Odious laws and the World Bank

       In 2009 Uganda drafted a law criminalizing homosexuality [1](https://en.m.wikipedia.org/wiki/Anti-Homosexuality_Act,_2014). I was then (2007-11) World Bank Country Director for Tanzania, Uganda, and Burundi, based in Dar es Salaam. I discussed how to oppose this law with the head of the WB staff group GLOBE[2] who advised "keep a low profile; it does not help this group of oppressed people to make it into a public standoff with the international organizations". I discussed with the Bank's Director for Diversity [3] who demanded that I do something without suggesting anything specific. I told her that the Bank never makes supports or opposes legislation, of any kind, and that its staff do not testify before national legislatures or make public statements on political issues. She insisted that I take a public stand. I explained that the Bank had made it clear, in a private meeting, with the Uganda Minister of Finance (the Governor for the WBG at the time) that the draft law would damage the country's profile on human rights (which was and remains poor) and would harm relations with external partners.

       The Africa Regional Vice President, Oby Ezekwesili[4], said that she would speak to President Yoweri Museveni. Ezekwesili was an African politician who could say things to, and hear things from, other African politicians that the wazungu can rarely do. I do not know what they said if indeed they ever spoke. In the event, President Museveni signed the law in May 2023, and it is being enforced, despite protests from Uganda civil society and from international partners. The World Bank has since stopped new lending to Uganda pending review of the country’s environmental and social standards with the goal of determining if minorities are protected from discrimination and exclusion in Bank-financed operations (https://www.worldbank.org/en/news/statement/2023/08/08/world-bank-group-statement-on-uganda).

Burundi considered similar discriminatory legislation in 2010. Donors in Bujumbura, especially one from Belgium, a country whose local representative was notorious for acting as if he still ran Burundi, demanded the Bank do something to stop the draft law. Bilateral partners of Burundi did not want to get involved for fear of damaging relations with the government, so they left this delicate job to the internationals.

       It was agreed informally among donors in Bujumbura that representatives of the principal international partners--the Bank, the IMF, and the African Development Bank--would meet President Nkurunziza [5] to discuss the draft law. Among the four representatives— me (USA), Mercy Tembon (Cameroon) of the WB, Diaretou Gaye (Senegal) then Country Director at the AfDB, Yao Koffi (Cote d’Ivoire) Resident Representative of the IMF--it was agreed that I would talk in the meeting while the others would say nothing unless asked directly by Nkurunziza. The reason that I did the talking may not be obvious and should not imply that the others were not committed to the purpose of the meeting or that I was somehow more capable. The others, as Africans, may have feared retaliation from Burundi's President if they said something he happened not to like. I was just another mzungu and the personal risk was much lower.

       The short version of our meeting with President Nkurunziza is: He thanked us for our support to his country and closed the meeting The long version is: Much of the President's family, including his father and several siblings, had been killed in the civil wars, and we, as foreigners, were in no position to lecture him about Burundian politics or society. I do not know if the Burundian law was ever passed or enforced but it was clear that the modest, discreet, intervention of three international organizations had  no effect whatsoever on Burundi’s President at the time.

       We read (FT, 3/5/24) that Ghana's legislature has passed a law criminalizing homosexuality. The President of Ghana, Nana Akufo-Addo has stated that he awaits a court ruling on the law’s constitutionality before deciding to sign. President Akufo-Addo is certainly sensitive to domestic opposition to the law, and it may also be that he fears sanctions from donors[6]. The WB is said to be threatening to suspend new lending, as it did in Uganda. Senior African staff of the Bank are believed to oppose the suspension, while senior European staff of the WB are said to support a suspension[7].

The questions are not if such laws are odious--they are--or if the Bank as an institution should oppose them--it must. The question is: What price should the WBG impose on countries that enact indecent laws ?

The current price in Uganda is suspension of new loans. New lending will, in theory, resume after a review of environmental and social safeguards in ongoing Bank-supported operations. The Bank has recently carried out a “Consultations Plan on Inclusion and non-Discrimination in World Bank-financed Projects in Uganda”, which appears to be part of the standards review. It is certain that the review will allow resumption of lending and will do little or nothing to stop Uganda from discriminating against its own citizens. If Ghana’s President signs the offensive law, it would follow that Ghana would pay the same price as Uganda – suspension of new lending until a safeguards review is completed, followed by a resumption of lending and a façade of respecting safeguards in this area of human rights.

Imposing a suspension of new lending on Uganda and Ghana, and eventually on others, while attempting to verify compliance with international human rights standards, is appealing in that it sets a price on bias and it forces some accountability on the Bank[8]. However:  A country outside Africa would never pay such a price. The US, generally the worst hypocrite among the major Bank Board chairs on just about everything, would not demand such tribute from Pakistan or Indonesia. France does not allow it for its former colonies. Second, the views of those AFR managers who are African nationals, are reportedly being rejected on the Ghana question and this is, again, something that would not happen outside Africa. There is, next, the usual asymmetry of legal treatment between lenders and borrowers; if poor borrowing countries must pay a stiff price for laws distasteful to the shareholding countries, then why don't the shareholders ever pay a price for their own odious politics ? The Bank could say--it will never do this, but bear with me--we do not like your laws so we will return your capital or some fraction thereof. Fourth, if most borrowers pay no price for human rights violations, then why should the Ghana and Uganda ? Burkina Faso and Mali massacre their own citizens and we do not see senior Bank officials demanding that their programs be suspended. The federal government of Ethiopia is destroying the historical culture of its capital city at this very minute and yet we hear no pious lamentations from the Bank, because Ethiopia is a large rapidly disbursing program in a photogenic country which the Bank needs to sell as a success story.

What is to be done ? Discreet political efforts did not block odious laws in Uganda or Burundi and have not yet done so in Ghana. Bribes in the form of assistance with debt repayment--which is what most of the Bank's program in Ghana is today--have failed.

A more durable price is necessary given the likelihood of continued rights violations once the international partners turn their backs. I propose that the price be set as follows. Ghana and Uganda would receive no more untied budget support. The portion of IDA assistance to Ghana and Uganda now allocated as untied budget support would be reallocated to water, public health, renewable energy, and women's education. Of course, money is fungible, but this proposed shift in the form of WBG assistance does allow better traceability and more specific accountability than do the current programs which have large shares of untied budget support. If Ghana or Uganda do not like that price, they can appeal to the AfDB where the majority of shareholders is more likely to hold their reactionary social views or to sovereign wealth funds who will ignore odious laws in return for the privilege of buying, for example, national forests or prime tourism sites.

The Bank can say: "We are not taking this measure for political reasons; we are taking this measure because, based upon a thorough safeguards review, we lack confidence in how you manage your IDA entitlements. We believe that all citizens must be treated equally and must not be subject to laws that might cause public opprobrium and put them at physical risk. If countries pass laws that violate your own signed international commitments, then there are consequences and we have cut those consequences in proportion to what you are doing.

Absolutists won't like this imperfect compromise, but it is wrong to propose selective sanctions on nations that happen to be African, and it is dishonest to pretend that a one-off suspension will improve the lives of the victims of legal, but immoral, discrimination.

[1]In writing this piece, I have not talked to any current Bank staff though I do thank two anonymous readers for comments on drafts.

[2] A career staff member.

[3] Nigerian Julie Oyegun.

[4] A political appointee who had been Minister of Education in Nigeria.

[5]  Pierre Nkurunziza was President of Burundi from 2005 to 2020 and died in 2020 just before the end of his third term as President.

[6] Part of the background to the Ghana law, and to that in Uganda, is the toxic role of fake religious groups, usually from the US, who promote discriminatory laws for the purpose of fund-raising; it is possible that some African governments consider such groups to represent more of world opinion than they really do.

[7] To repeat:  in writing this piece, I have not talked to any current Bank staff.

[8] The next posts in this series will be on the Bridge school investment in Kenya and on the choice of the CEOs of the Bank and the Fund.