Wednesday, October 9, 2013

Book review: Why the World Bank Continues to Fund Environmental Destruction

Why the World Bank Continues to Fund Environmental Destruction
By Peter Bosshard, Huffington Post, 10/09/2013 11:44 am

With 1,800 ongoing projects and more than $30 billion in annual
disbursements, the World Bank is the world's most powerful development
institution. More than anything, the lender prides itself in undertaking
the most complex, difficult initiatives in the developing world.

Building a pipeline from remote oilfields in Chad through Cameroon's
rainforest was just the right challenge for the World Bank's ambitious
approach. The multibillion-dollar project -- the largest investment on
the African continent -- involved numerous oil companies and financiers
from around the world. An innovative benefit-sharing mechanism and an
environmental panel of experts were created to ensure that the pipeline
would raise the living standards of the poor in a sustainable way. When
it was approved in 2000, the U.S. government called the project a
"prism" through which the world would view the World Bank and its
approach to development.

Fast forward to 2009. The pipeline has been built, and the oil has begun
to flow. Fueled by the new revenues, Chad's military budget has grown
more than 20-fold, civil unrest and corruption have soared, and the
benefit-sharing scheme has unraveled. Infant, child and maternal
mortality are rising. Oil has once again become the devil's excrement
for a poor African nation. Meanwhile, a part of the forestry reserve
that was supposed to offset the pipeline's ecological footprint in
Cameroon is being flooded by a reservoir -- courtesy of the World Bank.

If the Chad-Cameroon pipeline is a prism, what is wrong with the World
Bank's approach? A new book by Bruce Rich, a veteran Bank observer and
critic, provides a compelling answer. Titled Foreclosing the Future, the
book is based on three decades of experience in battling the Bank and a
treasure trove of internal documents.

Where the state is weak and civil society lacking, a rapid influx of aid
or oil revenues can easily undermine democracy and the rule of law.
Unless governance is strengthened first, aid dollars may not actually
lead to social development. Yet the World Bank does not have the
patience for slow, messy, participatory processes. Its senior management
equates lending volumes with development impact, and the staff is under
relentless pressure to move money out the door quickly. As an internal
Bank report found in 1997, this pressure leads to a culture in which
"the lessons from past experience are well known, yet ... generally
ignored in the design of new operations."

Bruce Rich illustrates the contradictions of the World Bank's lending
culture through an extended series of projects and initiatives. He
describes dams that impoverished local communities and fostered
corruption, forestry projects that caused massive deforestation, and
coal-fired power plants which bypassed the poor for whose benefit they
were supposedly built. He documents repeated promises to learn from past
mistakes -- and cosmetic reforms that failed to address the Bank's
flawed business model.

Bruce Rich calls the focus on lending volume rather than development
outcomes the World Bank's "original sin." The problem has been
documented and acknowledged in numerous internal reports. Yet when the
opportunity for the next big pipeline, dam or coal mine arises, the
interest of the aid bureaucracy in keeping the lending tap wide open
frequently prevails. Bruce Rich compares the internal reports that
document the lessons of past experience with the chorus in a Greek
tragedy -- a tragedy not for the Bank, but for the poor and the environment.

The new book offers a passionate and sharp-tongued but well-informed
analysis. Rich doesn't spare the World Bank management with critique,
but is aware that the buck doesn't stop there. The governments who own
and oversee the Bank recognize its failures, but will not take steps
that put contracts for their equipment suppliers and the steady supply
of raw materials at risk. Ultimately, the author says, the World Bank is
"a microcosm of global society's geopolitical and environmental

What needs to be done? Bruce Rich calls for a reorientation of the World
Bank's priorities to reward the quality of outcomes rather than the
quantity of lending. This, he argues, would allow the institution to
become a "beacon" of good social and environmental practice, for others
to follow. The author is short on specifics, and the chances of this
happening are slim. Yet his new book is a welcome memory pill as the
World Bank enters a new cycle of ignoring the lessons of past mistakes.

Bruce Rich, Foreclosing the Future, The World Bank and the Politics of
Environmental Destruction, Island Press, 344 pages, available at

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