Countries Skeptical of World Bank Handling Climate Funds

Developing countries and non-governmental organizations are determined to keep the administration of new climate funds for developing countries away from the World Bank because of the structure and management of the Bank's environmental fund, the Global Environment Facility (GEF). A key stipulation of the recent Copenhagen Accord provides a fund for global warming adaptation in developing countries, which is likely to be structured similarly to the GEF. However, the GEF is often criticized because of the control of donors over how money is spent, its cumbersome administration and red tape, and the alleged usage of its funds as political tools.

This skepticism of the World Bank's management capabilities is well justified, following the scandal that has unfolded involving Indian IT behemoth Satyam Computer Services (now known as Mahindra Satyam). Satyam was banned from providing services to the World Bank for eight years as a penalty for giving improper benefits to staff members at the Bank and for collecting on undocumented invoices. This banning of Satyam was also apparently never communicated to the company's board or the SEC in the US.

Click here for more information on the Satyam scandal.