BIC’s Elana Berger Testifies Before House Financial Services Subcommittee

On March 22, BIC’s Elana Berger testified before the House Financial Services Committee subcommittee on Monetary Policy and Trade. Berger’s testimony at the hearing entitled “Examining Results and Accountability at the World Bank,” focused on the impacts of the Uganda Transport Sector Development Project (TSDP) and the significant internal reforms at the Bank resulting from it.

As is often the case with large infrastructure projects, TSDP led to a large influx of construction workers to an isolated, rural community in Western Uganda. Teenage girls subsequently experienced sexual harassment, exploitation, and rape. Many became pregnant, contracted HIV/AIDS, and dropped out of school.

Berger’s testimony on the Bank-funded road project and its outcomes engendered both outrage and optimism from Members of Congress. Rep. Maxine Waters, Ranking Member of the House Financial Services Committee, described the impacts as “disturbing.” Rep. Gwen Moore, Ranking Member of the Subcommittee, expressed “disgust” at the situation. However, Rep. Moore also stated that based on follow up meetings with the World Bank, it was her opinion that progress toward genuine, meaningful reform was being made: “lessons learned had been lessons applied.”

Berger credited the U.S. government, and specifically the office of the U.S. Executive Director at the Bank with spurring the reform effort in the aftermath of the case. Bank management had taken the extraordinary step of issuing a “lessons learned” document in addition to the typical action plan that follows an investigation by the Inspection Panel, the Bank’s independent accountability mechanism. In this case, according to Berger, “The U.S. played a really important role in strengthening [the lessons learned document] so that the recommendations for reform really hit at the issues that caused problems in this project.”

The hearing was held against the backdrop of an important debate within the U.S. government about the role of the United States in multilateral institutions like the World Bank. This year, in addition to the larger budget negotiations, the House Financial Services Committee will consider authorizing a U.S. contribution to the International Development Association—the World Bank’s fund for the poorest countries. In years past, the authorization process has been used to effect important reforms at the Bank—including the creation of the Inspection Panel.

Such reforms have, over the years, led to a more accountable, transparent and effective World Bank. Berger indicated in her testimony that the situation could have been worse had the Bank not been involved: “When we talk about Uganda the thing to keep in mind is the ‘but for’. What if the world Bank hadn’t been involved?” She went on to describe how the community had wanted the road all along—and it was only through the Bank’s involvement that the community was able to get redress for the harms they experienced.  Similarly, Rep. Waters stated that, “criticism of the World Bank should be understood within a context that also recognizes the great deal of progress the Bank has made in many areas over the past few decades—in large part due to pressure from civil society, individual governments, parliaments, including the U.S. Congress and in particular this committee itself.”

While significant progress has been made, and optimism about the ongoing reform efforts are warranted, the Uganda case—among others discussed at the hearing—clearly indicate more work remains to be done. Several Members at the hearing also touched on the need to address the incentive structure at the Bank that rewards pushing money out the door over development impact. Alongside the important work to address gender based violence (GBV) to which the Bank has committed after Uganda, the rollout of the new safeguard policies will be an important indicator of its commitment to ensuring such impacts are not repeated. As Rep. Moore stated, “If there is something that comes out of Uganda at this hearing I hope it is that safeguards are not only important, but are meticulously observed even in the difficult position when the pressure to finish the project is on.”

Elana’s full testimony can be read here.

Watch the full hearing here.