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The Democratic Republic of the Congo and the World Bank

January 01, 1970

The World Bank Group is a family of five international organizations, which has continuously given leverage loans and financial assistance to developing nations like the Democratic Republic of the Congo, commonly known as the DRC. The country has received assistance from the World Bank in the form of social programs in order to induce and sustain economic development. This assistance has been directed toward conflict prevention, investments in education, and addressing environmental degradation.[1]

Location of the Democratic Republic of the Congo

The DRC has an abundance of natural resources, such as minerals, human capital, water and livestock.[2] Primarily due to this abundance, the World Bank sees the DRC as a developing nation with high possibility for economic growth, to the benefit of not only the country, but potentially to the entirety of the African continent.[3] Over the years, the DRC has made substantial economic progress as demonstrated by their increased security, advancing economy, and introduction to democratic governance. While the country suffers from an ongoing conflict, the DRC has made considerable efforts to unify their army.[2]

However, despite its advancing economy, the DRC consistently shows a low Gross National Income (GNI) per capita and Economic Vulnerability Index (EVI) due to internal conflicts that began in the 1990s.[4] These conflicts have created many obstacles to economic development, including internal protests, violence stemming from rebel groups, inability to sustain economic growth, political instability, weak governance, and deforestation.[5]

Projects and Alliances edit

The World Bank has an investment portfolio for the Democratic Republic of the Congo that includes 29 active projects totaling US$3.8 billion in association with the International Development Association (IDA), the International Finance Corporation (IFC), and Multilateral Investment Guarantee Agency (MIGA). The portfolio is divided among various sectors, with 63% allocated for infrastructure, 16% for human development, 15% for development of the private sector and agriculture, and 6% for governance and mining projects.[6]

The DRC's Country Assistance Strategy (CAS),[3] implemented by the World Bank, aimed to help the country reach Millennium Development Goals (MDGs) and increase growth rates. This program came to a halt in 2017 and has been subjected to further review for noncompliance.[7] As of 2018, the World Bank is developing a new country partnership framework, where implementation is expected between the years of 2019 and 2021.

A similar turn of events also occurred between 1992 and 1994 when the World Bank withdrew all aid to the DRC due to corruption. It did not resume providing aid until late 2001, almost a decade later.[8] In collaboration with the UN, there has been significant progress in demobilizing combatants, raising education, and increasing health. Other alliances with UNICEF and USAID have helped in the protection of children's human rights.[9] Unfortunately, the DRC still has a score of just 0.37 out of 1 on the World Bank's human capital index scale, which uses key determinants to calculate a child's chance of survival and overall success.[10]

IDA edit

The International Development Association (IDA) has awarded over US$3.7 million in credits and approximately US$5.5 million in grants to the DRC over the course of their relationship.[11] As of 2018, a little over US$1 million of credit and US$2.7 million in grants is currently being disbursed. The current credits (loans) and grants are financing projects that help with development, infrastructure, environmental rehabilitation, raising education levels, and increasing women's rights, among other areas.[11]

IFC edit

The International Finance Corporation's (IFC) investments amounts to over US$429 million, which funds projects committed to the development of the DRC. The IFC has eight active projects that primarily focus on the manufacturing sector by expanding access to financing.[12] The IFC is assisting the DRC to improve the business environment, including easing the process of obtaining permits, starting businesses, and paying taxes. Additionally, the IFC created the Conflict-Affected States in Africa (CASA) initiative to suggest methods of improving the DRC's overall investments and increasing support for small businesses. The IFC has primarily partnered with the World Bank in order to encourage further investments in the DRC. The IFC also works with the Organization for the harmonization in Africa of Business Law (OHADA) in order to induce further economic growth. Management training programs have been offered by the IFC, which have helped in the growth of local, small businesses.[13]

MIGA edit

As of late 2018, the Multilateral Investment Guarantee Agency (MIGA) has not made any guarantees to the DRC. Prior contributions have helped the DRC to build its infrastructure and rehabilitate its private sector. Between 2009 and 2016, MIGA contributed more than US$187 million worth of guarantees to the country. Most projects pertain to securing shareholder loans and building infrastructure to obtain more foreign investment.[14] This has the potential to help in addressing the degradation of roads and infrastructure in the country caused by past and current conflict.[15]

Reception edit

The World Bank's involvement in the DRC has been highly controversial. This controversy is due in part to the problems that remain despite the DRC receiving loans for development since the 1960s, with brief periods during which the World Bank suspended relations.[16]

Successful projects edit

The World Bank has helped to promote foreign investment in the DRC. It created the National Investment Promotion Agency (ANAPI), which provided investors with information, advisory services, and potential tax benefits.[17] The increase in foreign direct investment in the DRC rose from US$72 million in 2000, to US$1.3 billion in 2017, with the highest amount recorded at US$3.3 billion in 2013.[18]

With the help of the World Bank, the DRC has seen an improvement in access to healthcare. The DRC is highly dependent on aid to fund its health services, of which the World Bank contributes 25%. It has been argued[by whom?] that since the World Bank is the second-largest contributor to funding of health services, which have allowed a large portion of the population access to life-saving immunizations, it has played a significant role in raising the immunization rate among children from 5% to 81%.[19]

Criticism edit

Despite the World Bank's funding of its health system, the DRC has been affected by the ongoing Ebola outbreak which began in 2018, which has been difficult to contain.[20] Additionally, 64% of the DRC's population still lives below the poverty line.[21] Even with continuous and lasting interventions by the World Bank, the DRC remains impoverished, manifested with corruption, plagued with gender violence, unemployment, low GDP and economic stagnation.[22]

Critics have questioned the true intentions of the World Bank projects. For example, an article by The Guardian states that the projects implemented by the World Bank, such as construction of dams, may be intended to benefit the rich. However, this is primarily because a large percentage of the population still does not have access to electricity. The article claims to have found a leaked strategic plan that states that it is in the World Bank's interest to pursue large plans as opposed to small plans, such as those that may help deliver electricity to the rural areas of the country where a majority of the population lives.[23][neutrality is disputed]

Other critics have commented that the World Bank fails to account for historical precedence when attempting to influence government.[24] An example of this issue occurred in 2001, when the World Bank attempted to attract FDI by restructuring one of the largest mining companies that was located in the Katanga province, known as the Gécamines. This action led to the laying off of 10,000 workers, and has been claimed[by whom?] to have caused regional and ethnic conflicts.[25]

References edit

  1. ^ "Projects & Operations - All Projects | The World Bank". projects.worldbank.org. Retrieved 2018-11-07.
  2. ^ a b . ambardcusa.org. Archived from the original on 2018-12-03. Retrieved 2018-12-03.
  3. ^ a b Bank, The World (2013-04-12). "Congo, Democratic Republic of - Country Assistance Strategy for the period FY13 - FY16". {{cite journal}}: Cite journal requires |journal= (help)
  4. ^ "Least Developed Country Category: Democratic Republic of the Congo Profile | Economic Analysis & Policy Division". Development Policy & Analysis Division | Dept of Economic & Social Affairs | United Nations. 2015-12-25. Retrieved 2018-12-03.
  5. ^ "Overview". World Bank. Retrieved 2018-11-07.
  6. ^ "Projects & Programs". World Bank. Retrieved 2018-11-11.
  7. ^ "DRC: World Bank Suspends Disbursements for Civil Works for the High-Priority Roads Reopening and Maintenance (ProRoutes) Project". World Bank. Retrieved 2018-12-03.
  8. ^ Ndikumana, Léonce; Boyce, James K. (1998). "Congo's Odious Debt: External Borrowing and Capital Flight in Zaire". Development and Change. 29 (2): 195–217. doi:10.1111/1467-7660.00076.
  9. ^ "Overview". World Bank. Retrieved 2018-11-09.
  10. ^ "Human Capital". World Bank. Retrieved 2018-11-11.
  11. ^ a b . financesapp.worldbank.org. Archived from the original on 2018-10-24. Retrieved 2018-11-11.
  12. ^ . financesapp.worldbank.org. Archived from the original on 2018-10-24. Retrieved 2018-11-10.
  13. ^ "DRC: the Resilience of an African Giant". www.ifc.org. Retrieved 2018-11-11.
  14. ^ "Projects | Multilateral Investment Guarantee Agency | World Bank Group". www.miga.org. Retrieved 2018-11-11.
  15. ^ "Congo Equipment SPRL | Multilateral Investment Guarantee Agency | World Bank Group". www.miga.org. Retrieved 2018-11-10.
  16. ^ "Opinion | The World Bank's Diminishing Role in Africa". Retrieved 2018-12-03.
  17. ^ "The World Bank's Bad Business in the Democratic Republic of the Congo (DRC)". oaklandinstitute.org. Retrieved 2018-12-03.
  18. ^ UNCTAD. "UNCTADstat - General Profile: Dem. Rep. of the Congo". UNCTADstat. Retrieved 2018-12-03.
  19. ^ Olk, Sara (2018-11-18). "Immunization in the Democratic Republic of the Congo". Borgen Magazine. Retrieved 2018-12-02.
  20. ^ Scutti, Susan. "Congo Ebola outbreak is 2nd largest, 2nd deadliest". CNN. Retrieved 2018-12-03.
  21. ^ . UNICEF. Archived from the original on 2018-12-03. Retrieved 2018-12-03.
  22. ^ "How to Reform the Democratic Republic of Congo". Time. Retrieved 2018-12-03.
  23. ^ Bosshard, Peter (2013-07-16). "The World Bank is bringing back big, bad dams". The Guardian. Retrieved 2018-12-03.
  24. ^ Smith, Anna (2018). "Foreign Aid and Development in the Democratic Republic of the Congo: An Analysis of International Barriers to Development". Tul Journal.
  25. ^ "Research - Corruption Q&As - Overview of corruption and anti-corruption in the Democratic Republic of Congo (DRC)". www.transparency.org. Retrieved 2018-12-09.

See also edit

January 01, 1970
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This article may require cleanup to meet Wikipedia s quality standards The specific problem is The topic should be checked for criticism Please help improve this article if you can January 2019 Learn how and when to remove this message The World Bank Group is a family of five international organizations which has continuously given leverage loans and financial assistance to developing nations like the Democratic Republic of the Congo commonly known as the DRC The country has received assistance from the World Bank in the form of social programs in order to induce and sustain economic development This assistance has been directed toward conflict prevention investments in education and addressing environmental degradation 1 Location of the Democratic Republic of the Congo The DRC has an abundance of natural resources such as minerals human capital water and livestock 2 Primarily due to this abundance the World Bank sees the DRC as a developing nation with high possibility for economic growth to the benefit of not only the country but potentially to the entirety of the African continent 3 Over the years the DRC has made substantial economic progress as demonstrated by their increased security advancing economy and introduction to democratic governance While the country suffers from an ongoing conflict the DRC has made considerable efforts to unify their army 2 However despite its advancing economy the DRC consistently shows a low Gross National Income GNI per capita and Economic Vulnerability Index EVI due to internal conflicts that began in the 1990s 4 These conflicts have created many obstacles to economic development including internal protests violence stemming from rebel groups inability to sustain economic growth political instability weak governance and deforestation 5 Contents 1 Projects and Alliances 1 1 IDA 1 2 IFC 1 3 MIGA 2 Reception 2 1 Successful projects 2 2 Criticism 3 References 4 See alsoProjects and Alliances editThe World Bank has an investment portfolio for the Democratic Republic of the Congo that includes 29 active projects totaling US 3 8 billion in association with the International Development Association IDA the International Finance Corporation IFC and Multilateral Investment Guarantee Agency MIGA The portfolio is divided among various sectors with 63 allocated for infrastructure 16 for human development 15 for development of the private sector and agriculture and 6 for governance and mining projects 6 The DRC s Country Assistance Strategy CAS 3 implemented by the World Bank aimed to help the country reach Millennium Development Goals MDGs and increase growth rates This program came to a halt in 2017 and has been subjected to further review for noncompliance 7 As of 2018 the World Bank is developing a new country partnership framework where implementation is expected between the years of 2019 and 2021 A similar turn of events also occurred between 1992 and 1994 when the World Bank withdrew all aid to the DRC due to corruption It did not resume providing aid until late 2001 almost a decade later 8 In collaboration with the UN there has been significant progress in demobilizing combatants raising education and increasing health Other alliances with UNICEF and USAID have helped in the protection of children s human rights 9 Unfortunately the DRC still has a score of just 0 37 out of 1 on the World Bank s human capital index scale which uses key determinants to calculate a child s chance of survival and overall success 10 IDA edit The International Development Association IDA has awarded over US 3 7 million in credits and approximately US 5 5 million in grants to the DRC over the course of their relationship 11 As of 2018 a little over US 1 million of credit and US 2 7 million in grants is currently being disbursed The current credits loans and grants are financing projects that help with development infrastructure environmental rehabilitation raising education levels and increasing women s rights among other areas 11 IFC edit The International Finance Corporation s IFC investments amounts to over US 429 million which funds projects committed to the development of the DRC The IFC has eight active projects that primarily focus on the manufacturing sector by expanding access to financing 12 The IFC is assisting the DRC to improve the business environment including easing the process of obtaining permits starting businesses and paying taxes Additionally the IFC created the Conflict Affected States in Africa CASA initiative to suggest methods of improving the DRC s overall investments and increasing support for small businesses The IFC has primarily partnered with the World Bank in order to encourage further investments in the DRC The IFC also works with the Organization for the harmonization in Africa of Business Law OHADA in order to induce further economic growth Management training programs have been offered by the IFC which have helped in the growth of local small businesses 13 MIGA edit As of late 2018 the Multilateral Investment Guarantee Agency MIGA has not made any guarantees to the DRC Prior contributions have helped the DRC to build its infrastructure and rehabilitate its private sector Between 2009 and 2016 MIGA contributed more than US 187 million worth of guarantees to the country Most projects pertain to securing shareholder loans and building infrastructure to obtain more foreign investment 14 This has the potential to help in addressing the degradation of roads and infrastructure in the country caused by past and current conflict 15 Reception editThe World Bank s involvement in the DRC has been highly controversial This controversy is due in part to the problems that remain despite the DRC receiving loans for development since the 1960s with brief periods during which the World Bank suspended relations 16 Successful projects edit The World Bank has helped to promote foreign investment in the DRC It created the National Investment Promotion Agency ANAPI which provided investors with information advisory services and potential tax benefits 17 The increase in foreign direct investment in the DRC rose from US 72 million in 2000 to US 1 3 billion in 2017 with the highest amount recorded at US 3 3 billion in 2013 18 With the help of the World Bank the DRC has seen an improvement in access to healthcare The DRC is highly dependent on aid to fund its health services of which the World Bank contributes 25 It has been argued by whom that since the World Bank is the second largest contributor to funding of health services which have allowed a large portion of the population access to life saving immunizations it has played a significant role in raising the immunization rate among children from 5 to 81 19 Criticism edit Despite the World Bank s funding of its health system the DRC has been affected by the ongoing Ebola outbreak which began in 2018 which has been difficult to contain 20 Additionally 64 of the DRC s population still lives below the poverty line 21 Even with continuous and lasting interventions by the World Bank the DRC remains impoverished manifested with corruption plagued with gender violence unemployment low GDP and economic stagnation 22 Critics have questioned the true intentions of the World Bank projects For example an article by The Guardian states that the projects implemented by the World Bank such as construction of dams may be intended to benefit the rich However this is primarily because a large percentage of the population still does not have access to electricity The article claims to have found a leaked strategic plan that states that it is in the World Bank s interest to pursue large plans as opposed to small plans such as those that may help deliver electricity to the rural areas of the country where a majority of the population lives 23 neutrality is disputed Other critics have commented that the World Bank fails to account for historical precedence when attempting to influence government 24 An example of this issue occurred in 2001 when the World Bank attempted to attract FDI by restructuring one of the largest mining companies that was located in the Katanga province known as the Gecamines This action led to the laying off of 10 000 workers and has been claimed by whom to have caused regional and ethnic conflicts 25 References edit Projects amp Operations All Projects The World Bank projects worldbank org Retrieved 2018 11 07 a b ABOUT CONGO Republique Democratique du Congo ambardcusa org Archived from the original on 2018 12 03 Retrieved 2018 12 03 a b Bank The World 2013 04 12 Congo Democratic Republic of Country Assistance Strategy for the period FY13 FY16 a href Template Cite journal html title Template Cite journal cite journal a Cite journal requires journal help Least Developed Country Category Democratic Republic of the Congo Profile Economic Analysis amp Policy Division Development Policy amp Analysis Division Dept of Economic amp Social Affairs United Nations 2015 12 25 Retrieved 2018 12 03 Overview World Bank Retrieved 2018 11 07 Projects amp Programs World Bank Retrieved 2018 11 11 DRC World Bank Suspends Disbursements for Civil Works for the High Priority Roads Reopening and Maintenance ProRoutes Project World Bank Retrieved 2018 12 03 Ndikumana Leonce Boyce James K 1998 Congo s Odious Debt External Borrowing and Capital Flight in Zaire Development and Change 29 2 195 217 doi 10 1111 1467 7660 00076 Overview World Bank Retrieved 2018 11 09 Human Capital World Bank Retrieved 2018 11 11 a b WBG Finances IBRD IDA Lending Summary financesapp worldbank org Archived from the original on 2018 10 24 Retrieved 2018 11 11 WBG Finances IFC Summary financesapp worldbank org Archived from the original on 2018 10 24 Retrieved 2018 11 10 DRC the Resilience of an African Giant www ifc org Retrieved 2018 11 11 Projects Multilateral Investment Guarantee Agency World Bank Group www miga org Retrieved 2018 11 11 Congo Equipment SPRL Multilateral Investment Guarantee Agency World Bank Group www miga org Retrieved 2018 11 10 Opinion The World Bank s Diminishing Role in Africa Retrieved 2018 12 03 The World Bank s Bad Business in the Democratic Republic of the Congo DRC oaklandinstitute org Retrieved 2018 12 03 UNCTAD UNCTADstat General Profile Dem Rep of the Congo UNCTADstat Retrieved 2018 12 03 Olk Sara 2018 11 18 Immunization in the Democratic Republic of the Congo Borgen Magazine Retrieved 2018 12 02 Scutti Susan Congo Ebola outbreak is 2nd largest 2nd deadliest CNN Retrieved 2018 12 03 Statistics UNICEF Archived from the original on 2018 12 03 Retrieved 2018 12 03 How to Reform the Democratic Republic of Congo Time Retrieved 2018 12 03 Bosshard Peter 2013 07 16 The World Bank is bringing back big bad dams The Guardian Retrieved 2018 12 03 Smith Anna 2018 Foreign Aid and Development in the Democratic Republic of the Congo An Analysis of International Barriers to Development Tul Journal Research Corruption Q amp As Overview of corruption and anti corruption in the Democratic Republic of Congo DRC www transparency org Retrieved 2018 12 09 See also editSocial issues in the Democratic Republic of Congo Foreign relations of the Democratic Republic of the Congo Retrieved from https en wikipedia org w index php title The Democratic Republic of the Congo and the World Bank amp oldid 1169114517, wikipedia, wiki, book, books, library,

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