The World Bank's uneasy relationship with LGBTI rights

The U.S. Agency for International Development and other bilateral donors announced last week a new commitment to infuse lesbian, gay, bisexual, transgender and intersex rights into their development agendas.

The move, however, left some activists and civil society leaders to wonder: Where does the world’s largest multilateral donor stand on LGBTI rights?

The World Bank and its president, Jim Yong Kim, have taken a more subtle and less direct approach to LGBTI issues, navigating political pressures and ethical concerns against the backdrop of a mandate which bars the institution from meddling in the political affairs of member countries.

The Washington, D.C.-based institution’s 1944 Articles of Agreement state that the bank “shall make arrangements to ensure that the proceeds of any loan are used only for the purposes for which the loan was granted … without regard to political or other noneconomic influences or considerations.”

Engaging in LGBTI rights — and human rights more generally — is therefore a tricky issue for the World Bank, whose member countries don’t all maintain clean human rights records or even see a connection between advancing human rights and growing an economy.

Bilateral donors such as USAID and the U.K. Department for International Development “have only a domestic authorizing environment to deal with. That is, the British Parliament or the U.S. Congress,” explained Paul Cadario, senior fellow at the University of Toronto's Munk School of Global Affairs and a former senior manager at the bank.

“And from that point of view, it’s a little easier for them to take positions on things,” he told Devex.

In contrast, the World Bank’s LGBTI strategy tends to be more guarded because it could otherwise be seen by some members as interfering in domestic political affairs.

Efforts to mainstream LGBTI rights

Despite the anchor of the 1944 Articles of Agreement, there have been significant efforts from within the bank — particularly in the last two years — to mainstream LGBTI rights into the development agenda by demonstrating that countries pay an economic cost for discriminating against sexual minorities.

In 2012, the World 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 that measures the financial cost of excluding the LGBTI community.

Fabrice Houdart, senior country officer for the Maghreb and president of the bank’s LGBT employee resource group — known as GLOBE — manages the grant, which wraps up at the end of this month. As part of the closeout, the institution plans to release comprehensive research findings. Earlier this year, economist M.V. Lee Badgett already published some of the findings, which showed discrimination of sexual minorities costs India billions of dollars.

If robust economic arguments can be made for the incorporation of LGBTI rights into development policies, proponents of an LGBTI agenda at the World Bank hope it will be mainstreamed the same way anti-corruption policies have — policies which not too long ago were considered meddling in the political affairs of member countries (and surely still are in some quarters).

Kim, too, has recently taken steps to address LGBTI rights. In early 2014, the World Bank chief temporarily froze a $90 million loan to Uganda’s health sector following the country’s adoption of an anti-gay law. Shortly thereafter, he published an op-ed in the Washington Post entitled “The high costs of institutional discrimination.” 

Calling the fight to eliminate “all” institutionalized discrimination an “urgent task,” Kim promised to have a “full internal discussion over the coming months” about discrimination and how it affects the bank’s projects and employees.

Uganda’s Constitutional Court has since declared the law invalid, but the bill’s proponents have vowed to challenge the ruling.

Critics on both sides

Kim was criticized for his decision to withhold Uganda’s loan.

An April 2014 article in The Economist called his sudden focus on gay rights “arbitrary,” and pointed out that Uganda was one of many member countries with anti-gay policies, and argued that adding conditions to World Bank lending undermines the institution’s overarching goal to end extreme poverty by 2030.

Kim’s move, the magazine’s editorial board said, “is having perverse results, where it matters most” and could encourage some member countries to seek funds from other donors such as China, which won’t impose what some see as “Western values.”

Since February, the World Bank president has dialed down the public rhetoric on LGBTI rights and human rights more generally. Last month, Kim spoke at Howard University to emphasize the bank’s mission of ending poverty and spreading justice; he was later called out by Philip Alston, the U.N. Human Rights Council’s special rapporteur on extreme poverty and human rights, for not mentioning human rights at all in his speech.

In a Washington Post op-ed, the U.N. official criticized the bank for not going “near human rights with a 10-foot pole.” The World Bank is a key actor in the human rights and development debate, Alston emphasized; its policies, or lack thereof, carry a great deal of weight.

“Having no human rights policy, or remaining neutral, sends a clear message to the world,” Alston argued.

The World Bank’s culture

Kim and his senior management team may be treading carefully for political reasons. But some within the walls of the institution feel the bank’s reluctance to address LGBTI rights, as well as adopt a policy specifically focused on human rights, stems from its institutional culture.

“We have a huge culture problem,” a World Bank official who wished to remain anonymous in order to discuss internal matters told Devex.

Some employees feel that macroeconomics and sexual orientation or gender identity are separate issues, the source suggested, and that conflating them could “undermine the credibility of the World Bank as a serious institution that is in the business of eliminating poverty.”

But Cadario, one of the founders of GLOBE, disagreed with the contention that macroeconomists can’t champion human rights concerns.

“The World Bank has always been criticized for having too many economists and on certain days I would agree with them,” Cadario said. “But I think that the bank is a pretty liberal place.”

Regardless of bank culture, the conversation around human rights has to change, according to Adebisi Alimi, a prominent gay rights activist who gained notoriety in the late 2000s when he became the first Nigerian to publicly reveal his homosexuality on national television and now works as a consultant for the World Bank.

“Human rights is a development issue,” Alimi told Devex. “It’s unfortunate that when I have my consultation with the World Bank, the World Bank says, we don’t do human rights.”

A step-by-step approach

The coming months may reveal a great deal about the fate of LGBTI rights within the World Bank’s development strategy, as the complete findings from the study commissioned by the Nordic Trust Fund grant are set to be published at the end of November.

The institution has been holding meetings around the world on its draft safeguards policy, which is expected to be finalized next year and — civil society leaders and LGBTI activists hope — could feature human rights issues prominently, providing a framework for future bank involvement in countries with poor human rights records.

“The fact that human rights are mentioned in the draft safeguard policies I think is big step forward,” Cadario said.

Houdart, who claims to be under investigation for allegedly leaking an early draft of the institution’s safeguards in July, will be handing over leadership of GLOBE in January.

Despite the bank’s uneasy relationship with the LGBTI community, some gay rights advocates are confident that the process of mainstreaming them is underway. For Cadario, it’s also in the bank’s best interest.

“If you are a global corporation, you have anti-discrimination provisions because your shareholders and customers demand them. Supply chains are pretty visible in world trade. I imagine this will extend to banks, too. The World Bank would not want to be the odd financing source out, and perhaps scare off potential investors in International Finance Corp. operations or PPPs the bank and a government were organizing,” he said.

The key will be for the bank to seek out those countries and leaders that are not averse to considering sexual orientation, gender identity and economic growth in concert and find support from an institution with the global credibility to provide it.

Mainstreaming LGBTI rights for the World Bank, in any case won’t be easy.

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