Press release: Development banks fuel repression by heavily investing in countries that restrict civic freedoms

4 December 2024 – This month, the World Bank is set to vote on a potentially catastrophic project that involves displacing around 60,000 people, in one of the world’s most repressive countries. The Rogun dam in Tajikistan is one of the most blatant examples of how development banks often prioritize their own strategic interests over human rights, ignoring severe restrictions on civic freedoms in their countries of operations. Unfortunately, however, this case is far from unique.

According to the report “Financing Repression”– published by the Coalition for Human Rights in Development, Early Warning System (EWS) and International Accountability Project (IAP) – development banks are financing multi-million projects in highly repressive contexts, where people cannot publicly voice their concerns and civil society groups are unable to operate freely.  

“On paper, consultations with affected communities are a key requirement for development bank-funded projects. But how can the banks ensure public participation, in countries where the wrong opinion can land you in jail or where people don’t even dare to speak out as they are too afraid to do so?”, says Mark Fodor, Coordinator of the Defenders in Development campaign.

“Financing Repression” uses data from the civil society-led database Early Warning System to analyze development banks investments in countries marked as having “closed” civic space (according to CIVICUS Monitor data).

Some key findings include:

• From 2019 to 2023, 13 development banks invested at least US$ 88 billion through 1058 projects in 18 countries with closed civic space.
• The banks investing the most are: World Bank, Asian Development Bank (ADB), Asian Infrastructure Investment Bank (AIIB), International Finance Corporation (IFC) and European Investment Bank (EIB).
• China, Egypt, Uzbekistan and Vietnam received almost 90% of the total investments.
• In 2023, Uzbekistan, Laos, Djibouti and Egypt had the highest investments per capita.
• In the 18 countries with closed civic space, the most funded sectors are finance (13.6%), energy (12.7%), transport (11.8%), law and government (10.2%), and infrastructure (9.2%).

“The data revealed in this report is extremely concerning”, says Ryan Schlief, IAP’s Executive Director. “Millions are being funneled to the most repressive countries in the world, and this is just the tip of the iceberg. Unfortunately, transparency is often lacking and full details on the amount invested and the specific use of the funds provided remains unavailable.”

The report features five case studies (Azerbaijan, Egypt, Tajikistan, Uzbekistan and Vietnam), that illustrate how civic space restrictions pose serious risks for human rights defenders and communities who speak out about development projects.

“In these contexts, when development projects in authoritarian states do not align with the needs of local communities or when they lead to harmful impacts, there is little space for affected people to make their voices heard”, says Umida Niyazova from the Uzbek Forum on Human Rights.

• Azerbaijan: despite hosting the COP29 last month, human rights defenders who expose corruption or demand accountability in the energy sector are routinely criminalized. In the past five years, development banks have invested US$ 267 million in energy projects, but failed to use their leverage to demand freedom for anti-corruption activists like Gubad Ibadoghlu (who is currently under house arrest).
• Egypt: fear of repression has led to widespread self-censorship, preventing human rights defenders, CSOs and anyone from safely voicing their concerns about development projects, while development banks and the European Union (EU) continue to commit billions to finance the regime.
• Tajikistan: major development banks – under a scheme orchestrated by the World Bank – are financing the controversial Rogun hydroelectric project. If completed, this will become the tallest dam in the world. This project risks causing major environmental, social and financial impacts in Tajikistan and other countries downstream, with around 60,000 people expected to be displaced. But in such a repressive context, their concerns risk remaining unheard.
• Uzbekistan: the European Bank for Reconstruction and Development (EBRD), IFC and ADB are financing the cotton company Indorama Agro, despite reprisals – perpetrated by the company, government officials and security services – against workers, union members and human rights defenders.
• Vietnam: while negotiating and rolling out an international agreement on just energy transition with several development banks and Western governments, the Vietnamese government has been criminalizing environmental and climate leaders under false charges.

Among civil society groups, there are different perspectives on whether DFIs should invest in such contexts or not, and under what conditions. However, they all point to the need for development banks to exercise extreme caution.

“Development banks are incredibly powerful actors,” says Dalile Antúnez, Collaborative Researcher at the Coalition for Human Rights in Development. “When they finance authoritarian regimes without calling them out for the violations they perpetrate, they become complicit. If they want to invest in such contexts, at the bare minimum they should use their leverage, set clear indicators on civic space requirements, and recognize that when civic freedoms are blocked then also the success and sustainability of their operations is at risk.”

Additional quotes

“Additional resettlement of 50,000 people to build the Rogun dam in Tajikistan-  a country with a very problematic human rights record – directly contradicts safeguard policies of most development finance institutions. Alternative options, such as building a lower dam and rapid installation of solar panels, could better serve Tajikistan’s needs and prevent additional resettlement. Yet, favouring the current project proposal, the World Bank and the other financiers are spurring a silent humanitarian crisis, in a country where people do not even dare to speak up” (Eugene Simonov, Coordination of the Rivers without Boundaries International Coalition)

“When development projects in authoritarian states do not align with the needs of local communities or when they lead to harmful impacts, there is little space for affected people to make their voices heard. Banks lack effective mechanisms (both during the design and the implementation stages) to meaningfully engage with stakeholders, in contexts where freedoms of association and speech are so restricted that people are too afraid to voice their concerns. Moreover, banks have shown they are ill-equipped to respond to retaliations against workers and monitors, leaving an information vacuum in which rights can be violated with impunity.” (Umida Niyazova, Uzbek Forum on Human Rights)

The report will be presented during a webinar on December 4th (further info and registration here). Among the panelists, we will have:

• Mary Lawlor | UN Special Rapporteur on Human Rights Defenders
• Umida Niyazova | Uzbek Forum for Human Rights
• Jewher Ilham | Worker Rights Consortium, daughter of jailed Uyghur human rights defender Ilham Toti
• Zhala Bayramova | Human Rights Lawyer and daughter of human rights defender Gubad Ibadoghlu (Azerbaijan)
• Ryan Schlief | International Accountability Project
• Dalile Antúnez | Coalition for Human Rights in Development

For more information, please contact Lorena Cotza (Communications Lead, Coalition for Human Rights in Development) – lcotza@rightsindevelopment.org (+39 3285761056)

About the authors

The report has been endorsed by 37 organizations from around the world. The report is a collective initiative of the Defenders in Development Campaign (a project hosted by the Coalition for Human Rights in Development), which engages in capacity building and collective action to ensure that communities and marginalized groups have the information, resources, protection, and power to shape, participate in, or oppose development activities, and to hold development financiers accountable.

The lead co-authors are:

• The Coalition for Human Rights in Development is a global-south-led coalition of over 100 social movements, civil society organizations, and grassroots groups. We work together to advance community-led, rights-based development, and to hold development finance institutions, governments, corporations and other actors accountable for their impacts on peoples and the planet.

• International Accountability Project (IAP) is an international organization that advocates for policy change, boosts local advocacy efforts, and supports local activists and communities to access and exchange information on development that affects them. Through the Early Warning System (EWS), IAP contributed to the “Financing Repression” report tracking development bank investments in 18 countries with closed civic spaces during 2019-2023. The EWS database is the first web-based civil society-led initiative to organize, summarize, and standardize projects from 15 development finance institutions, with daily updates.