Development Déjà Vu

How can the new BRICS bank avoid repeating the same mistakes and egregious human rights violations of the World Bank?

The BRICS countries -- Brazil, Russia, India, China, and South Africa -- announced last week that they are launching two new institutions: the New Development Bank (NDB) and the Contingent Reserve Arrangement (CRA). These institutions are being promoted as complements rather than competitors to the World Bank and International Monetary Fund (IMF), respectively, Western-dominated institutions that have dictated the policies of global development and finance since their inception 70 years ago at the Bretton Woods conference.

The NBD, which is being called the "BRICS bank," will focus on sustainable development and infrastructure, an area in which the demand for investment far outstrips the supply of money, especially in the aftermath of the 2008 global financial crisis. The symbolic importance of the bank's launch is clear, sending a signal that emerging economies are dissatisfied with developed global powers' unwillingness to adapt to a changing, multipolar world order.

But it remains to be seen how the bank and the CRA -- which will provide reserve funds for times of economic crisis -- will actually affect the global architecture of economic policymaking and other geopolitical concerns. Crucially, the NDB's policies must be designed to respect and protect human rights, something the World Bank has failed to do.

BRICS countries, which comprise 40 percent of the world's population and 20 percent of its GDP, have long bristled at their exclusion from the governance of the Bretton Woods institutions. Washington hosts the World Bank, holds the bank's only veto power, and has refused to relinquish its stranglehold on the institution's presidency. Washington's unwillingness to reform the IMF has also provoked frustration. In 2010, for instance, IMF member countries agreed to redistribute voting rights to give more weight to emerging economies -- but the changes were never implemented because the U.S. Congress declined to ratify the agreement.

By contrast, the NDB's commitment to democratic governance is embodied in its power-sharing arrangement. Each member's initial contribution will be $10 billion, and all are granted equal voting rights. India will claim the inaugural presidency, Brazil will head the board of directors, Russia will take the helm of the board of governors, and the bank will be headquartered in China, with a branch in South Africa.

The NDB seems to be offering an alternative development paradigm to the so-called "Washington Consensus," which conditioned international loans on harsh neoliberal policies that required countries to slash social spending, privatize state resources, gut labor and environmental protections, promote free trade, and impose other austerity measures that have harmed rather than helped developing countries. Indeed, the NDB members are drawn from a diverse group of countries with diverging challenges, political systems, values, cultures, and economies. The Fortaleza Declaration, which outlines the NDB's mission, embraces a pluralistic view of development that respects self-determination and innovation. Although the details of the NDB's policies and practices have only been painted in broad strokes, there is a strong sense that the NDB is unlikely to attach strings to its loans; the bank's leaders have signaled their intent to run a bank of projects, not policies.

However, some observers note that despite the NDB's democratic trappings, China is the powerhouse of the group. They caution that China may use the veil of multipolarity to cloak self-serving goals. After all, critics argue, it has deployed development aid in the past to lubricate access to the raw materials and energy necessary to fuel its rapid industrial growth, and the resulting projects have not always been well received by affected communities. (Just one example is the Sinohydro-funded Agua Zarca dam in Honduras, which has generated conflict between the project's backers and an indigenous group that is contesting the destruction of ancestral lands.) The truth is probably somewhere in the middle: China, like all governments, has mixed motives in its aid strategy; it is not an outlier in this regard. But observers fear that infrastructure development funding from the NDB will be geared toward easing corporate and government access to resources, not lifting the world's poor out of poverty -- echoing criticisms leveled at the World Bank.

If this happens, the NBD will be at risk of repeating the mistakes that have plagued the World Bank and have undermined its efficacy and mission for decades. The World Bank has been criticized for failing to incorporate human rights into its policies and operational framework. Civil society organizations, experts, and affected communities have fought to institute reforms, yielding modest improvements, such as the implementation of environmental and social safeguards on projects. Yet these only came after a series of projects that caused repression, displacement, and environmental harms in the 1980s and 1990s, including the Narmada River dams in India, especially the Sardar Sarovar Dam, which incited massive opposition and international opprobrium, and the Chixoy Hydroelectric Dam in Guatemala, which displaced 33 indigenous Maya Achi communities and resulted in the massacre of more than 440 people. (Survivors have still not received reparations.) The World Bank's dispute-resolution mechanism, called the Inspection Panel, was only instituted after the Narmada dam debacle in India, and its power is limited: For instance, it cannot actually pay damages to aggrieved stakeholders.

Troublingly, too, the World Bank may now be diluting some of the very protections that activists fought long and hard to achieve. A leaked draft of the bank's proposed new safeguard policies indicates that protections for marginalized communities and the environment will be weakened. Of particular concern are new policies that, according to the Bank Information Center, a watchdog group, will grant governments "unprecedented latitude over decisions regarding when, how, and, in some cases, even if these policies will be applied to particular Bank projects." In emails leaked in early July, senior bank officials expressed alarm to managers that the proposed changes, which reflect the bank's eagerness to increase lending, would lead to more "problem projects." Human rights and development advocates also fear that the proposed changes pave the way for large-scale power, mining, transportation, and agricultural projects that threaten to unleash environmental destruction and harm the poor communities in which they are located.

Although there is no monolithic view about how to best foster development, reduce inequality, and eradicate poverty, an emerging international consensus supports a framework rooted in human rights, as recognized by global treaties onto which most countries (though not all) have signed. To adopt this framework and avoid the World Bank's pitfalls, the NDB should not jettison conditionality entirely; it should require compliance with human rights norms in projects that it funds.

If it is to truly usher in transformative change, the NDB should be visionary and proactive, not merely reactive. Instead of incorporating reforms after projects have caused incalculable and irreparable damage, the new bank must ensure from the outset that it funds projects that not only comport with and strengthen the social and environmental safeguards that the World Bank has adopted, but also explicitly incorporate the human rights framework that the World Bank has resisted. Indeed, the mandate to respect and protect human rights under international law must be built into the NBD's founding documents and integrated into all its policies and operational guidelines.

The NDB need not start from scratch. It should draw from thoughtful recommendations to the World Bank distilled from the bank's past failures. For example, the NDB should foster the self-determination not only of nations but also of local communities in setting development agendas. It should do this by enlisting the participation of civil society organizations both at the project level and as it sets its overarching mission. This will engender goodwill about the NDB's commitment to policies that include affected communities as partners, not merely subjects.

Because women, the disabled, the poor, linguistic and cultural minorities, and other marginalized groups have been historically excluded from decision-making by international financial institutions, the NDB should also include a nondiscrimination policy that ensures information and consultation are accessible to all groups. Such access can be achieved by, among other things, presenting materials in local languages and in both written and oral form, and displaying sensitivity to the cultural dynamics that may impede participation. Moreover, the NDB should develop tools to accurately assess the human rights implications of projects before they are initiated and assess those implications throughout the project, which requires that the bank be adequately staffed and funded to ensure careful monitoring. And because it is difficult to hold international organizations to account, the NDB should include a waiver of immunity, which would help ensure that it could not shirk responsibility, at least for projects that end up evincing egregious disregard for human rights. Certainly, the bank should include a robust and independent complaint mechanism empowered to make those harmed by projects both heard and compensated.

If the New Development Bank can transcend self-interest and the World Bank's economic orthodoxy, embracing human rights though a clear mission and enforceable policies, it has the potential to advance the dignity and well-being of the globe -- including some of its poorest people. In the world of international institutions, this would be nothing short of a game-changer.

Photo by NELSON ALMEIDA/AFP/Getty Images


How to Isolate Allies and Reward Enemies

By cutting Israel off from the world for 36 hours, the FAA and the White House gave Hamas exactly what it wanted.

Of the Gaza war's many dreadful features, the one that may have the most significant and long-lasting effect is the 36-hour ban U.S. authorities imposed this week on U.S. flights to and from Israel's main airport. How were U.S. interests served by isolating Israel just as terrorists are waging war in hopes of isolating it?

Federal Aviation Administration (FAA) officials justified the ban as a safety measure because a Hamas rocket penetrated Israel's Iron Dome defenses on Tuesday, July 22, and hit a building in a town near Ben Gurion Airport. FAA officials hardly needed to cut the Tel Aviv connection to assure themselves that Israel takes the security of Ben Gurion Airport seriously.

All things considered, it's not credible that FAA officials acted on their own, without regard to the potential foreign, defense, economic, and other effects. But if they did, it's malfeasance. The more reasonable assumption is that U.S. President Barack Obama and his top advisors authorized the ban because they thought it would aid their diplomacy with Israel and Hamas. That's a different type of malfeasance.

Imposed as Secretary of State John Kerry was arriving in Jerusalem to exhort a cease-fire, the ban loomed before Israelis as a threat of worse to come. That was desirable if one saw the war as Israel's fault, but Obama professes to believe that it's not and that Israel has the right to defend itself.

Kerry says his goal is to stop the fighting in Gaza, but that won't necessarily serve U.S. interests, which are to reduce Hamas's capabilities and its support from Palestinians and others. America also has an interest in deterring Hamas, after any cease-fire, from resuming its attacks (by rocket or otherwise) on Israel. And it's important that U.S. policy deter other groups in the world from resorting to terrorism.

A serious deterrence strategy would communicate that terrorism will cause its perpetrators to lose ground politically, not gain it. And that's what was wrong with this FAA ban. It helped Hamas, at home and abroad. Hamas's leaders started the war to isolate Israel, and here's the United States imposing one of the most isolating measures imaginable.

The message is that Hamas rocket attacks are valuable and will become even more so as Hamas improves its ability to target Israel's airports. It makes isolating Israel look not only possible, but easy. It emboldens Israel's Middle Eastern enemies and their comrades abroad in the so-called Boycott, Divestment and Sanctions movement, which strives to cut Israel's ties to the world. It paves the way for flight bans by others (the European Union promptly imposed a similar ban). It allows Hamas to help justify this rocket war. That is, the FAA ban rewarded the very activity that U.S. officials should be penalizing.

The ban will encourage not only future attacks on Ben Gurion Airport, but also on airports in Cairo, Amman, Istanbul, Jakarta, and Manila. Terrorists go to school on one another's operations. If one group can shut an airport down by shooting a rocket in its direction and hitting within a mile or two, then that's a big payoff for small effort.

The Wall Street Journal reports that, in hopes of a cease-fire, Kerry wants Israel's help in "assur[ing] Hamas that Gaza's economic interests would be addressed if the Islamist group stops rocket attacks." Under consideration is "[o]ffering Hamas incentives such as economic aid and freer movement of goods into Gaza and eased restrictions on movement." Kerry is treating Hamas as a respected authority deserving of sympathy, though his own State Department has long designated it as a terrorist organization.

Kerry seems unaware of the character of Hamas. It came into being in 1988 with the issuance of its Covenant, which identifies the group as "one of the links in the chain of the struggle against the Zionist invaders" since before Israel's birth. Affirming faith in the Prophet Mohammed, the Covenant quotes him as saying that the Day of Judgment will not come "until the Muslims fight against the Jews and the Muslims would kill them." Hamas members are committed to "raising the banner of Allah on every inch of Palestine" and declare in the Covenant, "There is no solution to the Palestinian Problem except by Jihad."

U.S. professional diplomats often belittle ideology, presuming that the principle-free pragmatism common among them is more or less a universal trait. But that's a mistake, especially regarding Hamas's leaders, who show sincere attachment to their Covenant. They conduct jihad to discredit, isolate, and eliminate Israel. They are devoted to Allah, to Islam, and to the reconquest of Palestine. Where they are insincere, as the rocket war makes plain, is in their professions of humanitarian concern for ordinary Palestinians.

Like U.S. soldiers, Israeli forces exert themselves to avoid harm to civilians. But Hamas commanders store and operate military equipment in civilian locations, such as the Wafa Hospital in Gaza's Shajaia district and in U.N.-run schools, as U.N. officials have admitted. They do this so Israel cannot defend itself without harming civilians. Hamas's leaders know what they're doing. Sacrificing their own civilians to destroy Israel and promote worldwide jihad is, in their view, moral, indeed noble. Propagandists exploit the heart-rending images and reports of the Arab casualties to stoke sympathy around the world for the anti-Zionist cause.

Hamas has long used suicide bombers. Is its war strategy a type of collective suicide bombing? No, it's worse than that. If a terrorist voluntarily kills himself to hurt his enemy, what he does is evil, but also idealistic (in a perverted way). What's happening now in Gaza is evil without even that perverted idealism. Having built expensive, elaborate underground structures to protect themselves, Hamas's leaders are turning Gaza's civilian population into involuntary victims. There's nothing idealistic about that. Hamas's leaders have interests in conflict with Israel and are serving those interests by causing their people to suffer and die. That's not idealism -- that's oppression.

The Palestinians live in appalling grief because their leaders for nearly a century have been undemocratic, corrupt, violent, and inhumane. The key to bettering their lives and making peace possible is not something that Israel can provide. Rather, it is decent Palestinians rising to oust the scoundrels in power. Weaker communities have overthrown more entrenched regimes.

U.S. officials should be devising incentives for a humane revolution in Palestinian politics. That's a worthy exertion. Shutting down Ben Gurion Airport isn't.

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