Just over a decade ago, the World Bank was the target of intense street protests, by activists incensed over the global development lender's policies. They alleged that the bank lacked accountability, and that it did the bidding of wealthy countries, often to the detriment of the developing nations it is supposed to help.
As the protests were reaching a climax, 9/11 shocked the world, changing the narrative of globalization. Suddenly street protests seemed inappropriate. Eventually, activists of the chanting, sign-waving variety turned their attention to more pressing matters like war in Iraq and Afghanistan, Guantanamo Bay and Abu Ghraib.
While few people were paying attention, out of the rubble of the war on terror rose a new era in assistance lending. Now, it's developing countries themselves that are doing most of the lending.
According to the Financial Times, the Brazilian Development Bank is expanding abroad. The bank, known as BNDES, doubled its loan book to $230 billion from 2007 to 2010 (a time when loan officers in the "developed" world were too panicked to lend). It just signed a $3 billion deal with the Japan Bank for International Cooperation, and it's looking to set up an office in Asia, to support Brazilian multi-nationals.
The FT article notes that the Brazilian Development Bank is now the second biggest in the world, after the China Development Bank. That puts the World Bank in third place — behind the lenders of two emerging economies, where per capita GDP is less than $11,000 and tens of millions live in deep poverty.
It will be interesting to see if the Chinese and Brazilians fare any better at the challenging game of development lending than the World Bank has. Brazil's bank has become the target of protests for its support of Amazon dam projects. And transparency has never been China's forte, nor has respect for human rights.
Human Rights Watch researched the Chinese Development Bank in a recent report on Angola. "Overall, they don’t appear to have even the minimal standards of the World Bank," said Arvind Ganesan, director of the organization's business and human rights program. "Plus, we are starting to see that the Chinese and Brazilian governments appear to be at the forefront of efforts to limit human rights protections at multilateral banks too," he added.
Meanwhile, the World Bank remains a sprawling global institution with professionals in many countries and economists who cover the global economy in ways that are indispensible. But the bank's diminished status — and the fact that it is located in Washington D.C. and always, by tradition, run by an American — are beginning to make its "world"-liness resemble that of the World Series or World Wrestling Entertainment — a bit Yankee-centric.
Perhaps a new name is in order?