At the World Bank, turning finance ministers into gay rights advocates

The LGBT pride flag. The World Bank will explore a causal connection between discrimination against sexual minorities and constraints to economic growth. Photo by: Guillaume Paumier / CC BY

The World Bank may be prohibited from interfering in countries’ internal politics, but that doesn’t mean it can’t build the economic case for stemming discrimination against sexual minorities.

The research arm of the global financial institution is taking up a new project exploring a causal connection between discrimination of lesbian, gay, bisexual, transgender and intersex individuals, and constraints to economic growth. The evidence for that connection is already building, but it remains to be seen whether more economic research will be enough to influence discrimination policies within client countries and drive change throughout the financial institution’s lending portfolio.

Despite the World Bank’s uneasy relationship with LGBTI rights — and the weight of the institution’s 1944 Articles of Agreement preventing it from meddling in political affairs — the institution is ramping up efforts to gather robust and concrete data to show discriminating against LGBTI individuals exacts an economic toll.

Many bank staffers in Washington, D.C., feel that gathering economic data is one critical way for the global financial institution to promote the rights of sexual minorities around the world while respecting the political autonomy of client governments.

“If we truly want to eliminate extreme poverty and boost shared prosperity, we really need to draw on this comparative advantage of the World Bank as a technical institution that maximizes the development impact based on data driven approaches,” said World Bank consultant Phil Crehan Tuesday during a panel on sexual minorities in development at World Bank headquarters in Washington, D.C.

Early research into the largely unexplored linkages between LGBTI discrimination and poverty began in 2012 when the bank received a grant from the Nordic Trust Fund to survey and gather socio-economic data on sexual minorities in India and develop an economic model measuring the financial cost of stigmatizing and discriminating against the LGBTI community.

Crehan, whose work focuses on sexual minorities and development, was part of a team of consultants and researchers managing the grant. The economic model, published in an October report prepared by economist M.V. Lee Badgett, focused on workplace discrimination as well as health disparities centered on HIV, suicide and depression. The report concluded that “stigma and exclusion of LGBT people are likely to generate economic costs.”

A subsequent report based on a survey disseminated in six Indian states examining the link between discrimination and socio-economic status of sexual minorities has yet to be published, but Crehan said findings suggest that discrimination of sexual minorities creates “a cycle of poverty.”

These early research endeavors provide a basis for future research and a step in the right direction according to LGBTI rights champions within the bank. But so far they fall short of demonstrating a measurable linkage between discriminatory legislation and gross domestic product — data that bank officials could, in theory, use to discourage discriminatory legislation in client countries.

Crehan told Devex that the Development Economics Special Initiatives Unit — the research arm of the bank — is now beginning a new initiative to look at discriminatory laws in numerous developing countries that affect minority groups including LGBTI individuals. The project aims to study linkages among these discriminatory laws, persistent inequalities and the gross domestic product of a country.

Conducting development in the midst of visible discrimination

The bank’s new efforts come at a time when anti-gay legislation around the developing world continues to make headlines — and to attract strong condemnation from civil society and human rights groups.

Human Rights Watch reported this week that two men are serving prison sentences in Morocco on homosexuality charges. This latest conviction — which the advocacy organization said appears to have resulted from an unfair trial — comes after six men were convicted of homosexuality in Morocco in May 2014, and a British man was jailed for homosexual acts in the country in September.

Homosexual acts are punishable by up to three years in prison in the North African country.

Meanwhile, the World Bank is loaning the Moroccan government $519 million to finance the country’s first utility-scale solar energy complex, and $130 million to improve the management of solid waste, among other large scale development projects.

Kyrgyzstan also made headlines this week after Human Rights Watch reported that the government’s parliamentary Committee on Law, Order and Fighting Crime approved a bill last month that would criminalize homosexual “propaganda” — information distributed via Internet, radio, television or in public that promotes homosexuality or “nontraditional sexual relations.” A final vote on the bill in parliament has yet to occur.

The World Bank is a major donor to development projects in Kyrgyzstan, with commitments including $25 million to improve the country’s electricity supply, and $15 million for pasture and livestock management.

But the global financial institution still treads cautiously when it comes to advocating for human rights. As Devex reported last year, World Bank President Jim Yong Kim has taken a selective stance against discrimination in the past, temporarily freezing a $90 million loan to Uganda’s health sector in early 2014 following that country’s adoption of an anti-gay law. He then published an op-ed in the Washington Post in which he promised to have a “full internal discussion” at the bank about discrimination and how it affects the institution’s projects and its staff.

But Kim’s critics, including the U.N. Human Rights Council’s special rapporteur on extreme poverty and human rights Philip Alston, say engaging with human rights has to be more of a strategic, systematic and integrated approach, and one that the World Bank chief should make part of his reforms.

“The solution doesn’t lie in high-profile sanctioning,” Alston said while on a visit to Washington, D.C., on Tuesday, in reference to Kim’s decision to withhold the Uganda loan.

Putting data to use

Even critics of the bank’s human rights stance — or lack thereof — like Alston see value in building the economic case against discriminatory laws and practices. Data and reports that put discrimination in economic terms can heavily influence government officials and other policymakers by making discrimination strictly a money issue, Alston told Devex.

Publishing data through reports “forces government officials to confront it, and persuades a number of people who are otherwise … deeply homophobic to say, ‘Well frankly, I hate gays, but I also hate losing a hundred million [dollars], so let’s just ease off,’” Alston said.

Alston called this strategy the “instrumentalist argument,” but added that there is another more “sophisticated” approach, which moves past cost-based arguments and into arguments about “decency” and “dignity.”

But there again is where it gets tricky for the bank, which is not an advocacy group or human rights organization, but a financial institution that has to work collaboratively with member and client governments operating under varied and conflicting social and political norms.

Still, Alston is adamant that Kim and the bank can — and should — do more.

For now economic models will precede moral appeals at the world’s largest international financial institution, and while the money argument might be less sophisticated, it might also be a good first step towards turning finance ministers into human rights advocates.

What do you think about efforts within the World Bank to gather data demonstrating an economic cost to discrimination? Let us know by leaving a comment below.

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About the author

  • Jeff tyson 400x400  1

    Jeff Tyson

    Jeff is a global development reporter for Devex. Based in Washington, DC, he covers multilateral affairs, U.S. aid and international development trends. He has worked with human rights organizations in both Senegal and the United States, and prior to joining Devex worked as a production assistant at National Public Radio. He holds a master's degree in journalism from Columbia University and a bachelor’s degree in international relations and French from the University of Rochester.