After World War II, two key international institutions were established to help revive and stabilize the global economy: the International Monetary Fund and the World Bank, whose origins are tied to the “Bretton Woods” conference, while their headquarters are in Washington. Although they fall under the broader United Nations umbrella, they are distanced from it, since they retain a degree of independence in their operations.
Substantively, the IMF acts as a regulator in the international monetary system, handling macroeconomic issues and providing loans for structural adjustments linked to countries in need and shaped by various special drawing rights, enabling the latter to access funding. The WB is the other arm, providing loans and grants to countries, with special provisions for poorer countries and outreach to the private sector in generating resources and investing in countries, bolstered by safety insurance for their commitments.
In composition, the WB is more correctly known as the World Bank Group to reflect the diversity of its portfolios. The International Bank for Reconstruction and Development is the general banking arm dealing with countries. Its International Development Association helps low-income countries with interest-free loans and grants. The International Finance Corporation interlinks with the private sector for operations, while the Multilateral Investment Guarantee Agency provides the backup guarantees for investors as a kind of institutional insurance.
In the decades of their work, various challenges have arisen in relation to negative impacts on human rights, and social and environmental issues which have pressed, in particular, the WB to set up various accountability mechanisms to receive complaints from affected communities, such as on “damned dams,” invasive transmigration and predatory microfinance. This has led to various oversight procedures for redress. There is an Inspection Panel, which is the channel for complaints related to the IDA. There is the Compliance Advisor Ombudsman, who enjoys the assurance of independence to address communications regarding the IFC and MIGA.
These entities press for a management plan for WB managers to address the harm, and they then make proposals to the board for leverage. This can then lead to dialogue and negotiation to mitigate the damage and provide remedies, such as compensation. However, onlookers have commented that the IMF should aim for more transparency and accountability along these lines.
Two recent developments are of note. The IMF and WB adopted their debt sustainability framework for low-income countries in 2026 to invigorate analysis of domestic debt, bearing in mind new demands such as climate adaptation, which necessitate a long-term response, exemplified by the multiple floods and droughts visible worldwide. For the WB, the three accountability mechanisms — the Inspection Panel, the CAO and the dispute settlement service are now to be merged. The outer aim is to simplify accountability mechanisms into a single stream for efficiency. Yet, civil society is watching cautiously, asserting the need for independence of action by the streamlined setup, preferably with more participation by civil society and developing countries in the whole system.
To address these concerns, the IDA in its outreach should assist civil society in a more robust manner. It has at its disposal various trust funds and links with philanthropy which can open doors to cooperate with civil society. For example, in view of the wrenching cutbacks of aid affecting the work of many non-governmental organizations, it should explore capacity building to help them generate funds rather than continue the old habit of asking for donations. Some good examples can be shared from local practices. In Thailand, for example, a key civil society organization that helps with sexual health, epitomized by its creative and colorful use of condoms, runs a restaurant to generate funding. An NGO supporting girls to help with community development in the heart of Bangkok runs a public kitchen linked with its farm, and it has residences for rent to create its own resources, without having to ask for foreign funding. Both the WB and IMF should innovate to promote savings rather than debt and dependency!
The IFC’s relationship with the business sector has now to be viewed from the angle of impact on human rights, society, governance and the environment. The global framework for transparency and accountability is based on the UN Guiding Principles on Business and Human Rights. This advocates threefold obligations tied to both the state and the business arm; the state has the duty to protect, such as to adopt laws to protect labor rights and the environment; the business sector has the duty to respect, such as to undertake due diligence measures to assess potential and actual harm and aim for mitigation; and there is the combined duty of the state and the business sector to remedy the harm. The latter opens up to many forms of redress, formal and informal, such as via the courts, mediation and other channels. The IFC’s policy under the title “IFC Sustainability Framework” is similar to the UNGP, although not completely in relation to the protection of human rights defenders.
Concretely, as seen in Thailand’s experience on this front, the major thorn in the works is the range of Strategic Litigation against Public Participation resorted to by the business sector and sometimes the state itself to undermine claims for redress from civil society. A major issue is thus how to enable anti-SLAPP measures to be adopted. In this regard, Thailand has undertaken some constructive steps, such as reforming the Criminal Procedure Code to enable the judiciary to screen out bad-faith (mala fides) prosecutions which are tantamount to SLAPP. Currently, proposals aim to amend the Civil Procedure Code to include similar provisions to counter civil suits with exorbitant damage claims. These are developments inviting both the WB and IMF to pluralize their relationships and reset the global-local rhythm.
In retrospect, the public may remember poignantly that decades ago, there was a call for the Bretton Woods institutions to adopt measures “with a human face.” The caption still rings true, but with an additional tagline: “in the face of climate change, artificial intelligence and beyond.”
Vitit Muntarbhorn
Vitit Muntarbhorn is a professor of law at Chulalongkorn University and a former UN Special Rapporteur. The views expressed here are the writer’s own. — Ed.
(Asia News Network)
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