Why MDBs should include human rights in the development agenda

Multilateral development banks cannot make decisions based solely on “economic considerations”, and should include human rights to truly advance its mission of development, writes ADB’s general counsel Christopher Stephens.

For over 40 years, multilateral development banks (MDBs) have wrestled with the role that human rights should play in their work. The factors impacting that debate have remained the same, but the world has changed. MDBs have transformed their core missions, and legal interpretations of the relevant clauses of their foundational charters have evolved.

MDBs are under increasing pressure to respond to calls for greater engagement in human rights. The issue is the extent to which human rights could and should be included in their core agendas.

The moral imperative of including human rights in development work gained prominence four decades ago. But it was only recently that economists concluded that the advancement of human rights also contributes to economic development.

MDBs, however, remain hesitant to include human rights among the key objectives of development, and continue to rely on traditional economic measures like trade, sector efficiencies, employment, income and capacity building.

The core mission of MDBs has evolved beyond their original mandate. The Sustainable Development Goals (SDGs) reflect the shift from infrastructure-related project loans to include the financing of “human development”.

The legal analyses of permitted engagements have also transitioned from the acceptance of limited human rights considerations to a more flexible understanding of advancing the human condition as a desirable objective.

MDB lawyers, nevertheless, tend to erect a firewall against fully embracing human rights based on a constitutional requirement not to interfere in the political affairs of their developing member countries.

MDBs should be flexible when interpreting mandates

To meet the SDGs, MDBs and their developing member countries need to be flexible when interpreting their mandates. MDBs’ charters require them to make decisions based solely on “economic considerations.”

In some cases, these requirements have been used by MDBs as a basis for declining to emphasise human rights.

But the theory that facilitating human rights constitutes interference in political affairs is misplaced. It’s not the political nature of the issue that is prohibited; it’s the interference. MDBs’ projects are collaborative in nature. They are derived from, determined by, and implemented through extensive consultations with developing member countries.

The denial of human rights thwarts development when it prevents countries from realising the full potential of their human resources. 

MDBs would not undertake any intervention—political or not—that “interfered” with the development priorities of their developing member countries.

A more flexible approach would allow MDBs to pursue human rights objectives that further their developmental and anti-poverty mission so long as those engagements are consistent—do not interfere—with the countries’ development priorities.

Twenty years ago, a priority focus on anti-corruption would have been perceived by many MDBs as inappropriate or “interference”, and was avoided as a desired project outcome.

Today, anti-corruption is so fully embraced that it is a universally presumed component of project implementation.

Accordingly, neither the “political affairs” prohibition nor the “economic considerations” requirement should prevent MDBs from introducing human rights in their core development agendas.

Promoting human rights often involves empowering groups of people whose basic rights are not respected, or who are disconnected from opportunities or vital public services.

There are, however, practical constraints on MDBs’ ability to actively promote human rights, particularly given the collaborative nature of their investments in developing member countries.

MDBs need to remain focused in areas where they are best-suited, and on their core purposes as financial institutions – not human rights advocacy groups.

MDBs promote human rights through safeguards

MDBs do not—and in my view, should not—stray into areas that can strain relationships with partners and clients, and ultimately jeopardise their development mission. The biggest advancement in human development and well-being is the alleviation of poverty.

MDBs must therefore pursue human rights in a balanced, practical, and appropriate context to maximise the efficacy of their interventions to eradicate poverty through economic development.

This does not mean that they should ignore human rights issues that impact development or poverty – and they don’t.

In fact, safeguards enable their interventions to defend indigenous and project-affected people, and promote environmental protection, education, gender equity, disaster relief, and climate change mitigation and adaptation.

As such, MDBs’ engagement in human rights is extensive, but not exhaustive. They have the influence to encourage the protection and advancement of quality of life and human dignity.

To put it directly, with money comes power: the power to dissuade undesirable actions and programs, and persuade, influence and achieve desirable outcomes. Among the latter is the respect for human dignity – particularly where doing so will advance development or reduce poverty.

Promoting human rights is in MDBs’ interest

Development is hindered most where domestic institutions are weak, and human dignity is not respected.

Too many countries remain poor as a result of a national failure to provide people with basic services and opportunities, as well as systems that allow people to achieve their potential.

Human rights are inextricably linked to equal opportunities for people to lift themselves and their communities from poverty. MDBs have the potential to leverage governments to do better on this front.

Likewise, the denial of human rights thwarts development when it prevents countries from realising the full potential of their human resources.

MDBs should put human rights at the core of their development agenda where doing so promotes human dignity, integration and equal opportunity, and leads to improved development outcomes.

It is the responsibility of everyone, as human beings, to do what we can to enshrine and recognise human rights – and encourage others to do the same.

This is also in the interest of MDBs, as it will help realise the goal of financing economic development to eradicate poverty.

This blog was first published by Devex and is republished from the ADB blog

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