On their 80th birthday, the colonial legacies of the World Bank (collectively for the IBRD – International Bank for Reconstruction and Development and the IDA – International Development Association) and the International Monetary Fund (IMF) have sparked calls for reforms, radical reconstruction and even shutdowns from civil society organisations (CSO) in the Global South/Majority World. This is due to the fact that despite these financial titans’ commitments and claims, much of the Global South remains in debt. Then, there is ‘obviously’ problematic leadership at these organisations that have always been American and European, some being climate change deniers.
In 2020, Professor Jason Hickel from the Institute for Environmental Science and Technology gave a thorough critique of the World Bank and IMF as institutions rooted in colonial-era principles that maintain a “financial apartheid” in global governance. He argued that the World Bank and IMF disproportionately empower wealthy nations – primarily the US and European countries – while marginalising the Global South, which suffers from neo-liberal Structural Adjustment Programmes (SAP) that fuel inequality, poverty, and economic dependence. Professor Hicket gave an insight into the stark imbalances in voting power in these institutions (e.g., a British vote outweighing a Bangladeshi vote by 41 times). Amid the global campaigns to #DecoloniseAid and #ShiftThePower, these institutions, too, need reforms to decolonise the global economy.
Born in 1944 at the Bretton Wood Conference, these institutions were designed to aid reconstruction in Europe post World War II. The institutions pledged to stabilise economies and spur development. Slowly, the focus shifted toward developing countries due to competition from the Marshall Plan, which was established by the US to provide foreign funds to Western Europe. Thereafter in India and much of the Global South, these financial institutions were (and are) seen as instruments that enforce neoliberal policies, at the expense of the very communities they claim to support. From India’s rural heartlands to conflict zones in Africa, the influence of the World Bank and IMF spans continents, economies, and ideologies, leaving a complex trail of colonial legacy.
In the early 1990s, India’s government, pressured by IMF loan conditions, embraced Structural Adjustment Programmes, marketed as steps toward modernisation – cutting subsidies, deregulating markets, and privatising state-run industries. But for the farmers in Maharashtra, “modernisation” meant they suddenly had to compete with corporate agribusinesses, often backed by powerful Indian conglomerates like Adani and Ambani. P Sainath, one of the prominent authors on rural India, has critiqued the neo-liberal policies of the IMF and the World Bank. He drew a powerful analogy, comparing SAPs to medieval bloodletting, where doctors drained patients under misguided beliefs—much like the IMF and World Bank drained resources from the Global South. These “economic leeches” have imposed privatisation, austerity, and deregulation, which deepened poverty and inequality to devastate Indian agriculture, leading to mass farmer suicides, and worsened conditions for migrant workers, on the cost of prioritising profit over people.
IMF and the World Bank have accepted that their policies do not work. In 2020, an internal World Bank report concluded that the poor are better off without structural adjustment.
The legacy of displacement: The Narmada Valley Project and beyond
In India’s Narmada Valley, the story of the Sardar Sarovar Dam is a prime example of the costs of World Bank-backed ‘development’. Perceived as a solution for the issue of irrigation and power, the dam displaced more than 41,000 families (over 200,000 people) across the three states of Gujarat, Madha Pradesh and Maharashtra, and 56 per cent of those affected were the Adivasi communities. Protesters, led by the Narmada Bachao Andolan (NBA) movement, argued that the dam destroyed livelihoods and displaced entire communities without adequate compensation. Under pressure from the NBA movement, the Indian government soon cancelled the remaining loans knowing that it could not meet the Bank’s guidelines, thus ending support from the World Bank for the Sardar Sarovar dam.
There are a number of such hideous incidents that have challenged the viability of these finance giants. In apartheid-era South Africa, the IMF offered loans to the white-minority government, despite clear evidence of funds being used to oppress the Black majority. This financial support for the apartheid regime contradicted the IMF’s stated mission of promoting stability. In the Democratic Republic of Congo, IMF and World Bank projects often extract resources while leaving local populations impoverished. During Congo’s ongoing conflicts, IMF-backed policies encouraged resource extraction to pay off debts, a strategy that exacerbated warlord violence and resource-driven atrocities7.
The pattern is painfully clear. The World Bank and IMF have historically promoted projects that left communities to bear social and environmental costs.
Climate finance or climate hypocrisy?
With COP29 labelled as a ‘finance COP,’ many eyes will be on the World Bank and IMF, which will be present in Baku, Azerbaijan, to host many sessions and webinars on recasting themselves as “climate banks”. The Bank claims that it delivered a record $42.6 billion in climate finance between July 1, 2023 to June 30, 2024. However, a report by Oxfam found that up to $41 billion in World Bank climate finance – nearly 40 per cent of all climate funds disbursed by the Bank over the past seven years – is unaccounted for due to poor record-keeping practices. Apart from that despite the Bank’s repeated promises to refocus on phasing out of fossil fuels and shifting to clean energy, in 2022, the Bank poured billions of dollars into fossil fuels companies in Africa and the Middle East. At COP28, the World Bank pledged 45 per cent of its annual financing to climate-related projects from July 1, 2024, to June 30, 2025. It is yet to be seen what the Bank will commit regarding the actual actions for phasing out fossil fuels in Baku at COP29.
It would be an oversight not to mention the World Bank’s complicity in global conflicts, wars and genocides, considering how wars are profiting the oil companies globally. The World Bank is complicit in the genocide in Gaza, failing to hold the US-backed Israeli occupation accountable for the humanitarian crisis. In its reports, the World Bank has repeatedly ignored the role of Zionist occupation in Gaza as the root cause of the war and its mention of Gaza as an equal party in a “conflict” reinforces the colonial and racist roots of the institution.
In India, it is no secret that the IMF’s policies have empowered domestic corporate giants like Adani and Ambani. By advocating for privatisation, the IMF created opportunities for large conglomerates to dominate sectors once controlled by the state. For example, Adani Group’s rise in the coal and power sectors was facilitated by policies that weakened state-owned enterprises and incentivised private investment. As of 2023, Adani’s coal projects spanned across major resource zones in India and abroad, often impacting local ecosystems and displacing tribal communities.
Accountability and calls for reform
In 2019, the US Supreme Court ruled in a historic decision that the World Bank could be sued in US courts. This revoked the bank’s immunity from lawsuits and allowed affected communities to hold the Bank accountable. The decision opened legal challenges to harmful projects’ by IMF and the World Bank (e.g., see the case of Juana Doe et al v. IFC from Honduras and India’s famous Jam vs. International Finance Corporation case).
But legal action is not enough. Activists have argued for governance reforms, such as shifting from a one-dollar-per-vote system to a one-country, one-vote model. The Global South would be empowered by this change and have an equal voice in choices that affect their destiny.
Congolese civil society groups have long insisted that local development must precede resource extraction in programmes supported by the IMF. Activists in India, where similar requests for reform have surfaced, say the World Bank should consult communities before supporting projects that damage local livelihoods. According to economist Jason Hickel, for these organisations to make significant changes, they must stop using GDP growth as an indicator of success and focus instead on the well-being of people and the environment.
Therefore as the World Bank and IMF celebrate their 80th anniversary, the call for a commitment to transparency and accountability is apparent. There is a need for a shift towards a development model that respects human rights and ecological balance. We, the people from the Global South, deserve institutions that prioritise our welfare over corporate profits.
This essay won first prize in the essay competition organized by the Centre for Financial Accountability on the topic *Interrogating the World Bank @ 80*. Learn more about the competition here.
Mehul has experience in nonprofit communications, focusing on issues like development, child rights, climate action, gender, and migration. They have supported advocacy efforts, global movements, and development communications grounded in a commitment to social justice. Mehul holds a BA in Journalism and Communication and an MA in Social and Cultural Anthropology.