LONDON — Ivanka Trump, senior adviser and daughter of the United States president, will have no official role in the so-called “Ivanka Fund” for women entrepreneurs, World Bank officials told Devex, despite earlier suggestions that she could.
Ms. Trump’s role in the creation of the World Bank-administered facility — officially known as the Women Entrepreneurs Finance Initiative, or We-Fi — has been controversial. The bank has previously suggested she would be a figurehead for the fund, and delegates at the recent Chatham House 2017 International Policy Forum, which was attended by World Bank officials, told Devex there had been talk of a possible board position for Ms. Trump. However, it would be unprecedented for a World Bank financial intermediary fund such as We-Fi — which has so far raised $325 million from 13 government donors — to include a White House official in a governance or fundraising role.
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Ms. Trump currently works in the White House as adviser to the U.S. president in an unpaid federal capacity. She developed the idea for the fund alongside the World Bank, and is reported to have been instrumental in securing commitments to it from Saudi Arabia and the United Arab Emirates — both controversial for their track record on women’s rights — during an official trip to the Gulf in May. She also recently posted on her Facebook page about high-level talks on the fund. But officials now say she will play no formal role.
The fund aims to leverage $325 million raised from donors into more than $1 billion in financing to improve women entrepreneurs’ access to capital, provide them with technical assistance, and invest in projects and programs that support women and women-led small to medium sized enterprises in World Bank Group recipient countries.
Officials told Devex that the fund will launch at the World Bank annual meetings in October, with the first awards to be released in early 2018.
How will the fund work?
The new facility, which was announced last month, welcomed first-time women entrepreneur empowerment donors Saudi Arabia and China to the fund, alongside the governments of the U.S., Germany, Australia, Canada, China, Denmark, Japan, Netherlands, Norway, South Korea, the United Arab Emirates and the United Kingdom — whose contribution to the fund was confirmed to Devex, although the amount has not been announced.
But critics said that the fund’s “diluted” structure will likely mean controversial newcomers to the space won’t see their in-country status quo on women’s rights challenged. The facility will only award funding to accredited multilateral development banks, who will interpret the definition of “women-owned” businesses in-house and then pass along the funds to other institutions — such as commercial banks, and venture and equity funds — who will deliver the support to entrepreneurs.
“It already seems like quite a heavily diluted process, and that raises the usual questions about transparency and accountability and how much we’ll be able to track where this money is going,” Emma Burgisser, gender research and project officer at the Bretton Woods Project, told Devex.
In addition, only donor countries will be represented on the facility's board to make governing decisions.
“The way this is set up, we probably won’t have the full picture from the World Bank side where the money actually ends up. Also there’s quite a few definitions going around for ‘women-owned’ businesses: In some countries and places it means businesses solely owned by women, whereas in the U.S. for example, it tends to mean more than 51 percent of ownership is in women’s hands, so how it’s defined will be up to each individual multilateral development bank — it won’t be that the [World] Bank sets out a standard for that,” Burgisser said.
As a result, the strategy could leave taxpayer funds open to exploitation along the value chain. Critics also raised concerns about the hastiness of the fund’s creation. Speaking at the Chatham House International Policy Forum on July 11, Karen Mathiasen — acting executive director of the World Bank in the U.S. — acknowledged that: “We don’t know how much we can leverage. Right now we have commitments of $300 [million] and we were aiming for $200 [million] and the idea was that that would leverage $1 billion. [But] I can tell you there was no scientific method that went into that leverage target — it was pretty off-the-cuff — so it’s my hope we’ll be able to leverage more.”
Burgisser added that the fund will pass over the majority of women in developing countries who work in the informal sector.
“When you focus on women entrepreneurs in the developing world, you’re talking about such an incredibly small percentage of women, because overwhelmingly women are in the informal sector, which this fund does not address at all, and if they are in the formal economy, they’re in wage labor absolutely overwhelmingly,” she said.
The U.K.’s quiet stake
There is also uncertainty around the role of the U.K. government in the fund. A Downing Street spokesperson confirmed to Devex that U.K. Prime Minister Theresa May committed to contributing to We-Fi at a private launch event at the G-20 meetings in Hamburg, Germany last month. The World Bank also confirmed that the U.K. will take part. But the amount it will contribute remains unknown — the Department for International Development said that the government is finalizing the size of its commitment and working with the World Bank on program design, while the World Bank claims the U.K.’s contribution amount is “off the record.”
That is despite recent criticisms from Secretary of State for International Development Priti Patel, who said at last year’s World Bank Spring Meetings that the U.K. will push for "radical reforms" at the bank to ensure that its support is reaching “those who need it most.”
“As a globally engaged, outward-looking nation, Britain is challenging the bank to focus its support on those who need it most, ensuring the world’s poorest are not blocked from the opportunities they need to stand on their own two feet,” she said in a speech.
Patel also launched a performance agreement to accompany its financial contributions to the bank, which makes a portion of funding contingent on the improved performance of its projects.
Updates, Aug. 3 and 7: This story was updated to include additional comments and to clarify the World Bank’s position
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