Forever Under Construction

World vs. Bank

Posted in Development, Economics, Environment, India, World by homeyra on November 27, 2007

The World Bank claims to be the world’s preeminent anti-poverty institution.

But according to Robert Wiessman: “The developing countries that have most closely hued to policies imposed by the World Bank (and its sister institution, the IMF) have found themselves much poorer, less healthy and less educated than countries that have resisted Bank recommendations.”

Weissman, co-director of Essential Action, explains: “The World Bank’s great failings over the last decades are rooted in its commitment to the market fundamentalism known as “the Washington consensus.” This is a set of maniacal market-oriented policies including: deregulation of the economy, […] removing all trade barriers and orienting economies to support exports, massive privatization […], eliminating subsidies for basic necessities, rolling back legally guaranteed labor rights, cutting back on government services and restricting government spending. The Bank has also maintained a penchant for environmentally and socially destructive mega-development projects. […] The result has been a literal human disaster.”

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In September 2007 The Independent People’s Tribunal on the World Bank held at Jawharlal Nehru University, India, publicly audited programmes introduced by the bank in India for developmental activities. After listening to 60 depositions made by activists, economists, lawyers and researchers, the jury in its preliminary findings, charged the bank with serious violations of democracy and human rights and indicted it for meddling in India sovereignty.

Althought the World Bank had initially stated that it welcomes opportunities for dialogue, it pulled out of the tribunal in the last minute and none of its representative participated, as it didn’t accept to make itself accountable to the Tribunal judgment process.

Excerpts from the Jury findings:

leftbanner_wbt_1.gif “[…] the evidence and depositions we have witnessed presents a disturbing and shocking picture of increased and needless human suffering since 1991 among hundreds of millions of India’s poorest and most disadvantaged in rural areas and in the cities. […] a significant number of Indian government policies and projects financed and influenced by the World Bank have contributed directly and/or indirectly to this increased impoverishment and suffering. […]

The most disturbing leading indicator for this suffering is the alarming increase in farmer suicides since the 1990s. From 2001 to 2007 alone, […] 137,000 poor farmers have killed themselves. […] as a result of some or all of the following policies, such as: reduced subsidies […], higher prices for irrigation water, electric power, and seeds; […] reduced access to low interest loans for the poor, and opening up of the Indian economy to an uneven playing field in international trade in agricultural commodities. India’s farmers must now compete with imports from the heavily subsidized farms of the European Union and North America, at the same time when even the most meager state assistance for the poorest farmers is reduced. India was once self-sufficient in food production; its food security is now dependent on imports. […]

Other World Bank loans have promoted the institution of user fees in the health and education sectors, as well as partial privatization in these sectors. […] they have further disadvantaged the poor. […] The net effect of many Bank prescribed policy “reforms” appears to be the reorientation of the Indian State priorities from striving to secure a safety net for the poor and vulnerable to providing a safety net for large domestic and international corporations and investors.

We heard witnesses […] describe the deterioration for their communities from poverty to destitution because of forced displacement caused by World Bank financed projects. […] Although the Bank’s own Independent Inspection Panel found in 2002 that Bank management violated its own environmental and resettlement policies on 37 counts, Bank management has taken no effective measures to ameliorate the condition of these families. […]

[…] The Indian Government, of course, shares at the very least equal responsibility for all of the abuses we have witnessed, indeed a significant number of officials in key ministries such as finance and planning have either worked at the Bank or IMF, or share their assumptions and biases. Together all bear considerable responsibility for wide reaching policies and specific investments which in the name of growth and development have had the cruelest impact on the most vulnerable groups in our society.

[…] India and the international community must join to hold the World Bank accountable for policies and projects that in practice directly contradict its mandate of alleviating poverty for the poorest.”

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See also World vs Bank: The World Bank Campaign Europe, The Permanent Peoples’ Tribunal held a Public Hearing on the World Bank in October 2007, in The Hague, Netherlands. Analysis, Case Studies

Oxfam: World Bank ignores recommendations to help the poor, 2004
Oxfam: Six point plan for the president of the World Bank, 2007

Bank Information Center: World Bank governance challenges: what must be done, 2007
The Guardian: Charities want UK to withhold World Bank cash over loans to poor, Nov. 2007

Financial Hypocrisy by Nobel laureate Joseph Stiglitz

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