How Badly Can the 'Experts' Ruin the Planet?
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Remember the World Bank, that global "development" institution based in Washington, D.C., that dispenses billions of dollars a year to poorer nations with the declared intent of ending global poverty? We -- and many of you -- spent decades protesting the World Bank and documenting the bank's projects and policies that exacerbated economic, social and environmental problems. In the United States, thousands of protesters took to the streets in the years prior to 9/11 to condemn the financial behemoth. Across the Third World, where the impacts of World Bank lending are felt on the ground every day, such protests began even earlier.
This weekend, World Bank President Robert Zoellick will use the occasion of the World Bank and International Monetary Fund's annual meetings in Washington, D.C., to announce that critics like us were oh so wrong and that we should look to the World Bank to play a key role in solving the world's food, climate, poverty and other crises. Were we indeed wrong? Could millions of our allies in developing countries, including so-called beneficiaries of the development mega-agency, have possibly been so wrong? Is it a time for a mea culpa ? Having taken a close look at the World Bank past and present in our recently published book, Development Redefined: How the Market Met Its Match , we'd say it's not. But in the great tradition established by David Letterman, we now offer 10 reasons why we progressives can stop our worrying about poverty, food and climate crises and leave such problems to the World Bank:
10. The U.S. government chooses the World Bank president and has a superb track record in picking great ones, like war architects Robert McNamara and Paul Wolfowitz.
Remember Paul Wolfowitz, the first president tapped by George W. Bush for the top World Bank job? Wolfowitz had demonstrated his smarts at the Pentagon by launching "shock and awe" on Iraq. We all know how well that went. At the World Bank, he proved so good at steering six-figure salaries to his friends and girlfriend that he got an early retirement. And Wolfowitz was simply following the footsteps of the World Bank's most famous president, Robert McNamara, a former secretary of Defense who likewise paved his way to the presidency by waging war on a poor nation, in his case Vietnam.
9. The current World Bank president, Robert Zoellick, also knows how to get the job done, as demonstrated by his key role in helping George Bush steal Florida in the 2000 election.
A high-priced lawyer in the Bush campaign in 2000, Zoellick was dispatched by the Republican Party to Florida to help sort out hanging chads and butterfly ballots in W's favor. He was a crucial figure in prolonging the negotiations over who won the state until the Supreme Court could hand the presidency to George Bush. Zoellick subsequently was appointed as Bush's trade representative and helped ensure the demise of the World Trade Organization's so-called "Development Round" by pushing a U.S. agenda that had everything to do with advancing corporate interests rather than those of the marginalized and dispossessed.
8. The World Bank has proven expertise on one of today's major challenges: climate change. After all, it spent billions of dollars helping countries increase their emissions of the greenhouse gases that cause climate change.
When the Institute for Policy Studies started monitoring World Bank greenhouse gas emissions in 1997, the Bank was investing roughly 100 times more in fossil fuel energy projects than in clean energy. Tens of billions of dollars of dirty energy lending later, the Bank certainly has demonstrated its ability to contribute to climate chaos. As to its willingness to change course? Well, when an expert outside panel chosen by the World Bank to look into the impact of its fossil fuel lending counseled it to end its oil, gas and coal lending, Bank management simply said: thanks, but no thanks.
7. Likewise, on food, the Bank has tons of expertise -- going back to the "green revolution" of the 1960s -- pushing agricultural "development" models that hooked farmers on costly petroleum-based fertilizers and pesticides.
Such agricultural "modernization" proved a boon for those (including giant export-oriented agribusiness firms) who could afford the inputs, while small farmers lost their land or went bankrupt. (Inequality increased. And, as for the environment, well ...) Many politicians are now calling for a second "green revolution" as food prices rise around the globe and are looking to the World Bank to stand center-stage in such an initiative. Why spend time learning the lessons from a first "green revolution" gone wrong when the World Bank stands ready to repeat the mistakes?
6. For those who worry that the World Bank is increasing the divide between rich and poor through unfettered "free trade," have no fear: The World Bank has embraced what Zoellick calls "inclusive globalization."
Here, Zoellick is onto a truth of some sorts. If you really get down to the basics, over the course of its history, the World Bank has been all about "inclusive globalization." For example, over the past two decades, the economic-globalization free-market model it pushed on its borrowing countries has propelled the total number of billionaires in the world from around 100 to 1,125, with a far more inclusive group of countries being home to the billionaires today. So too does the World Bank now acknowledge that its math was wrong and the number of people living in poverty today is actually much higher than the Bank's prior calculations asserted. In other words, "inclusive globalization" has helped create a larger, more inclusive class of poor people. Way to go, World Bank.
5. For those of you who worry that the poorest countries in sub-Saharan Africa have fallen off the map, Zoellick argues that the Bank understands that it needs to continue to focus on that region.
Indeed, who better positioned to deal with this than the World Bank, which has loaned tens of billions of dollars to Africa since the Bank set up shop right after World War II? The fact that poverty and inequality have risen in most African countries over that same period is surely pure coincidence.
Consider the case of Malawi, where the government explicitly rejected the World Bank's advice on how to deal with a crisis in domestic corn production that threatened widespread famine. The result of ignoring the Bank's expertise? By late 2007, Malawi was not only feeding its own population, but also exporting corn. Dare we suggest that if Zoellick really cares about sub-Saharan Africa, he would encourage other countries to follow Malawi's example and ignore the Bank's advice?
4. For those of you who worry that the World Bank has displayed zealous reliance on the private sector and "free" markets to solve problems over the past two decades, the World Bank now acknowledges that governments do have a role to play. So what if such acknowledgments are in speeches and publications rather than in actions?
Indeed, check out the Bank's preferred solution to climate change. It's to get governments out of the picture and let the invisible hand of "carbon markets" prevail. Talk about ingenuity regarding an appropriate role for the public sector: The Bank has devised a way to make hundreds of millions of dollars off carbon markets by charging a hefty commission on trades.
Or take the food crisis. By pressing countries to follow a set of policies geared to shift farmers from subsistence food crops (rice and corn, for instance, that the grower could eat) to export crops (cut flowers, ornamental plants, gourmet veggies -- that either can't be eaten or aren't meant for local stomachs), the Bank has created a "freer" global market for farm products grown largely by or for big agribusiness companies. Southern countries get to be more vulnerable to and dependent upon the whims of an unfair and volatile global market. And, now there's a role for governments to play in quelling the ensuing "food riots."
3. Bank officials have talked the talk on poverty for decades. So what if they haven't walked the walk?
Who could better grasp the challenges faced by people who make less than $2 a day than people who make hundreds of dollars a day, often tax-free? Who could better understand the needs of poor people than experts who zip in and out of poorer countries and stay in five-star hotels? And, as for those World Bank staff who do live in-country, who could better comprehend the realities of the average poor person there than Bank staff who typically live in mansions with chauffeurs and gardeners?
2. The World Bank is, in its own terms, a "knowledge bank." It houses the world's largest development research outfit, and therefore has the research base and expertise needed to meet today's development challenges. So what if it stifles dissent?
Indeed, even a team of mainstream evaluators the Bank commissioned expressed "substantial criticisms of the way that (Bank) research was used to proselytize on behalf of bank policy, often without taking view of the evidence, and without expressing appropriate skepticism." The evaluators found "unfavorable research ignored" and researchers to be "under pressure from the Bank presidency and elsewhere not to say things that go directly against the broad policy line that the Bank is espousing."
1. Whatever you think of the World Bank, as Margaret Thatcher used to say, "There is no alternative."
Who else is there to turn to? Institutions like the Nobel prize-winning Grameen Bank, which lends tiny sums to millions of small entrepreneurs? United Nations bodies that specialize in helping small farmers? Programs that turn forests and fishing resources over to local communities to be managed sustainably? Small-scale institutions that encourage food sustainability and sovereignty? Popular organizations of the dispossessed and marginalized themselves? Why look across the South to discover the literally millions of alternatives when we have a global institution in Washington, D.C., with the kind of expertise we have just outlined?
Robin Broad is a professor of international development at American University in Washington, D.C. John Cavanagh directs the Washington-based Institute for Policy Studies . They are co-authors of Development Redefined: How the Market Met its Match (Paradigm Publishers), which travels through the past 30 years of World Bank lending and policies to discover just how right its critics were.