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Features

Unmasking racist World Bank

Phyllis Muhammad

2012-11-28, Issue 608

http://pambazuka.org/en/category/features/85601

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The bank’s governance structure has denied Africa a voice for many decades, but utterly appalling is the deeply entrenched bias against black people in the World Bank’s human resources practices.

This article is about the twin evils that have bedeviled the World Bank’s relationship with Africa as a continent and Africans as human beings. The first is structural: it concerns a ‘democracy deficit’ in the bank’s governance architecture that has denied Africa a voice in the institution’s boardroom. The second is cultural: it involves institutional discrimination in the day-to-day management of the bank that has demeaned and dehumanised people of African origin for decades. Dealing with the cultural malice requires first addressing the structural ills.

Since its establishment in 1946, the bank has gone through various stages of transformation. The early years of heavy infrastructure investment financing gave way to macroeconomic and debt management in the 1970s and 1980s, under the now defunct rubric of structural adjustment. Social issues claimed the later end of the 1980s. In May 1992, then President Lewis Preston declared ‘sustainable poverty reduction is the overarching objective of the Bank. It is the benchmark by which the Bank’s performance as a development institution will be measured.’ In consequence, the bank’s operations shifted to Asia and Africa, home of 80 percent of the world’s poor.

In 1999, the bank adopted a Comprehensive Development Framework (CDF). The framework placed strong emphasis on ‘ownership’ of poverty reduction strategies and programs by national stakeholders. It also advocated tearing down the ‘patron-client’ mindset and replacing it with international partnerships where the partners have equal standing. As a result, ‘empowerment’ for developing countries became the buzzword and the sine qua non of the bank’s crusade against global poverty. The change in development philosophy generated new terminologies. Distinctions between ‘donors’ and ‘aid recipients’ were consigned to history. The term ‘development partners’ was adopted as more fitting in the new lexicon.

… BUT SHARING POWER IS OFF LIMITS

One area that has resisted change is the bank’s governance framework, which to a large extent still reflects the world of nearly seven decades ago when Sub Saharan African nations, bar one, were under the yoke of colonialism. Despite repeated calls by developing countries and civil society, the bank has refused to establish a robust international governance architecture that is in keeping with current realities and standards anchored in democratic principles. Over the years, Africa has moved to the centre of the bank’s business, but yet remains at the periphery of its governance calculus.

A cursory look at the voting rights of three of the founding members of the bank -- the US, China, and Ethiopia – tells the story. In 2007, the US wielded over 16 percent of the voting rights, China controlled 2.77 percent and Ethiopia accounted for a miniscule 0.08 percent. Ethiopia, with a population of 77 million, carried less voting power than the Bahamas Islands, with a population 330,000. Nigeria’s voting right (population 150 million) was less than that of Kuwait (population 2.5 million). Sub Saharan Africa (SSA), home for 30 percent of the world’s poor, was allotted 5.55 percent voting rights.

MARGINAL REFORMS IN VOTING RIGHTS, BUT AFRICA NEED NOT APPLY

Responding to pressure exerted by emerging economies and civil society, the bank approved a modest shift in its voting rights in favour of developing countries. The stated objective was increasing the bank’s legitimacy through ‘voice reforms.’ In April 2010, the bank announced that ‘Latin America Gets Greater Voice at World Bank after Voting Rights Increase.’ On the same day, the Financial Advisory heralded ‘China and India Increase Voting Rights in World Bank.’ China’s voting rights jumped from 2.77 to 4.42 percent. Like Latin America, Asia was a net gainer.

‘Africa Has Less Say After Changes in World Bank Voting’ flagged Hilaire Avril in an article that appeared in Inter Press Services on 17 May 2010. ‘The World Bank breaks its promises on Africa’s voting power,’ blogged Duncan Green of Oxfam. He highlighted that ‘of the 47 countries in SSA only one (Sudan) gained.’ He went on to say that ‘the biggest losers were Nigeria and South Africa.’ Does the World Bank see Africa as a true development partner, or just as an aid recipient: ‘A White Man’s Burden?’

INEQUALITY AND INJUSTICE: A WORLD BANK CULTURE

At the recent IMF/World Bank Annual Meetings in Tokyo, the new World Bank President, Jim Yong Lee, highlighted that ‘wherever there is inequality, there is too often injustice.’ His remark applies to the World Bank just as much as it does to its client countries. According to a 1998 report prepared by the World Bank’s Team for Racial Equality, ‘Interviews with managers for African Issues Working Paper in 1992 revealed cultural prejudices among some managers, who rated Africans as ‘unsophisticated and inferior.’’

It is because of such manifested culture of bigotry that a street adjacent to the World Bank’s HQs is nicknamed ‘Apartheid Avenue.’ Some 18 articles have been written about the Bank’s systemic discrimination in the last four years alone with such titles as: ‘Investigate ‘Ghettoization’ of Blacks at the World Bank - A petition to the Human Rights Watch; Apartheid a la Banque Mondiale; Walking Apartheid Avenue; and World Bank Puts Black Employees At Back Of Bus.’

DISCRIMINATION IS A HUMAN RIGHTS VIOLATION

Over the years, a dozen comprehensive studies have documented that racial discrimination against black employees is systemic and victims of discrimination are denied due process by the bank’s Administrative Tribunal. A number of reports have established that the Tribunal lacks independence from management influence, including one by the US Government Accountability Office (GAO). Tribunal judges have a conflict of interest. They are not only employed by the bank to serve as part time judges, but several of them (including its immediate past and current presidents) are also appointed by the president of the bank to serve as reviewers of the bank’s International Centre for the Settlement of Investment Disputes arbitral awards.

In November 1978, William Raspberry, Pulitzer Prize-winning columnist, exposed the depth of the problem in an op-ed article in the Washington Post documenting hard evidence including: ‘there are zero black division chiefs out of 160. Division chiefs represent the lowest managerial rank.’ The consequence of this was that people of African origin had little if any say in the World Bank’s development and poverty alleviation policies. However, President McNamara’s reaction, according to the above-quoted article was: ‘There is no problem with discrimination against blacks. The place where we are ghastly is on woman….Besides I cannot really say it is in Africa’s interest to have more of their professionals here.’

In 1996, a director of the bank’s Loan Department explained why he was not hiring black professionals as follows: ‘Blacks make poor accountants and the department could not hire too many blacks as the department would look like a ghetto.’ He suggested in a public meeting that blacks should be kept in the ‘Africa ghetto,’ in reference to the bank’s Africa regional vice presidency unit. The Africa region is where blacks are segregated. The term ‘ghettoization’ of blacks was coined by the staff sssociation.

In 1997, the Bank commissioned an independent study, the third in seven years. The Dewey Ballantine law firm undertook the study and confirmed that: (i) there is systemic discrimination, (ii) the bank has not acted adequately on previous discrimination studies and (iii) staff does not consider the bank’s internal justice system to be credible.

In 1998, President Wolfensohn declared ‘zero tolerance for discrimination’ and appointed a Senior Advisor for Racial Equality for five years, who reported directly to the president. According to a 2005 Staff Association report, after the declaration of ‘zero tolerance,’ the Senior Advisor ‘examined more than 450 racial discrimination claims during his [five-year] tenure.’ This amounts to over 60 percent of blacks at the time. After the Senior Adviser’s five-year tenure expired, the bank downgraded his office and put his successor directly under the human resources vice president. Since 2002, the Diversity Office has kept the number of complaints confidential.

In 1999, a study commissioned by the US Congress confirmed what was established in 1998 by the bank’s internal Grievance Process Review Committee: the bank’s internal justice system had ‘a number of serious shortcomings,’ including (i) ‘it lacked sufficient independence from management’; (ii) ‘it did not adequately protect grievants’ rights or hold managers accountable’; and (iii) ‘employees often saw it as neither fair nor credible and this deterred them from using it.’ The US Treasury Department, the bank’s host institution, agreed, noting that, ‘We believe that the report presents a fair and accurate statement.’

In 2003, the Bank commissioned yet again another independent study. External experts, who undertook the investigation, found: (i) ‘the bank group has systemic barriers to racial diversity’; (ii) ‘compared to equally qualified persons of any other race, being black is associated with a 36.3 percent reduction in the odds of being manager’; and (iii) ‘the organization was not doing enough to repair policies, procedures and systems that have failed to constrain racial bias.’

In 2005, a study by the Staff Association found that ‘The status of racial discrimination in the Bank is very bad,’ and there is no reliable mechanism to hold perpetrators of racism accountable. In the same year, the Staff Association urged the bank to stop the segregation of blacks in the Africa region. On 25 May 2005 the Staff Association sent a Memo to the Personnel Committee of the World Bank Board of Directors noting: ‘We urge HR to address seriously the issue of ‘ghettoization,’ to ensure that diversity cuts across the institution as a whole’.

In a 2009 video message, a former senior vice president shed light on the Bank’s ‘ghettoization’ policy: ‘The first thing was to promote them [blacks] in the Africa region. The second hurdle is that having seen them do well in Africa to convince other regions to accept them and to stop putting the screens…’ In the same year, the Government Accountability Project (GAP), a leading American civil liberty organization, published a 52-page report entitled ‘Racial discrimination at the World Bank.’ The report established the bank’s systemic discrimination remains unabated and that the Bank’s Administrative Tribunal’s ‘disturbing’ record shows blacks are denied the security of justice.

SITUATION WORSENED DURING ZOELLICK PRESIDENCY

In 2009, an op-ed in Foreign Policy in Focus by Bea Edwards, Executive Director of GAP, noted ‘nothing has changed for the better. If anything, the situation has worsened.’ Like McNamara of 1978, World Bank President Zoellick believed gender discrimination was the bank’s priority, despite the fact that the bank’s own diversity scorecards and reports showed racial discrimination was by far worse. Two years before Zoellick took the helm of the bank, the Staff Association’s newspaper flagged on its front page, ‘It’s Official: Bank Misses Its Long-Term Target for Black Staff.’ It went on to say, ‘It is a shame, because the target was not that high to begin with.’ The racial diversity target aimed for 10 percent of blacks at the GF pay scale – an entry level professional position. In contrast, the gender diversity goal aimed to have 50 percent woman managers.

Not only did Zoellick neglect blacks, but as the cases below illustrate, his gender equality agenda was pushed at the expense of blacks. An African staff was rejected by Zoellick after he was cleared for a senior technical management position by two high-level committees independently. Zoellick rejected the nomination saying the bank ‘can do even better’ and instructed his management team to re-launch the selection process with particular emphasis on women candidates. The bank hired professional headhunters to identify qualified women candidates. When that failed, the President instructed HR to change the selection criteria and re-launch the process again. Eventually, the bank appointed a woman based on the revised job description.

In another case a highly qualified African was sidelined for a mid-level management job and the position given to a woman candidate who was rejected at the short-listing level as she did not meet the advertised selection criteria. The case reached the bank’s Tribunal, but the Tribunal ruled the bank does not need to follow its own advertized selection criteria when selecting a candidate. The African staff had seven different racial discrimination cases. In the first two cases the bank mediated and compensated him financially. In the next three cases the bank’s Tribunal reviewed his charges of discrimination and summarily dismissed them, but found that in each case the bank violated its own HR procedures in the recruitment process in which he was denied higher level positions and awarded him financial compensation. In the last two cases the Tribunal ruled he could not be compensated because he had been compensated in previous similar cases, even though cases six and seven involved separate matters that were presented on their own merits without relying on any of his previous cases.

Another African was disqualified from competing for a high profile manager position after the bank falsified his HR record and then claimed that he had no management experience to be appointed to the position he had applied for. In a brazen move that illustrates a breathtakingly lawless environment of impunity, the bank deleted the years of his management track record, removed his managerial title from bank publications and declared that his six years of stellar official performance evaluation ratings as manager were ‘overinflated’ and therefore effectively null and void. The Tribunal did not acknowledge the Bank’s falsification, nor did it see fit to rectify his record.

An independent review by GAP concluded that ‘Material statements that were shown to be false became part of the record and the basis of the logic underlying the Tribunal’s judgment.’ GAP’s report presented several materially false, sworn testimonies including misrepresentation of the aggrieved staff’s HR record that should have been offset with irrefutable evidence submitted by the complainant. The Tribunal’s summary dismissal of the case triggered an uproar leading to an unprecedented intervention by the Staff Association, the US Treasury and the US Executive Director. The Staff Association contested saying ‘Several aspects of the bank’s justice system are broken.’ Zoellick’s senior management retreated behind the veil of immunity to avoid accountability. The staff member is still fighting to have his official employment record restored.

DEMAND FOR JUSTICE

In 2012, current and former World Bank staff members established Justice for Blacks with a mission to restore the human dignity and rights of black staff and consultants. The group approached the bank’s Board of Directors with two legitimate demands. The Board did not even bother to acknowledge the group, much less to respond to its demands. An informal reply from an African member of the Board provides a telling example. While acknowledging ‘the very disturbing and saddening matter’ he suggested there was not much he could do. He concluded his message with kind wishes for ‘the Almighty's guidance.’

In the above-noted 1978 article, Mr. Raspberry wrote, ‘for the bank officials, even while accepting the racial diversity numbers, they see [any request for equality] as a pitch for special treatment – for charity based on pigmentation.’ Thirty-four years later, blacks are still complaining of discrimination and they have hard data to back them up. Those who run the institution still confuse legitimate demands for equality with a plea for charity. Unfortunately, the cultural malice cannot be cured without first mending the structural ills. The African director’s apparent call for divine intervention should not be the only option.

The Bank should be held accountable to uphold its own principles of staff employment, as well as universal norms which both militate against racial discrimination. Justice for Blacks has launched a petition drive on www.change.org asking Human Rights Watch to investigate the bank’s human rights violations, citing a breach of Articles 1 and 7 of the Universal Declaration of Human Rights. The petition has been signed by over 1400 people from 98 countries and the number is growing. Allowing systemic injustice to stand without accountability and correction would amount to endorsing human rights violations. The Bank should not be treated as ‘too big to be held accountable’ and blacks should not be treated as ‘too little to count.’

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* Phyllis Muhammad, an African American former World Bank officer, is a member of Justice for Blacks. She holds a JD from Harvard Law School. She can be reached at phyll919@hotmail.com


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