The World Bank breaks its promises on Africa’s voting power

April 27, 2010

     By Duncan Green     

The World Bank went backwards in Washington last week, when it announced a set of reforms on ‘voice’ (the different countries’ share of voting power at the Bank) that reversed many of the gains for African countries from the previous voice reform, at the Bank’s last Annual Meeting in Istanbul in September 2009.

In last week’s rejig, of 47 countries in Sub-Saharan Africa more than a third (18) lost share, 60% stayed the same, and only one (Sudan) gained. The biggest losers were Nigeria (-11.5%) and South Africa (-9.5%). Full country breakdown see Bank voting shares.

This apparently contradicts the Bank’s communique from the meeting – ‘In line with our Istanbul commitments, we endorsed voice reform to increase the voting power of developing and transition countries (DTC) in IBRD by 3.13%, bringing it to 47.19%. This represents a total shift of 4.59 % to DTCs since 2008’ 
The reasons for the difference?

1. The Bank is comparing with the pre-Istanbul voting shares, which were even worse (i.e. voice for Africa went two steps forward in Istanbul, then one step backward last week)
2. The reform reflects the shift in global GDP, and so benefits the big emerging economies like China and India, not the slower growing economies in Africa.

The Istanbul communiqué read ‘it will be important to protect the voting power of the smallest poor countries’, so it’s hard to see what happened last week as anything else but a broken promise. I am not privy to these discussions, but it looks to me like Africa got squeezed between the emerging powers and a Europe reluctant to cede any power in the Bank. Not good.

If anybody from the Bank or elsewhere wants to comment/set the record straight, feel free.

April 27, 2010
Duncan Green