Attention! This Will Be Hard To Stomach...
C.S. Lewis asserted in his book The Abolition of Man that there is, in fact, a universal moral law, a Tao. Some things, he said in so many words, are just good. One good thing is love, and in particular, love for those who suffer. FTF tries to do this in our own flawed way.
So does the World Bank. No seriously. Here’s an excerpt from the World Bank mission statement,
At the World Bank, we have made the world’s most pressing development issue- to reduce global poverty- our mission.”
That’s a good thing. At least it reads as a good thing. But as you’ve already guessed, it’s not such a good thing. At least not in the hands of an organization that has grown very, very, very large. And, to be honest, disconnected. Why do I say this? In an excellent article from Pro Publica, Cheryl Strauss Einhorn documents a World Bank that is more interested in serving the needs of Saudi Princes and multinational corporations than the global poor.
Would you be surprised to learn that the World Bank recently lent Kingdom Holding Company, and it’s principal owner Prince Alwaleed bin Talal, more than $26 million dollars to build a five star hotel in Ghana, West Africa? Check it out here.
And would you be surprised to find out that Kingdom Holding Company, the company that needed a 26 million dollar loan is worth 12 billion dollars, and that Prince Alwaleed is worth 18 billion dollars; making him the 29th richest person in the world? I was surprised. But I shouldn’t have been.
Why? Because a bank needs to make loans. It’s how it makes money. And the World Bank is a bank. Da. What’s the big deal?
The big deal is that the World Bank’s program to aid the poor, called the International Finance Corporation (IFC) , doesn’t actually assist the poor, at least not all that often. And worse, the IFC is supported by you and I, the American taxpayer. Nearly a quarter of the IFC’s paid-in capital has come from U.S. taxpayers. That’s 2.4 billion dollars. Yes. 2.4 billion. Oh, and one other thing; every president in the World Bank’s 69 year history has been an American.
So, just to recap:
The IFC, created by the World Bank to get investment dollars flowing to poor people and poor people projects, recently invested $26 million in a 5 star hotel built by an Arab Prince. The World Bank’s own internal watchdog organization pointed out in 2011 that this kind of investment, though lucrative, really wasn’t what the IFC was supposed to be doing in developing nations. The watchdog group wrote, “Most IFC investments generate satisfactory returns but do not provide evidence of identifiable opportunities for the poor....”. They continued by saying, “The IFC has an explicit focus on poor people,” but that, “the IFC had a limited impact” on poverty.
This criticism, from 2011, is from the World Bank itself. Has anything changed?
I’ll let you be the judge of that (here's another story you should read). But you know the answer already. And if you think about it, things can’t change using this model. When loaning at interest and counting the profits is the primary metric for measuring success, then you have to fund the prince's fancy hotel. Fundamentally changing the lending mechanism would be the death of the IFC. It would be the end of banking as currently understood in 21st Century.
You see, giving and loaning are not the same thing. Giving your life for a cause is not the same as giving a loan. One is not giving at all. Banks don't give. Don't get me wrong, though. Loans can be helpful, even necessary, but the profit they reap cannot be a measurement of good. The banking metric just doesn't fit the Tao.
Support FTF where our investors give their lives to serve the poor. We don’t use interest rates to measure success. We might build a hotel one day (the hotel isn’t the problem, of course), but only if it truly serves the suffering poor, on the ground-- people we’ve come to know by name.