In October of 2017 the World Bank suspended disbursement of a budget support loan to Myanmar shortly after reports that hundreds of thousands of Rohingya refugees were streaming into Bangladesh to escape horrific persecution at the hands of Myanmar’s military. The move appeared to be an important first step in building an effective response that could help end the violence. However, the killings, sexual violence and other crimes against humanity have continued, and the Bank has failed to take any further public action to address a crisis the UN High Commissioner for Human Rights has called a “textbook example of ethnic cleansing.” As one of the largest sources of aid to the country, and as an important player in the international community, the World Bank’s continued presence supports the government financially as well as politically. In this update, we examine the World Bank’s response to the crisis thus far and explore whether it could be doing more to help the international community end the violence and hold the perpetrators accountable.
Why did the Bank suspend budget support?
Pausing the budget support loan was a significant blow to the government of Myanmar not only because of the size of the loan (at $200 million it would have been one of the Bank’s largest active commitments to the country), but also because of its symbolic importance—the loan would have been the first budget support loan extended to the country since the World Bank re-engaged in 2012 after 25 years. Budget support is also particularly fungible, and could have directly benefitted the perpetrators of the grave crimes committed against the Rohingya.
This move was also consistent with actions the World Bank has taken in the past in response to human rights abuses in its client countries. In Ethiopia, for example, the Bank ended direct budget support to the country in 2005 after disputed elections resulted in the deaths of hundreds of protesters at the hands of police. A loan to Uganda was also pulled back in 2014 after a highly discriminatory law was passed that would have allowed LGBTI people to be thrown in jail for life if they committed acts of “aggravated homosexuality” or the “promotion of homosexuality.” However, while the human rights violations in Ethiopia and Uganda were serious, neither rose to the level of genocide, and the World Bank would have been justified by taking a stronger stance in this case.
What has the World Bank done in Myanmar since suspending the loan last year?
After suspending the budget support loan, and issuing a brief statement of concern, the World Bank adopted a relatively low profile with respect to the crisis. There is little public information about the budget support loan, or the conditions the Bank is requiring the government of Myanmar to meet before disbursements can begin. To be sure, the World Bank seems to be doing what it can to help Bangladesh support the influx of refugees and encourage the international community to take further action to assist that host country which is under significant strain. However, it has also continued to publicly commit future Bank resources to Myanmar’s government despite the ongoing violence. In addition, the Bank issued a head-scratching joint report on Myanmar with UNDP in June, which described living conditions in the country as “improving” but lamented the “lagging” development outcomes in Rakhine State—without mentioning the ongoing crisis occurring in the region.
Why hasn’t the World Bank done more to stop the crisis?
The main reason the Bank seems to have stumbled in its response to this case is that it has no mechanism to trigger a formal, predictable response to gross violations of human rights committed by its clients—even if those violations amount to genocide. As noted above, in countries like Ethiopia and Uganda World Bank leadership has shown a willingness to respond to human rights abuses, but those responses have been ad hoc and—in the case of Myanmar—disproportional to the abuses that have occurred. This contributes to a troubling lack of certainty around whether and how the World Bank will act when borrowing countries are involved in atrocities against their own citizens.
To its credit, the World Bank has issued strong, public commitments to address discrimination through its work. For example, in 2014, after deciding to pull the loan to Uganda over its LGBTI law, President Jim Kim published an opinion piece in the Washington Post saying, “Eliminating discrimination is not only the right thing to do; it’s also critical to ensure that we have sustained, balanced and inclusive economic growth in all societies — whether in developed or developing nations, the North or the South, America or Africa… My view is that the fight to eliminate all institutionalized discrimination is an urgent task.” Nevertheless, four years later it is totally unclear how the Bank's activities in Myanmar or anywhere else are contributing to ending discrimination. A Bank directive issued in 2016 instructs staff to assist borrowers in addressing discrimination in the context of specific projects, but it is silent on how the Bank can or should engage in countries where discrimination is systemic and contributes to escalating violence and even genocide. As Congresswoman Maxine Waters stated in a letter sent to President Kim last week, “The Bank cannot claim to support inclusive, broad-based development and growth in a country in which the military has been credibly accused of war crimes and crimes against humanity against thousands of its own people.”
What should the World Bank do now?
For the last several weeks, pressure has been mounting on the international community to take action. The killings, sexual violence, and other atrocities have continued, and the government has done little to tackle the root causes of the crisis, including the climate of fear and hatred that persist. An independent UN Fact Finding Mission recently called on the international community as a whole to ensure perpetrators are brought to justice, stating that “the impetus for accountability must come from the international community.” The World Bank is an integral part of this community, and must work in coordination with the UN, civil society and other stakeholders to ensure that the role it is playing in both Bangladesh and Myanmar supports the conditions necessary for accountability and justice, including by ensuring its projects and programs do not compromise the collection and preservation of evidence for use in future trials and that repatriation of refugees and the return of internally displaced persons occurs only when safe, voluntary, dignified conditions are in place.
In order to ensure it has a predictable, coherent approach to situations like this in the future, the Bank should also adopt a clear policy that allows for a strong and effective World Bank Group response to gross violations of human rights. The Bank is not a human rights institution, and its response must necessarily be different from other members of the international community that have clear mandates to investigate and prosecute international crimes such as genocide. But its role can and must be complementary to those institutions, and should never provide a veneer of legitimacy to perpetrators of serious international crimes. The Bank must place robust, transparent conditions on the public resources it provides to countries like Myanmar, and where the line is crossed there must be a predictable, public response such that every member state is put on notice what will and will not be tolerated by the world’s preeminent development finance institution. Anything less legitimizes the actions of countries like Myanmar, and supports the gross violations of human rights for which they are responsible.
"The Bank cannot claim to support inclusive, broad-based development and growth in a country in which the military has been credibly accused of war crimes and crimes against humanity against thousands of its own people."