Protests against World Bank climate loan in Nepal: What went wrong?

People are protesting against the World Bank because financing is occurring in the forms of loans. It could have been avoided if the World Bank had done a much better job at engaging the public.

Photo: Avishek Shrestha/Facebook

Simone Galimberti

  • Read Time 5 min.

Major international development organizations are not famous for their level of communication with the general public. It is not that they are not trying but they are simply “institutionally” constrained from reaching out to the citizenry. The recent protests against the concessional loan by the World Bank Group to Nepal indicate so. 

My hypothesis to understand why we reached a point where concerned citizens are protesting on the streets against $100 million financing to support Nepal’s transition towards a more sustainable future is that by default, enormous organizations like the World Bank despite their best efforts, are simply detached from reality. Only a much stronger and inclusive engagement approach to civil society can change the status quo.

The financing we are talking about would provide essential policy support to implement the so-called Green, Resilient and Inclusive Development (GRID) plan, helping the government of Nepal to address major reforms including land issues and what is called in development jargon as “smart agriculture,” forest management and waste and pollution.

Going through the official project document, you can understand how essential such policies are but it is neither an easy reading nor can the actions envisioned automatically or by magic wand change the lives of millions of people. It is mostly policy focused support, hard to comprehend unless you are an expert.

Yet, there are important objectives and policies aimed at strengthening the country’s climate governance that, no doubt, in the long run, can truly benefit the people of the country, provided that the government would do a good job at implementation level. This is something we cannot take for granted.

In this particular case, the protests against the World Bank are not really focused on the contents and on the pillars included in the project but rather on the fact that the financing is occurring in the forms of loans rather than grant. This is the major point of contention, something that could have been avoided if the World Bank had done a much better job at engaging the public. I am talking about engaging rather than simply communicating.

It is certainly not the lack of formal efforts like hiring competent communication staff (there are plenty and highly professionals) or having a country focused web page. Instead it is about the working culture of an institution like the World Bank that is too insulated and inaccessible from the public.

That’s why it is paramount to review the way the World Bank and other international organizations work with the public. I am talking about “work” because true engagement requires a true effort that, at the moment, I assume, goes beyond what the organizational culture of such organizations allows.

Lack of proper communication and lack of the ability to explain to the public why Nepal is signing a concessional loan rather than a grant agreement can degenerate into a crisis that at the end of the day can delegitimize the work of the World Bank. Not properly communicating and explaining the intricate reasons that brought two parties to agree on certain conditions and modalities, surely a decision following months and months of intensive negotiations, is already leading to a crisis of transparency.

There might be several reasons for opting for a concessional loan, a financing tool that is widely regarded as sustainable for a recipient country. That debt situation of Nepal is held as sustainable also because the economy, despite the challenges, proved to be more resilient than what many had predicted, compounded with the fact that Nepal is pushing towards a lower middle income status by 2030, could also explain the decision.

It is paramount to review the way the World Bank and other international organizations work with the public. 

We should also not discount, among other reasons, some self-pride (and vision) on the part of the government of slowly doing away with grants. These may be the reasons that led the World Bank and the Government of Nepal to sign a concessional loan.

Yet, here we are with people protesting and complaining about it.

While there is no doubt that the government itself could have done a much better job at explaining why such agreement is important and with it, the rationale leading to opting for a loan, the onus is now with the World Bank to heed people’s concerns about its operations in the country. And it is here where we really have to hope that the World Bank Nepal and its Headquarters in Washington DC can really start to re-imagine the ways they engage with the public.

For example, over the last few months, there have been important, high profile visits from senior World Bank officers, including a visit by the World Bank Managing Director for Development Policy and Partnerships, Mari Pangestu. Were any official engagements with the civil society also organized? Did such an important official who was accompanied by Regional Vice President for South Asia, Hartwig Schafer, a frequent visitor himself, meet with students and activists?

I hope such meetings happened because they could have certainly helped the public understand the important mission that the World Bank has in helping the country meet its ambitious plans as per its Second Nationally Determined Contribution.

In the past, there have been consultations with the civil society for the finalization of the World Bank’s latest Country Partnership Framework that was approved in a pre-pandemic era but there is not much information about such engagement with the civil society on the website of the World Bank.

The report of such consultations that I was able to find is only a power point of the official Bank’s presentation and it ends with five generic questions for the participants.

What were the points raised by the participants? What were their concerns? Who participated in such consultations? How many meetings were held and in which places? These are all relevant pieces of information that the World Bank should proactively provide and make them easy to access.

Apparently, and I hope to be mistaken, whatever consultations happened were “cosmetic” exercises only. Instead it is really in the best interest of the World Bank to try to do a better job with engaging the public. Engaging means assuming an attitude of genuine interest to listen and a willingness also to change our own mind following an exchange with someone with different views.

It is true that the World Bank has, at the end of the day, to negotiate and deal with the Government of Nepal but the working approach that, as we explained earlier, reflects a certain type of working culture should be much more inclusive and open. The current Country Partnership Framework expires next year. Then there is an opportunity for the World Bank to radically change its style and the ways it engages with the public, while brainstorming for the new document. Let’s imagine senior officials from the country office to be involved in a “road show” visiting schools and meeting with activists not in fancy hotel ballrooms but in the classrooms and even in the tea shops where activists normally meet to brainstorm.

Let’s imagine that the next high official coming from the World Bank Headquarters would also be involved in “town halls” meetings with youths and activists and be accessible for a press conference where also local news organizations and youth groups are welcome.

These are just small ideas that actually won’t require such a big effort on the part of the World Bank. Instead, what will be costly for the Bank is to find the willingness to break its own silos (what about an “Open Day” at the World Bank office?) and get into an uncomfortable terrain. If such a change of cultural mindset happens, there is no doubt that the World Bank would become a better organization and it will be more fun working there.

By now I hope I have been convincing enough to make the case for the World Bank to meet the protesters. They know where they are. By the way, around Maitighar Mandala there are some excellent tea shops.

Simon Galimberti is the Co-Founder of ENGAGE. Opinions expressed are personal.