A $600 million World Bank loan to Ethiopia’s authoritarian government lacks proper oversight and “reinvents” a previous loan that was used by the Ethiopian regime to finance violent evictions of indigenous people, a new report by the human rights advocacy group The Oakland Institute charges.
The report also contends that the U.S. Treasury Department violated orders from Congress to oppose any development project in Ethiopia that contributes to forced evictions. The Treasury Department’s representative on the World Bank’s governing board voted in favor of the new project, despite its similarity to the last one, the report says.
“It’s pretty much a mirror image of the old program,” said Anuradha Mittal, the executive director of the Oakland Institute.
The World Bank declined to answer detailed questions about its recent loan, but referred ICIJ to project documents that describe new conditions for citizen engagement and financial oversight that are linked to disbursement of the money. The U.S. Executive Director at the World Bank and a spokeswoman for the Treasury Department did not respond to ICIJ’s email and telephone inquiries.
The World Bank’s loan comes in the midst of a crackdown on dissent by Ethiopia’s federal government. Activists are being jailed and dozens of people have been killed by federal forces firing live ammunition into protests, according to Human Rights Watch.
Felix Horne, an Ethiopia researcher for Human Rights Watch, cited the case of Omot Agwa, a former translator for the World Bank who was charged under Ethiopia’s infamous Anti-Terrorism Law after helping the bank’s investigators probe allegations of forced evictions of indigenous people linked to a previous project. Agwa has been in prison for a year while the World Bank has declined to speak out publicly on his arrest.
“In Ethiopia there is zero space to express dissent,” Horne said. “Anyone who is brave enough to do that at the low end ends up being harassed, and at the high end is charged under the Anti-Terrorism Law.”
In the current environment, Horne said that the World Bank’s plan for citizens and communities to report abuses – through tools such its Grievance Redress Mechanism and Ethiopia’s Institute of the Ombudsman – is not realistic.
“Sitting in an office in D.C., it sounds good on paper,” Horne said. “In practice in Ethiopia, no one would use those mechanisms.”
Ethiopian officials have also made statements about resuming the “villagization” program, the mass relocation campaign that moved indigenous people into centralized villages at sites selected by the government, and often resorted to violence to compel those who resisted. On March 13, federal Deputy Prime Minister Demeke Mekonnen called on Ethiopian states to expand their villagization efforts.
The controversy began with a decade-long, $2 billion World Bank aid initiative. The loan program’s last installment was called the Promoting Basic Services Program, which supported healthcare, education and other vital services in Ethiopia. Human rights groups reported that money for the program was being diverted from its humanitarian goals to finance the villagization campaign, but the World Bank rejected their claims and continued to pour hundreds of millions of dollars into the basic services program.
“To use a system of safeguards that is applied by a government that has a history of human rights abuses is irresponsible.” – Anuradha Mittal, The Oakland Institute
In April 2015, ICIJ reported that the former governor of the western state of Gambella described personally diverting roughly $10 million in World Bank money intended for the health and education program to finance a series of violent evictions.
Several months later, a proposed new $600 million loan to Ethiopia came to a vote before the World Bank board. The Enhancing Shared Prosperity through Equitable Services (ESPES) project shared the previous initiative’s goal of supporting basic services across Ethiopia, as well as its approach of providing block grants to Ethiopia’s federal government to disburse to regional and local authorities.
The board’s most powerful member, the United States, had abstained from voting in favor of all three installments of the basic services program. For each of the years from 2014 through 2016, the U.S. Congress has directed the U.S. to vote against any development projects in Ethiopia that involve forced evictions in language that it included in budget bills. Last February, the U.S. criticized the bank’s handling of the basic services project as being focused “too much on ‘reputational risks’ in projects, instead of actual operational risks to communities.”
But when the ESPES project came to a vote, the U. S. cast its lot in favor, and the program was approved last September.
There is a significant difference between the basic services and ESPES projects: the current loan is not a traditional “investment loan” but instead falls under a new World Bank system called the Program for Results.
Projects funded through the Program for Results require borrowers to show results in order for loan payments to continue, and the ESPES program includes 11 “disbursement linked indicators” that are tied to the project’s funding. Among these indicators are improved financial oversight, more citizen engagement, and better response by local governments to fraud and corruption complaints.
However, Program for Results projects are not subject to World Bank “safeguard” policies that are supposed to protect local communities from potential harm linked to development projects. Instead, the bank relies on borrowers to use their own institutions to police themselves.
“To use a system of safeguards that is applied by a government that has a history of human rights abuses is irresponsible,” said Mittal of the Oakland Institute. “I think it is a way for the World Bank to wash its hands of any responsibility.”
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