By Toby McIntosh
The Steering Committee that manages a massive nonpublic database on the performance of loans in the developing world – to which the private sector is seeking access – has decided not to ask other entities to take over hosting the database, known as GEMs.
However, plans to release more data are still in the works, according to the European Investment Bank, which hosts GEMS for a consortium of international financial institutions that contribute the data.
Despite earlier hints to the contrary, the EIB will continue to host the database, according to a Jan. 18 e-mail to Eye on Global Transparency. EYE had requested a copy of a Request for Proposals (RfP) that was being prepared for distribution to countries and other entities who had expressed an interest in hosting GEMs.
The largely nonpublic Global Emerging Markets Risk Database (GEMs) was created in 2009 by the World Bank and other multilateral development institutions to house their information on loan performance. The 24 contributing institutions use the data for their own decision-making. GEMs is housed at the EIB and overseen by a steering committee composed of representatives from the 24 participating institutions.
The private sector has lobbied for release of the data, especially on loan defaults, saying that it would provide a more accurate picture of lending risks than is now available and thus would increase private lending in the developing world. Top World Bank officials and others in the GEMs consortium appear inclined to agree for the transparency request.
A change in venue was hinted at in World Bank report of September 2023. It revealed that the GEMs Steering Committee was “in the process” of sending out a RfP “to the G20 International Financial Architecture Working Group Secretariat and countries that have expressed an interest in hosting GEMs.” (See Oct. 6 EYE story.)
Those plans changed.
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EIB Says Work Underway on Better Governance and Management
Relying on the EIB’s access to information rule, EYE sought a copy of the RfP.
In denying the request on Jan. 18, the EIB said in an explanatory e-mail that the RfP was never sent out, but that the Steering Committee still is planning more transparency for GEMs. No time frame was given.
The idea of transferring the GEMs database to another host, the EIB said, was rejected, “in consideration of the significant legal and operational complexity and the substantial time and effort required.”
However, the EIB wrote, “The GEMs consortium is fully committed to the primary goal and most urgent task of making GEMs statistics accessible to investors and broader public to support and facilitate private investment to Emerging Markets and Development Economies (EMDEs).”
The Steering Committee, the EIB said, “is working on strengthening the governance and management model of GEMs to provide a robust legal and business environment to meet the challenges ahead.”
“This will result in an improved ring-fenced GEMs entity, which will continue to be hosted in Luxembourg at the EIB,” according to the EIB, continuing, “This solution provides an easy and effective way to concentrate on results and move quickly towards the dissemination of GEMs statistics.”
The EIB said further, “The publication of new recovery statistics, planned for Q1 2024, and the upcoming new governance arrangements are important steps towards GEMs 2.0 and realizing the G20 CAF recommendations.”
RfP Not Provided
The EIB said the RfP “was never finalised, approved nor transmitted.”
As a draft document, the EIB said, it can not be made public,
EYE first asked for the RfP on Oct. 3. The EIB replied on Oct. 17 that the RfP was still being drafted. EYE on Dec. 18 asked again for the document, generating the Jan. 18 denial.
When the Steering Committee deciding against outsourcing GEMs is unclear. Possibly it came in late October at the GEMs General Assembly Annual Meeting.
However, the meetings are closed and no agendas, documents or minutes are made public.
EYE on Dec. 18 filed a request for the minutes of the annual meeting. On Jan. 12, EIB said an answer would be delayed “Given the complexity of your request.”
EYE also has pending an appeal filed of July 20 of the partial denial of access to a requested document concerning a 2019 GEMs data-sharing agreement between the EIB and ILX. ILX is a Dutch investment company, the only private firm to gain access to the parts of the GEMs database. (See June 23, 2023, EYE article.)
All EYE stories on GEMs transparency are here.
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