big corporations and the list contains the who's who of the world – from oil giant ExxonMobil to Grupo Arcor, the huge Argentine candy-maker. An independent review panel suggested in 2003 that the World Bank, including IFC (in 2003), pull out of all oil, natural gas, and coal-mining projects by 2008. That never happened. IFC reported a $2 billion oil-and-gas portfolio, investing with 30 companies in 23 countries in 2011. Sometime back, the European Network on Debt and Development also criticised IFC, while mentioning, "The IFC undermines democracy with its piecemeal, top-down approach to development that follows the priorities of private companies." Exemplifying IFC's senseless investment strategies are its investments in hotels globally. A January 2012 report from the World Bank claims that hotels "play a critical role in development as they catalyse tourism and business infrastructure.” IFC itself accepts that it has invested $2.5 billion in hotels globally since inception. From Mongolia’s Shangri-La Ulaanbaatar 5-star hotel to Maldives' Shangri-La Villingilli 5-star resort, IFC seems to have profoundly lost focus while blubbering its way into 280 odd hotel investments. Shockingly, IFC has even invested in a five star hotel called Movenpick in Acra, Ghana; this at a time when the country’s per capita GDP ranks in the bottom three. If IFC is trying to tell the world that hotel investments are the best method to eradicate poverty, then we guess we all clearly should apologize in unison to IFC and keep clapping the India way, where the world's largest slums surround five star hotels, portraying an abject paradox.

Ethiopia, hold on; your people may not have food; we'll make sure you have five star jacuzzis. The IFC has arrived!

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Issue Dated: Feb 5, 2017