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World Bank OKs first Russia investment since crisis
By Korea HeraldPublished : June 4, 2014 - 20:47
The World Bank approved an investment in Russia for the first time since President Vladimir Putin annexed Crimea, overriding opposition from Canada and lack of support from the U.S.
The International Finance Corp., the lender’s private-sector arm, voted May 29 for parts of a 250 million euro ($340 million) package enabling French retailer Groupe Auchan SA to expand in Russia, Vietnam and other emerging markets, World Bank spokeswoman Serene Jweied said Tuesday in an email.
The deal thrusts the Washington-based bank, formed in the aftermath of World War II to rebuild Europe, into the debate over how to use economic sanctions to punish Russia for its actions in Ukraine.
“Canada took a principled stance by voting against this project because we do not support projects that benefit Russia,” Canadian Finance Minister Joe Oliver said in an emailed statement. “Russia must not interfere in the affairs of a sovereign state.”
The World Bank’s planned investment, its first related to Russia since February, forced countries that have slapped sanctions on Putin’s inner circle to consider withholding development aid as part of their toolkit of penalties.
The U.S. and three other constituencies at the board abstained, according to a board official who asked not to be named because he wasn’t authorized to disclose discussions among the bank’s 25 executive directors.
U.S. Treasury Department spokeswoman Holly Shulman had no immediate comment.
“It is important to note that we were the only ones to take a strong stand and vote against” the project, Oliver said. “Canada continues to call for calm and for Ukraine’s territorial integrity to be respected.”
Canada’s lone dissent at an institution that’s typically consensus-driven may have an impact on future loans in Russia, said Domenico Lombardi, a former World Bank board official.
“This is designed to apply some psychological pressure on the senior management of the institution to better calibrate the institution’s stance vis-a-vis Russia,” said Lombardi, who is now the director of the global economy program at the Waterloo, Ontario-based Center for International Governance Innovation in Canada. (Bloomberg)
The International Finance Corp., the lender’s private-sector arm, voted May 29 for parts of a 250 million euro ($340 million) package enabling French retailer Groupe Auchan SA to expand in Russia, Vietnam and other emerging markets, World Bank spokeswoman Serene Jweied said Tuesday in an email.
The deal thrusts the Washington-based bank, formed in the aftermath of World War II to rebuild Europe, into the debate over how to use economic sanctions to punish Russia for its actions in Ukraine.
“Canada took a principled stance by voting against this project because we do not support projects that benefit Russia,” Canadian Finance Minister Joe Oliver said in an emailed statement. “Russia must not interfere in the affairs of a sovereign state.”
The World Bank’s planned investment, its first related to Russia since February, forced countries that have slapped sanctions on Putin’s inner circle to consider withholding development aid as part of their toolkit of penalties.
The U.S. and three other constituencies at the board abstained, according to a board official who asked not to be named because he wasn’t authorized to disclose discussions among the bank’s 25 executive directors.
U.S. Treasury Department spokeswoman Holly Shulman had no immediate comment.
“It is important to note that we were the only ones to take a strong stand and vote against” the project, Oliver said. “Canada continues to call for calm and for Ukraine’s territorial integrity to be respected.”
Canada’s lone dissent at an institution that’s typically consensus-driven may have an impact on future loans in Russia, said Domenico Lombardi, a former World Bank board official.
“This is designed to apply some psychological pressure on the senior management of the institution to better calibrate the institution’s stance vis-a-vis Russia,” said Lombardi, who is now the director of the global economy program at the Waterloo, Ontario-based Center for International Governance Innovation in Canada. (Bloomberg)
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Articles by Korea Herald
