Snippets from the world of International Finance

Amidst Russia’s revanchist war against Ukraine starting last week, there is lots of ink on the financial markets and the sequence will hit the global economy. The flurry of events has shattered the hopes of steady global economic recovery and have only increased the geopolitical tensions, laying a path for high inflation and supply chain bottlenecks. The West’s response has been ad nauseam and those touting this invasion as an anti-imperialist act from Russia cannot be more wrong. While no war brings out the best, the Western media’s reporting of the situation has been insensitive at best (TW: racism at play). Overall the situation is that of an informational mess. There are a lot of nuances to the current situation and a lot more than just the stock market tumult, many key media portals have relaxed their paywalls for the reportage on Ukraine, while some e-zines are proving to be a great source too. The situation makes us realize that war is not an interruption of peace or a failure of diplomacy or capitalism, it is one of the solutions.

In an extra-judicial attempt, the Belmarsh Tribunal sat for its third session on February 26th with testimonies from witnesses including Alice Walker, Angela Richter, Austin González, Balthesar Garzón, Chris Hedges, Clare Daly, Claudia De la Cruz, Cornel West, Golriz Ghahraman, Guillaume Long, Jeremy Scahill, Jodi Dean, Milo Rau, Nancy Hollander, Nathan Fuller, Nick Estes, Noam Chomsky among others. Inspired by the Vietnam War tribunals of the late 1960s organized by Bertrand Russell and Jean-Paul Sartre putting the US government on trial for its war crimes, the Belmarsh Tribunal intends to expose the crimes of the so-called War on Terror 20 years after the first prisoners were brought to Guantánamo Bay with a call for Julian Assange’s freedom.

COVID-19 has shown how critical it is to radically redesign the economic system in a way that guarantees everyone’s safety and security. It requires us to move beyond the calls from leaders to “Build Back Better”, and for a “Great Reset” of capitalism. What do we need for this transformation? The Center for Economic and Social Rights has come up with an incredible and easy to read primer on human rights and economic recovery from COVID. This primer delves into the structural injustices that COVID-19 has exposed, the interpretation of  ‘just economic recovery’ from the lens of human rights obligations and means and methods to hold to account those in power.

Credit Suisse Leak

The claim of the 2011 OECD paper is officially wrong: the era of bank secrecy is far from over, reveals the historic leak of Swiss banking records. Last week’s Suisse Secrets leak confirms civil society’s long-held concerns that trusts can be used to circumvent transparency rules and hide money. An international group of journalists under the Organized Crime and Corruption Reporting Project (OCCRP) and coordinated by the Süddeutsche Zeitung published a broad range of articles about the leak. At the core of the scandal is leaked data from the bank Credit Suisse, with information concerning more than 18,000 bank accounts. Reviews of these OCCRP articles by experts brings forth another aspect as to why these accounts should not have been allowed to bank at Credit Suisse at all. With this news flaring up, experts have also raised concerns about Switzerland’s banking secrecy laws that are effectively meant to silence insiders or journalists who may want to expose wrongdoing within a Swiss bank.

At the World Trade Organization

In an email sent to members on 17 February, the General Council (GC) chair, Ambassador Dacio Castillo from Honduras, said “the possible windows for a reconvened MC12 are: 2 to 4 June 2022, or the week of 13 June 2022.” Apparently, several countries have expressed their preference for reconvening the World Trade Organization’s 12th ministerial conference (MC12) in the week beginning on 13 June. The US and the EU are expected to hold a high-level dialogue on 15-16 May, as part of the Trade and Technology Council (TTC),  in France. Many in the observer circles have touted this as a move for these countries to align their positions on the crucial agenda items for MC12 such as fisheries subsidies, dispute settlement, proposed WTO reforms, and the WTO’s response to the pandemic among others.

On 25th February, some changes to the appointment of the chairs of the various subsidiary bodies took place. The Swiss trade envoy Ambassador Didier Chambovey is expected to take over as the new chair of the WTO’s General Council on 24 February, replacing the much-praised GC chair Ambassador Dacio Castillo from Honduras, while Athaliah Lesiba Molokomme is likely to replace Ambassador Chambovey as the new chair of the Dispute Settlement Body.

From the World Bank

The World Bank on February 15th released its flagship World Development Report 2022. This year, the report revolves around the theme of  ‘Finance for an Equitable Recovery’ and the chapters deal with emerging risks to the recovery, bank assets distress, restructuring firm and household debt, managing sovereign debt, managing lending during recovery and finally the policy priorities for the recovery. The report is anchored on the inter-related economic risks that households, businesses, financial institutions, and governments worldwide are facing as a consequence of the COVID-19 induced economic crisis. The report looks at the economic policies undertaken by various governments to address distress caused due to the COVID-19 pandemic to be responsible for elevated risks like “public over-indebtedness, increased financial fragility, and a general erosion in transparency”. While this might be true to some extent, the magnitude of the fiscal response remained uniformly large by any historic metric in high-income countries and uniformly small or nonexistent in low-income countries due to lack of resources. Whilst the policy instruments used in this regard by various countries can be a tête-à-tête exercise in understanding how the conversations around equitable recovery are not informed by historically incapacitated institutions and mounting debt in the third world, the root cause of ‘fragility’ is conveniently ignored.

As a plug-in to this issue, the Group of 20 Finance Ministers and Central Bank Governors met in Jakarta on 17-18 February to discuss global economic recovery, the debt crises in many developing countries, international financial instabilities, the voluntary channeling of Special Drawing Rights (SDRs), global tax reform, inclusive and green finance, climate finance and infrastructure investment, among other issues.


The Asian Development Bank (ADB) alongside Asian Development Bank Institute (ADBI) have released the Innovation and Structural Transformation website and database. This can be a rich resource for students, researchers, universities and think tanks to study some of the key determinants of structural change and economic growth as the collation contains a database on – a) the shifts in the sectoral composition of the economy, including output and employment, and of how these shifts affect labour productivity; b) internationally-traded products that highlight the productive capabilities required to produce them; c) indicators of innovation, such as patent-based indicators associated with the development of new technologies; and d) indicators of global value chains (GVCs) which show the integration of economies into GVCs in terms of intensity, geographical distance, and diversity of their backward and forward linkages. Apart from this the ADB this month, released two working papers with Indian case studies on addressing nutritional security through multi-sectoral intervention and lessons in land pooling and urban expansion. There have also been new updates regarding environmental due diligence and environmental impact assessment (Corridor 3 and 4) of the Chennai Metro Rail Investment Project. The project is still in the proposal stage.

As per the latest update on the ADB’s 55th Annual Meeting 2022, the ADB is planning to proceed with the meetings in two stages. Stage 1 will be held on May 5th, 2022 where a virtual meeting of the Board of Governors will be live-streamed. A full-scale version (stage 2) with the rest of the additional Annual Meeting agenda and events will be held between 5th- 8th September 2022  in Srilanka, Colombo. The CSO sessions with the President are expected to be part of stage 2 events. 

The ADB is also continuing its safeguards policy updates in a run down until the final working paper is out in March 2023. This cycle of the safeguards policy updates has been closely monitored by several civil society organizations with the utmost attention. CSOs in a joint statement have reiterated their concerns that the key directions stated in ADB’s approach papers could lead to the dilution of important safeguard commitments. The joint statement has forwarded some key recommendations summarized below – 

  • Improve the safeguard system toward a review process strongly informed by the costly and grave adverse impacts from policy gaps, and poor or noncompliance of SPS implementation
  • Maintain the current risk categorization assessment for the environment, indigenous peoples (IPs) and involuntary resettlement and create binding requirements for each category
  • Maintain front-loaded requirements or quality of entry reports such as Environmental Impact Assessment (EIAs)  and Social Impact Assessment (SIAs) prior to board project approval and the time-bound release of documents
  • Maintain the use of equivalency and acceptability baseline for the use of the country safeguards system (CSS)
  • Strengthen the binding requirements for both sovereign and non-sovereign lending and avoid the IFC open-ended approach to compliance
  • Strengthened guidance for involuntary resettlement safeguard to include gender, economic and climate-induced displacements and cultural issues
  • Meaningful inclusion of more and urgent safeguards issues supported by a coherent umbrella of safeguards systems and tools – SPS should have explicit commitment and references to international laws, agreements and standards; the safeguard system should include baselines and risk assessments that aid in identifying the most critical hazards of assistance; introduction of a climate safeguard and inclusion of high-GHG emitting activities in the Bank’s list of the prohibited investment list 
  • Ensuring better protection of cultural heritage through recognition of the importance of both tangible and intangible cultural heritage for present and future generations
  • Expansion of safeguards coverage to emergency assistance, recovery and disaster risk loans, technical assistance, and associated facilities; due diligence on meaningful consultation and participation for all types of assistance
  • Application of Free, Prior and Informed Consent (FPIC) for all communities affected by ADB projects and not only for indigenous peoples
  • The SPS must include a principle on zero-tolerance to retaliations and introduce protections for human rights defenders, in accordance with the OHCHR and historical cases of disputes against borrowers and affected communities.

The CSO Session on AIIB’s Energy Strategy Update took place on February 25th, 2022 as was updated in our January 2022 snippets. In the context of the lack of publicly available information on the timelines, scope and approach of this update, there are no clear indications as to whether the AIIB intends to meaningfully engage with civil society organizations and project-affected communities. The CSOs in a collective call have called for “public disclosure of key timelines on AIIB’s website, an approach paper clearly explaining the terms of reference for the update, along with defined times allocated for consultations in both regional and non-regional borrowing member countries in the corresponding major applicable languages and appropriate time zones”. The collective call elaborates on the prospective priority areas for the 2022 Energy Sector Update, like the commitments to avert new and continued exposure to fossil fuel-related investment in a time-bound manner while embracing climate ambition and science and supporting scientifically sound renewable energy options; ensuring robust application of commitments to transparency and provision of access to grievance redressal; commitment to support sustainable, inclusive infrastructure.

Taking from this line of conversation, a new resource from the UN Office of the High Commissioner (OHCHR) titled Remedy in Development Finance (Guidance & Practice) brings out an expansive and in-depth look at whether development finance institutions (DFIs) remedy environmental and social harm caused by their projects. Released on February 23rd, this report is an important contribution to the discussion at a time when a lot of DFIs have been forced to relook at their remedy mechanism and acts as a wake-up call to international financial institutions. The report delves into the concept of remedy in great depth, demystifying and normalizing the concept and generating a wider understanding of the importance of the right to an effective remedy and access to remedy informed by international human rights standards. The report brings to stark attention what several CSOs have been demanding for quite a while now in their work alongside communities. After years of financing projects with environmental and socio-economic harm, it is high time that the DFIs have strong contingency plans anchored towards justice through instruments like remedy and reparations and understand “moral hazards” from the perspective of the rights holders.


That’s all for this month, we will be back again next month.


Note: These snippets are an attempt at providing a monthly roundup of the happenings in the International Finance arena. Do you have suggestions for us to make this better? We would love to hear from you. Please send them to us using this form.

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