Wednesday, August 25, 2004

Bank on it!

Back on August 11, I referred to an article in the International Herald Tribune addressing the fact that the World Bank, charged with reducing poverty in developing nations, has no idea if its programs work or not.

According to Nadia Martinez, Latin America coordinator for the Sustainable Energy and Economy Network at the Institute for Policy Studies, writing in the August 16 Christian Science Monitor, it's even worse: The Bank knows that at least some of its policies don't help - and it doesn't care.
After years of pressure to make the World Bank more accountable for its investments, the bank's president, James Wolfensohn, pledged in Prague in 2000 to undertake a review of the World Bank's support for the extractive industries, particularly oil, gas, and mining.

A year later, Mr. Wolfensohn appointed Emil Salim, a former Indonesian environment minister who served under the Suharto dictatorship, to lead the review. Dr. Salim was also on the board of a coal company at the time of the appointment (though he resigned later). With those credentials, most of the environmentalists, faith-based groups, development advocates, and human rights activists who'd demanded this assessment were pessimistic about ever seeing the bank change.

To every observer's surprise, the report concluded in January that World Bank support for fossil fuel and other mining projects simply doesn't alleviate poverty.
What's more, the report said the Bank should take steps to ensure that money gained from such projects is used for such things as education and health programs instead of for weapons, to guarantee the rights of people, especially indigenous people, affected by those projects, and to get out of financing them at all by 2008.

Instead of acting on the report, the Bank sat on it for six months until the board of directors finally considered it on August 3, at which time it
opted merely to endorse minimal commitments to change the way the bank does business. For example, while they pledged to increase renewable energy financing by 20 percent annually, the base line the lender is using is so low that the target for renewable support in 2005 is lower than the bank's loans for renewables in 1994. Currently fossil fuel financing at the World Bank exceeds renewable lending by a factor of 17 to 1.
What's more, the developing nations targeted by the Bank don't even get the benefit of the energy produced, Martinez says, citing IPS studies that say 82% of the oil-extraction projects actually supply consumers in the US and Europe and
the main beneficiaries of World Bank fossil-fuel extractive projects are Halliburton, Shell, ChevronTexaco, Total, and ExxonMobil, in that order, and the list continues.
The World Bank, that is, functions not as a means to help the poor escape poverty by economic development but as one to help the industrialized West continue to exploit them. There comes a point where reform is a pipe dream and the best thing to do is junk what you've got and start over. Check out the 50 Years is Enough campaign.

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