Uganda Sees Financial Backlash From Anti-Gay Law

CREDIT: AP Photo/Koji Sasahara

World Bank President Jim Yong Kim

The World Bank on Thursday announced that it would be indefinitely delaying $90 million worth of loans to Uganda, the largest repercussion yet to President Yoseri Museveni signing a bill earlier this week that threatens life in jail for Ugandan gays.

Earlier this week, Museveni ignored criticism from the United States and signed the bill, which aside from making homosexual behavior punishable by up to life in prison, bans all advocacy on LGBT issues. The law also provides incentives for citizens to turn in associates who are gay and declares that performing a same-sex marriage carries a sentence of seven years in prison. While the United States’ response has been mostly rhetorical in nature, pending an “internal review,” the World Bank chose to move forward with consequences on Thursday evening.

“We have postponed the project for further review to ensure that the development objectives would not be adversely affected by the enactment of this new law,” a World Bank spokesperson said, according to Reuters.

“It’s not surprising that the international community would be cautious in the aftermath of the enactment of this abhorrent law,” a State Department official told ThinkProgress when asked about the Bank’s choice. The White House, on the other hand, directed ThinkProgress to the World Bank for comment on their decisions. The U.S. currently provides nearly $500 million to Uganda in foreign aid annually, the vast majority of which goes towards public health efforts.

According to a World Bank spokesperson, the $90 million would have gone towards supplementing an earlier project focused on aiding in the delivery of the “the Uganda National Minimum Health Care Package (UNMHCP) to Ugandans, with a focus on maternal health, newborn care, and family planning.” The additional funding would have covered “the funding shortfall for the renovation of the health facilities selected under the original project.” The project falls under the Bank’s International Development Association, one of the two lending institutions within its structure, which focuses on providing loans and grants to the world’s poorest countries.

The World Bank has historically shied away from intervening in its client’s politics since its founding in 1944, leaving internal issues in the hands of their patrons and reform demands to fellow financial institution the International Monetary Fund (IMF). That seems to be changing under World Bank President Jim Yong Kim, formerly president of Dartmouth College. Kim emailed his staff shortly before the announcement was made, telling them “acts of discrimination against a group of people because of their sexual orientation cannot be tolerated.”

For the general public, Kim penned an opinion piece that ran at the Washington Post on Thursday, calling his own experience with discrimination growing up in Iowa “trifling indignities compared with the discrimination that many people around the world face based solely on their sex, age, race or sexual orientation.” He went on to call out the large number of countries that institutionalize discrimination — 81 around the world that criminalize homosexuality and more than 100 that discriminate against women.

“Institutionalized discrimination is bad for people and for societies,” he wrote. “At the World Bank Group, we will have a full internal discussion over the coming months about discrimination more broadly and how it would affect our projects and our gay and lesbian staff members. My view is that the fight to eliminate all institutionalized discrimination is an urgent task.”

The World Bank’s delayed loan is the largest sum that’s being withheld from Uganda in the aftermath of its implementation of the anti-gay law. Norway on Tuesday became the first country to reduce direct aid to Uganda, curtailing its assistance by about $9 million. The Netherlands and Denmark soon joined, pledging to redirect nearly $20 million of aid to private aid agencies and rights groups.

Despite being the World Bank’s largest shareholder — donating enough to have the most number of votes at the Bank’s tiered voting system — the United States has yet to take action against Uganda.