Monday, March 18, 2013

IDA 17: How the World Bank Undermines Its Own Development Goals

How the World Bank Undermines Its Own Development Goals
By Peter Bosshard
International Rivers, March 18, 2013

[Note: Links to all background documents are available at A civil society letter on the
topic to the US government is available at]

The World Bank's International Development Association (IDA) is the most
important source of development finance for the world's poorest
countries. A new round of finance is supposed to support goals such as
inclusive growth, gender equity, and climate resilience. With an
ill-devised proposal to increase IDA support for large infrastructure
projects, including new mega-dams on the Congo and Zambezi rivers, the
World Bank risks undermining these noble goals.

Donor governments will meet this week to start negotiations for the 17th
replenishment of the IDA fund. In a background paper, the World Bank
proposes to make regional infrastructure projects (or, in Bank jargon,
Regional Transformational Initiatives) a special focus of future IDA
projects. The Bank claims that such projects could "catalyze very
large-scale benefits to improve access to infrastructure services." It
lists the Inga 3 Dam on the Congo River (with a total price tag of $10
billion), and two hydropower and transmission schemes on the Zambezi
River (with a total price tag of $8-9 billion) as illustrative projects
for this approach.

Mega-dams and other complex, centralized infrastructure projects have a
bad track record in terms of addressing the water and energy needs of
the poor and reducing poverty more generally. In a letter to donor
governments, development and environmental groups warn that the new
approach would undermine the official IDA goals of inclusive growth,
gender equity, and climate resilience.

Inclusive Growth: The infrastructure projects proposed by IDA are not
designed to meet the needs of the poor, but to export electricity for
mining companies and urban centers particularly in richer countries,
with the hope that some of the export revenues will trickle down to the
poor. In the Democratic Republic of Congo, development banks have over
the past 40 years invested billions of dollars in the Inga 1 and 2 dams
and associated transmission lines, yet only 6 percent of the population
has access to electricity. The situation is similar in Zambia and
Zimbabwe, where the World Bank has funded the large Kariba Dam on the
Zambezi River.

Large, complex projects such as the hydropower schemes on the Congo and
Zambezi rivers do not boost local economies. They rely on imported
technologies and know-how, and do not create a significant number of
domestic jobs. In contrast, decentralized renewable energy projects such
as solar, wind, micro hydropower and improved cooking stoves would be
more effective at reaching the majority of the people in Africa and
South Asia who are not connected to the electric grid. They would also
create jobs in manufacturing and maintenance, and in the decentralized
industries (in agro-processing and other sectors) that they serve.

Gender Equality: Centralized infrastructure projects often have massive
negative impacts on local livelihoods, and women bear the brunt of these
impacts. In the case of the Inga 1 and 2 and Kariba dams, displaced
communities are still struggling to regain their standards of living
after more than 40 years, and women are particularly affected by the
loss of land and access to communal resources. If the benefits of
regional mega-projects do trickle down, they typically reach workers in
the formal economy, but not women who are least integrated in the cash
economy. Women, in other words, are the first to suffer and the last to
benefit from large, complex infrastructure projects. Again,
decentralized renewable energy projects are more effective at reaching
the homes of poor rural families and easing the burden on women, who
typically spend many hours each day on gathering firewood and other
domestic chores.

Climate Resilience: Reducing climate vulnerability requires flexible,
decentralized and diversified energy and water infrastructure. In times
of unpredictable rain fall, putting all eggs into the basket of large,
centralized reservoirs increases the vulnerability to climate shocks.
Already, Sub-Saharan Africa is the world's most hydro-dependent region.
World Bank and IMF experts have recommended that this dependence be
reduced in the interest of climate resilience.

According to IPCC research, the Zambezi exhibits the "worst" potential
effects of climate change among major African river basins. In spite of
this, the Mphanda Nkuwa and Batoka Gorge dams, which IDA proposes to
fund, have not been evaluated for the risks associated with the reduced
annual flows and more extreme floods and droughts that are expected
under a changing climate. Such an approach increases the climate
vulnerability of poor countries that can least afford it. Again, a
mixture of decentralized and diversified renewable energy options would
be more effective at strengthening the climate resilience of poor societies.

The World Bank admits that "without careful attention, the benefits of
large scale, transformational investments can bypass local communities
and the most vulnerable populations." As always it claims that this time
will be different. It promises "paying close attention to environmental
and social safeguards" and incorporating "livelihood development for
riparian communities" into projects. Given the fate of similar promises
in the past, this sounds like an effort of putting lipstick on the
famous pig.

IDA governments should drop the proposed emphasis on Regional
Transformational Initiatives under the replenished fund, and shift
resources to decentralized infrastructure solutions that can directly
address the needs of the poor. The World Bank cannot afford to waste
public resources on approaches that have failed in the past, and
campaign groups will be closely watching the IDA negotiations that begin
in Paris this week.

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