Bretton Woods Project - Critical voices on the World Bank and IMF

Jump to main content | Jump to sidebar | Jump to navigation menu

5-star development the IFC's new corporate welfare projects

News|Bretton Woods Project|26 June 2013|update 86|url
print|email |bookmark FacebookTweet thisdel.icio.usDigg!Stumble UponRedditGoogle BookmarksYahoo Buzz

Controversial International Finance Corporation (IFC, the Bank's private sector arm) investments in tourism and infrastructure projects continue, prompting a new complaint to its accountibility mechanism, the Compliance Advisor/Ombudsman (CAO).

Continuing its trend of investing in tourism projects (see Update 84), the IFC is branching out into less established tourist centres. It justified its May $26 million investment in the "Palma Guinea" Sheraton in Conakry, owned by Indian honary consul, Shri Ashok Viswani, as "fill[ing] a hospitality market gap" because the city has no five-star hotels. The IFC said that the $61 million project aims to "become an important part of Conakry's business infrastructure", and is likely to host business people involved in the controversial IFC-funded Simandou mine (see Update 82).

In oil-rich Iraqi Kurdistan, the IFC is investing $14 million in a $43 million project of Lebanese company Malia Group, which generated $73 million revenue in 2008 and whose motto is "high-risk, high profit". The project will build 150 serviced apartments in Ebril. The IFC's $13.5 million backing of a luxury Marriott hotel in Port-au-Prince, Haiti, which includes a ballroom, was also approved by the board in mid June.

Seeking to meet a range of multinational companies' needs, the IFC was also given the green light in early June to invest in a vehicle credit scheme in Latin America. The $50 million project, in a five-year partnership with French bank BNP Paridas and Swedish-owned Volvo da Brasil, will facilitate access to cheap vehicle loans for "companies active in transportation, mining, logistics, tourism construction" to purchase Volvo vehicles.

IFC "shortcomings" on Mozal

The CAO has found "shortcomings" in the IFC's management of a Mozambique aluminium smelter project between November 2010 and April 2011 (see Update 79). In an April audit report, it criticised the IFC's failure to ensure adequate monitoring by its partner, Mozal, which would have enabled "appropriate advance consultation with affected communities". The IFC acknowledged the importance of the issues raised by the audit but asserted in the report that "staff took reasonable timely action consistent with its policies and procedures".

The CAO has also been drawn further into the controversial IFC-backed Vizhinjam port extension (see Update 84), with a third case logged against the port in April, by residents of a local village claiming that the project will damage their water source and farm land. In comments reported in the Week magazine, Port authorities denied any potential damage as they unveiled a 14 billion rupee ($24 million) corporate social responsibility package as part of the late May environmental impact assessment publication. The authorities plan to start work on the severely delayed port extension by the end of 2013 after a four-month period of public hearings. Local fisher people's group Kerala Swathanthra Malsya Thozhilali Federation, who filed the second CAO case in September 2012, said they would continue their opposition with a series of "state-wide protest marches" this summer.

Published: 26 June 2013 , last edited: 16 September 2013

Viewings since posted: 3594

Articles: 3465

Advanced article search
Search newswire and resources

New website launched

You are now browsing an archive version of the Bretton Woods Project's website. This site has not been updated since September 2013, but may be used for reference material as the nbew site is being developed. However we suggest you look at the new website:

Recent briefings & reports

Memorandum to the International Development Committee: Inquiry on the Future of UK Development Cooperation  26 June 2013

The Doing Business review: a test of World Bank leadership 24 June 2013

Climate Investment Funds Monitor 7: April 2013  25 April 2013

Working paper: The private sector and climate change adaptation: International Finance Corporation investments under the Pilot Program for Climate Resilience  24 April 2013

The UK's role in the World Bank and IMF: Department for International Development and HM Treasury  13 March 2013

World Bank on jobs: a "significant departure" or "business as usual"? 13 February 2013

No item found


Bretton Woods Update, 6 emails/year:
highlights fulltext pdf
Alerts of new web content
Weekly newswire email


Bretton Woods Project on Facebook

home | subscribe | donate | search | help | contact

validate: | XHTML | CSS | RSS

powered by Action Apps | hosted by GreenNet | Credits