Global coalition calls for an end to ‘oil aid’
The End Oil Aid statement and list of endorsements are available at: www.endoilaid.org/globalcall.
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More than 200 organisations from 56 countries are calling on the World Bank and other international financial institutions to end subsidies to the oil industry. In a statement released today, the groups refer to ‘oil aid’ as one of the most glaring barriers to fighting climate change and addressing energy access in developing countries.
In 2007, the private-sector lending arm of the World Bank provided more than $645 million to oil and gas companies. This is an increase of at least 40 per cent from 2006. “The World Bank’s approach to climate change and energy is inconsistent and contradictory,” said Jennifer Kalafut of NGO Oil Change International. “Despite commitments to cut global greenhouse gas emissions, it continues to increase support for oil extraction projects around the world.”
In 2006, the World Bank increased its energy sector commitments from $2.8 billion to $4.4 billion. Oil, gas and power sector commitments account for 77 per cent of the total energy sector programme while ‘new renewables’ account for only 5 per cent.“The oil industry includes some of the most profitable companies in the world,” said Petr Hlobil of the CEE Bankwatch Network based in the Czech Republic . “Why is the World Bank using development assistance earmarked for poverty reduction to subsidise oil, when investment is desperately needed in renewable energy sources?”
The Bank’s support to the oil sector is also highly inequitable. While the majority of its oil projects are designed for export to wealthy countries, 1.6 billion people, including 500 million in sub-Saharan Africa , still lack access to electricity. “By funding these oil projects the World Bank is undermining its own goals of fighting energy poverty and reducing greenhouse gas emissions. It is also perpetuating problems of conflict and human rights violations often associated with extractive projects, as in the case of the Chad-Cameroon pipeline,” said Korinna Horta from Environmental Defense, a U.S-based NGO.
The hundreds of groups and affected communities that have signed this statement are demanding that the World Bank and other public financial institutions stop financing oil projects. They assert that development assistance should be tackling the issue of energy poverty and building clean energy pathways rather than subsidising big oil.
Saturday, October 20, 2007
Thursday, October 18, 2007
Faulty HIV Test Kits Funded by World Bank in India
Dr. Kunal Saha, a former consultant to the Department of Institutional Integrity (INT) at the Bank and now a client of the Government Accountability Project (GAP), has produced data showing the Second National HIV/AIDS Control Project in India has purchased and distributed bogus test kits. Dr. Saha has found that the kits, distributed by Monozyme, Ltd., show "false negative" results: HIV-infected blood samples appear to be 'clean' and suitable for transfusion.
A recognized expert in the field of HIV/AIDS research with two decades of clinical and research experience, Dr. Saha serves as an associate professor at Colombus Children's Hospital in Ohio.
Complaints about the kits first surfaced as long ago as 2004, but the National AIDS Control Organization (NACO) in India did nothing. In 2006, when the alarm spread to the press in India in Europe, NACO admitted that there had been a problem with some Monozyme kits, but argued that it had been confined to the state of West Bengal and the kits had been withdrawn.
But Dr. Saha found Monozyme kits in use for testing blood in the state of Chhattisgarh in April, 2007. When he spoke to the press, however, in July, 2007, the Bank distanced itself from his information, saying "The ongoing review has not substantiated any fraud involved with the kits to date.” NACO seconded the conclusion and sought Bank support: "The World Bank has not complained to NACO at all about defective HIV-kits being used in India."
After Saha presented his findings to the INT team and a senior public health official for the Bank on South East Asia in August in Washington, D.C., the lead investigator wrote him to say, "We recognize the need to follow up quickly on the issues you have raised and to that end would like to use your information in discussions with people outside the Bank." Then, nothing.
Yesterday, the story changed. In response to a Washington Post reporter's questions about the kits, the same health official who heard Saha's August presentation said that the Bank had no specific evidence that HIV had been transmitted in India because of faulty diagnostic tests.
This simply muddies the water. Dr. Saha is not making this specific charge. He can't. In order to know whether there has been transmission, the Bank, together with NACO, must identify the hospitals that used these kits and the donors whose blood was tested. They must then retest the blood and find the false negatives. Finally they must determine which of these people subsequently donated blood and track it to the patients who recieved HIV positive transfusions.
This has not been done, but Saha has presented data that show that it should be. In the meantime, the kits may still be in use.
A recognized expert in the field of HIV/AIDS research with two decades of clinical and research experience, Dr. Saha serves as an associate professor at Colombus Children's Hospital in Ohio.
Complaints about the kits first surfaced as long ago as 2004, but the National AIDS Control Organization (NACO) in India did nothing. In 2006, when the alarm spread to the press in India in Europe, NACO admitted that there had been a problem with some Monozyme kits, but argued that it had been confined to the state of West Bengal and the kits had been withdrawn.
But Dr. Saha found Monozyme kits in use for testing blood in the state of Chhattisgarh in April, 2007. When he spoke to the press, however, in July, 2007, the Bank distanced itself from his information, saying "The ongoing review has not substantiated any fraud involved with the kits to date.” NACO seconded the conclusion and sought Bank support: "The World Bank has not complained to NACO at all about defective HIV-kits being used in India."
After Saha presented his findings to the INT team and a senior public health official for the Bank on South East Asia in August in Washington, D.C., the lead investigator wrote him to say, "We recognize the need to follow up quickly on the issues you have raised and to that end would like to use your information in discussions with people outside the Bank." Then, nothing.
Yesterday, the story changed. In response to a Washington Post reporter's questions about the kits, the same health official who heard Saha's August presentation said that the Bank had no specific evidence that HIV had been transmitted in India because of faulty diagnostic tests.
This simply muddies the water. Dr. Saha is not making this specific charge. He can't. In order to know whether there has been transmission, the Bank, together with NACO, must identify the hospitals that used these kits and the donors whose blood was tested. They must then retest the blood and find the false negatives. Finally they must determine which of these people subsequently donated blood and track it to the patients who recieved HIV positive transfusions.
This has not been done, but Saha has presented data that show that it should be. In the meantime, the kits may still be in use.
Saturday, October 6, 2007
‘Privatisation puts too much wealth in too few hands’ - Isabel Guerrero
The World Bank’s new Country Head Isabel Guerrero admits failures and flags the need for changes in a candid conversation with SANKARSHAN THAKUR
http://www.tehelka.com/story_main34.asp?filename=Bu131007PRIVATISATION.asp
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TEHELKA: Tell us, Ms Guerrero, why does the World Bank continue to be such a bad word in India?
Guerrero: I understand why you ask that but I really don’t know, I am trying to understand that, I want to. I have been having lots of conversations, meeting people outside the Bank, from civil society, from the NGO sector, in order to get a sense. We have also done some perception surveys — as you come in, it is a great time to define your agenda, and a lot of that could be based on perceptions outside; those guide me at least in understandinghow effective we can be.
So what do these findings tell you?
Some of the sense that I get is that there is some misinformation. The Bank has advanced a lot in the last 10 years, although it still has a long way to go
What kind of misinformation?
Well, we had sessions in which we were told that we are lending huge amounts of money, that we are a big part of India’s debt, that we were very expensive, that we run governments (laughs) — things like that.
Lots of people do think the World Bank hugely influences government.
As a perception that is probably true but I think most of that is popular perception, not the reality. People don’t realise that we are a very small part of each programme. To give you a sense, in the Sarva Shiksha Abhiyan, we are only 10 percent of the total funds. Then, on the costs, we are supposed to be very expensive. But to give you an example from last year, the lending was $3.8 billion. Of that 1.8 billion was from the IBRD (the International Bank for Reconstruction and Development), which offers more commercial terms. So, on average, the cost of the loans was 2.25 percent, which is very low compared to other sources of funding. India also has a very very low percentage of debt. India is a very large country, we are really small in India.
There are issues about your opposition to subsidies, privatisation issues. People get very agitated about them. There was a tribunal held recently at JNU at which many of these allegations were brought forward. I know you have stock answers on these, but can we go a little deeper…
On subsidies, there were three clear areas in our poverty report. One had to do with empowerment, another with subsidies to the poor and the last to do with the droughts. On subsidies, we think they are a very good thing, they should be available to the poor in a transparent way. Subsidies to the rich in a country that has so many poor? I do not think that is a good thing. Give them to the poor. If you don’t it will go against social cohesion.
Water? Privatisation?
That is big, and world-wide. When your children and my children are grown up, the wars are going to be about water. At least in Latin America and I am sure in India too, water has a huge religious meaning. It is mother, it is soul, source of fertility, life. The meaning of water in the collective conscience is very important and therefore one has to be very careful in getting into it. It’s a lightning-rod issue, you touch it and phew!! The Delhi Jal Board issue was, I think, not well-handled from the Bank‘s side. I had a similar situation in Bolivia and in both cases the same thing happened. The Bank was accused of having pushed the privatisation of water, and in both cases it had not happened. In Bolivia we had reports alerting the government not to privatise water —you do it and tariffs are going to go up 400 percent —and it happened. Yet we were not heard. We made mistakes with the Delhi Jal Board, but it was impossible to be heard that we were not pushing for privatisation. So, we have learnt a lot from this, we have.
Read more on the following link :http://www.tehelka.com/story_main34.asp?filename=Bu131007PRIVATISATION.asp
http://www.tehelka.com/story_main34.asp?filename=Bu131007PRIVATISATION.asp
------------------------------------------------------------------------
TEHELKA: Tell us, Ms Guerrero, why does the World Bank continue to be such a bad word in India?
Guerrero: I understand why you ask that but I really don’t know, I am trying to understand that, I want to. I have been having lots of conversations, meeting people outside the Bank, from civil society, from the NGO sector, in order to get a sense. We have also done some perception surveys — as you come in, it is a great time to define your agenda, and a lot of that could be based on perceptions outside; those guide me at least in understandinghow effective we can be.
So what do these findings tell you?
Some of the sense that I get is that there is some misinformation. The Bank has advanced a lot in the last 10 years, although it still has a long way to go
What kind of misinformation?
Well, we had sessions in which we were told that we are lending huge amounts of money, that we are a big part of India’s debt, that we were very expensive, that we run governments (laughs) — things like that.
Lots of people do think the World Bank hugely influences government.
As a perception that is probably true but I think most of that is popular perception, not the reality. People don’t realise that we are a very small part of each programme. To give you a sense, in the Sarva Shiksha Abhiyan, we are only 10 percent of the total funds. Then, on the costs, we are supposed to be very expensive. But to give you an example from last year, the lending was $3.8 billion. Of that 1.8 billion was from the IBRD (the International Bank for Reconstruction and Development), which offers more commercial terms. So, on average, the cost of the loans was 2.25 percent, which is very low compared to other sources of funding. India also has a very very low percentage of debt. India is a very large country, we are really small in India.
There are issues about your opposition to subsidies, privatisation issues. People get very agitated about them. There was a tribunal held recently at JNU at which many of these allegations were brought forward. I know you have stock answers on these, but can we go a little deeper…
On subsidies, there were three clear areas in our poverty report. One had to do with empowerment, another with subsidies to the poor and the last to do with the droughts. On subsidies, we think they are a very good thing, they should be available to the poor in a transparent way. Subsidies to the rich in a country that has so many poor? I do not think that is a good thing. Give them to the poor. If you don’t it will go against social cohesion.
Water? Privatisation?
That is big, and world-wide. When your children and my children are grown up, the wars are going to be about water. At least in Latin America and I am sure in India too, water has a huge religious meaning. It is mother, it is soul, source of fertility, life. The meaning of water in the collective conscience is very important and therefore one has to be very careful in getting into it. It’s a lightning-rod issue, you touch it and phew!! The Delhi Jal Board issue was, I think, not well-handled from the Bank‘s side. I had a similar situation in Bolivia and in both cases the same thing happened. The Bank was accused of having pushed the privatisation of water, and in both cases it had not happened. In Bolivia we had reports alerting the government not to privatise water —you do it and tariffs are going to go up 400 percent —and it happened. Yet we were not heard. We made mistakes with the Delhi Jal Board, but it was impossible to be heard that we were not pushing for privatisation. So, we have learnt a lot from this, we have.
Read more on the following link :http://www.tehelka.com/story_main34.asp?filename=Bu131007PRIVATISATION.asp
Friday, September 28, 2007
‘TRIBUNAL CHARGES BANK WITH SERIOUS VIOLATIONS OF DEMOCRACY, HUMAN RIGHTS AND SOVEREIGNTY’
PRESS RELEASE
World Bank Officials Refuse to be Held Accountable
New Delhi: The four day Independent Peoples Tribunal (IPT) on the World Bank in India concluded here today hearing numerous depositions indicting the Bank’s policy and project interventions in India. Over six hundred people from communities, social movements, research institutes, NGOs and universities attended the proceedings. The Tribunal, supported by the Jawaharlal University’s Teachers Association and Students’ Union was held in the university premises.
The IPT invited the World Bank two weeks ago and while they did agree to make a presentation responding to some of the evidence, they failed to show up despite provision of adequate space and time by the organisers. They stated on their website that they had taken this decision because they are not accountable to the Tribunal process. We must record our shock at their blatant disregard of any need to be accountable to civil society and to a Jury comprising retired justices of the Supreme and High Courts as well as leading writers, academics, religious leaders and activists.
In its preliminary findings, the IPT observed the Bank had an undue and disturbingly negative influence in shaping India’s national policies disproportionate to its contribution, financial or otherwise.
While India is the world’s largest single cumulative recipient of World Bank assistance, with lending totaling about $60 billion (Rs. 2,40,000 crores) since 1944, current annual borrowing amounts to less than 1% of the country’s GDP. The loans, however, have been used as leverage to bring about important policy changes and impose conditionalities in areas such as governance reform, health, education, electricity, water and environment- many of these with obvious political and social consequences. The loans also legitimize substantial additional funding from a diversity of bilateral and multilateral donors such as the Asian Development Bank and Department for International Development (DFID-UK). The Bank’s loans have caused extensive social and environmental harm from mass displacement in the Narmada valley to loss of livelihoods of traditional fishworkers in places such as Barwani.
It was noted that such overbearing influence on India’s policy making was in violation of the World Bank’s own Rules of Association, which mandate it to be an apolitical institution that should not interfere in political processes of any member country. Further, the IPT depositions stated that the presence of former Bank officials in senior government positions was unacceptable and involved conflicts of interest.
UNDERMINING DEMOCRACY:
Vice Chairman of the Kerala State Planning Board Professor Prabhat Patnaik in his deposition cited the example of the Jawaharlal Nehru National Urban Renewal Mission (NURM), which is a World Bank designed project. In the Kerala NURM project, the state government, he said, was being forced to accept a conditionality to reduce stamp duties to 5% from the earlier 15-17%. To avail a loan of about 1000 crores, Kerala would lose up to Rs.7000 crores of government revenue.
Vinay Baindur of the Bangalore based Collaborative for the Advancement of Studies in Urbanism (CASUMM) showed evidence of how the Karnataka Economic Restructuring Loan (KERL) resulted in the conversion of a state government and its economy into a corporatised entity meant to generate funds for “private sector and enterprise development”. ‘The $250 million loan resulted in far reaching changes; the closure/privatisation of the public sector, nearly two lakh permanent employees were forced to take Voluntary Retirement Scheme (VRS) payments.
Further, the restructuring process led to a steep rise in farmer suicides; many of those who committed suicide did so because they were unable to pay the arrears in power costs that were suddenly slapped on them on account of power tariff hikes. “The withdrawal of subsidies for agriculture led to a sharp rise in the costs of cultivation”, argued Baindur in his deposition.
Jury member and scientist Meher Engineer said that he found the depositions on how the Bank forced inappropriate technology on India such as incinerators especially damning. ‘Given the well researched evidence that I have heard it is hard to imagine any role for the World Bank in the environment sector, he said. ‘The Bank is pro-rich, pro-urban and anti-environment’, he concluded.
The IPT was organized by an inclusive platform consisting of over 60 national and local groups (see list below). Activists, academicians, policy analysts and project affected communities presented evidence against the World Bank in over 26 sectors from 21-24 September. Jury members included historian Romila Thapar, writer Arundhati Roy, activist Aruna Roy, former Supreme Court Justice P B Sawant, former Finance Secretary S P Shukla, former Water Secretary Ramaswamy Iyer, scientist Meher Engineer, economist Amit Bhaduri, Thai spiritual leader Sulak Sivaraksa and Mexican economist Alejandro Nadal amongst others.
WORLD BANK AND GOVERNMENT OF INDIA MISSING IN ACTION:
But in response to the depositions the Bank posted a Q&A document on its India home page. In the document, the Bank makes the outrageous claim that, “The World Bank definitely has not recommended the privatization of water supply services in India”. It is particularly worrisome that the Bank has to repeat a series of untruths and not own responsibility for the extensive harms they have caused.
In a sign of convergence with the Bank, the Government of India also failed to send even a single representative to the event, despite personal invitations, emails and faxes being sent 2 weeks in advance to several Government officials at all ministries that borrow money from the World Bank.
PUSHING FOR ELECTRICITY PRIVATISATION:
In the 1990s, 20-30% of World Bank loans in India went to the energy sector. Orissa had the dubious distinction of being the first state to receive World Bank loans for restructuring the sector. Sreekumar N, from the Pune based Prayas Energy Group argued that based on World Bank advice, Orissa spent upto Rs.306 crores for foreign consultants, ignoring local expertise. The consultants recommended the privatisation of distribution and the American firm AES that took over distribution in the central zone behaved in a high handed manner and ultimately exited the state in 2001.
BANKS TOXIC COLONIALISM:
Nityanand Jayaraman of the Chennai based Corporate Accountability Desk in his desposition before the jury said, ‘The Bank is perpetrating toxic colonialism by funding discredited and polluting technology interventions’. As evidence he presented cases where the Bank has promoted the setting up of more than 88 Common Effluent Treatment Plants, more than 90 percent of which were shown to have failed to meet environmental norms by the Central Pollution Control Board.
JUST THE BEGINNING:
Wilfred D’ Costa, General Secretary of the Indian Social Action Forum(INSAF) one of the convening groups of the IPT said, ‘The tribunal has been useful since it has seen a convergence of social movements, unions, academicians, researchers and struggle groups from across the country. Our next steps would be to use this platform to create a broad based political struggle against neo-liberalism and work towards an India without institutions such as the World Bank and the Asian Development Bank’.
World Bank Officials Refuse to be Held Accountable
New Delhi: The four day Independent Peoples Tribunal (IPT) on the World Bank in India concluded here today hearing numerous depositions indicting the Bank’s policy and project interventions in India. Over six hundred people from communities, social movements, research institutes, NGOs and universities attended the proceedings. The Tribunal, supported by the Jawaharlal University’s Teachers Association and Students’ Union was held in the university premises.
The IPT invited the World Bank two weeks ago and while they did agree to make a presentation responding to some of the evidence, they failed to show up despite provision of adequate space and time by the organisers. They stated on their website that they had taken this decision because they are not accountable to the Tribunal process. We must record our shock at their blatant disregard of any need to be accountable to civil society and to a Jury comprising retired justices of the Supreme and High Courts as well as leading writers, academics, religious leaders and activists.
In its preliminary findings, the IPT observed the Bank had an undue and disturbingly negative influence in shaping India’s national policies disproportionate to its contribution, financial or otherwise.
While India is the world’s largest single cumulative recipient of World Bank assistance, with lending totaling about $60 billion (Rs. 2,40,000 crores) since 1944, current annual borrowing amounts to less than 1% of the country’s GDP. The loans, however, have been used as leverage to bring about important policy changes and impose conditionalities in areas such as governance reform, health, education, electricity, water and environment- many of these with obvious political and social consequences. The loans also legitimize substantial additional funding from a diversity of bilateral and multilateral donors such as the Asian Development Bank and Department for International Development (DFID-UK). The Bank’s loans have caused extensive social and environmental harm from mass displacement in the Narmada valley to loss of livelihoods of traditional fishworkers in places such as Barwani.
It was noted that such overbearing influence on India’s policy making was in violation of the World Bank’s own Rules of Association, which mandate it to be an apolitical institution that should not interfere in political processes of any member country. Further, the IPT depositions stated that the presence of former Bank officials in senior government positions was unacceptable and involved conflicts of interest.
UNDERMINING DEMOCRACY:
Vice Chairman of the Kerala State Planning Board Professor Prabhat Patnaik in his deposition cited the example of the Jawaharlal Nehru National Urban Renewal Mission (NURM), which is a World Bank designed project. In the Kerala NURM project, the state government, he said, was being forced to accept a conditionality to reduce stamp duties to 5% from the earlier 15-17%. To avail a loan of about 1000 crores, Kerala would lose up to Rs.7000 crores of government revenue.
Vinay Baindur of the Bangalore based Collaborative for the Advancement of Studies in Urbanism (CASUMM) showed evidence of how the Karnataka Economic Restructuring Loan (KERL) resulted in the conversion of a state government and its economy into a corporatised entity meant to generate funds for “private sector and enterprise development”. ‘The $250 million loan resulted in far reaching changes; the closure/privatisation of the public sector, nearly two lakh permanent employees were forced to take Voluntary Retirement Scheme (VRS) payments.
Further, the restructuring process led to a steep rise in farmer suicides; many of those who committed suicide did so because they were unable to pay the arrears in power costs that were suddenly slapped on them on account of power tariff hikes. “The withdrawal of subsidies for agriculture led to a sharp rise in the costs of cultivation”, argued Baindur in his deposition.
Jury member and scientist Meher Engineer said that he found the depositions on how the Bank forced inappropriate technology on India such as incinerators especially damning. ‘Given the well researched evidence that I have heard it is hard to imagine any role for the World Bank in the environment sector, he said. ‘The Bank is pro-rich, pro-urban and anti-environment’, he concluded.
The IPT was organized by an inclusive platform consisting of over 60 national and local groups (see list below). Activists, academicians, policy analysts and project affected communities presented evidence against the World Bank in over 26 sectors from 21-24 September. Jury members included historian Romila Thapar, writer Arundhati Roy, activist Aruna Roy, former Supreme Court Justice P B Sawant, former Finance Secretary S P Shukla, former Water Secretary Ramaswamy Iyer, scientist Meher Engineer, economist Amit Bhaduri, Thai spiritual leader Sulak Sivaraksa and Mexican economist Alejandro Nadal amongst others.
WORLD BANK AND GOVERNMENT OF INDIA MISSING IN ACTION:
But in response to the depositions the Bank posted a Q&A document on its India home page. In the document, the Bank makes the outrageous claim that, “The World Bank definitely has not recommended the privatization of water supply services in India”. It is particularly worrisome that the Bank has to repeat a series of untruths and not own responsibility for the extensive harms they have caused.
In a sign of convergence with the Bank, the Government of India also failed to send even a single representative to the event, despite personal invitations, emails and faxes being sent 2 weeks in advance to several Government officials at all ministries that borrow money from the World Bank.
PUSHING FOR ELECTRICITY PRIVATISATION:
In the 1990s, 20-30% of World Bank loans in India went to the energy sector. Orissa had the dubious distinction of being the first state to receive World Bank loans for restructuring the sector. Sreekumar N, from the Pune based Prayas Energy Group argued that based on World Bank advice, Orissa spent upto Rs.306 crores for foreign consultants, ignoring local expertise. The consultants recommended the privatisation of distribution and the American firm AES that took over distribution in the central zone behaved in a high handed manner and ultimately exited the state in 2001.
BANKS TOXIC COLONIALISM:
Nityanand Jayaraman of the Chennai based Corporate Accountability Desk in his desposition before the jury said, ‘The Bank is perpetrating toxic colonialism by funding discredited and polluting technology interventions’. As evidence he presented cases where the Bank has promoted the setting up of more than 88 Common Effluent Treatment Plants, more than 90 percent of which were shown to have failed to meet environmental norms by the Central Pollution Control Board.
JUST THE BEGINNING:
Wilfred D’ Costa, General Secretary of the Indian Social Action Forum(INSAF) one of the convening groups of the IPT said, ‘The tribunal has been useful since it has seen a convergence of social movements, unions, academicians, researchers and struggle groups from across the country. Our next steps would be to use this platform to create a broad based political struggle against neo-liberalism and work towards an India without institutions such as the World Bank and the Asian Development Bank’.
Saturday, September 22, 2007
Press Release : 22 September 07
Flat No.14, Supreme Enclave, Mayur Vihar-I, Delhi-110091
www.worldbanktribunal.org
PRESS RELEASE
22 September 2007
Changing Role of the World Bank
New Delhi:
Today is the second day of the Independent Peoples Tribunal on the World Bank Group in India, which got underway at New Delhi yesterday at a packed auditorium at Jawaharlal Nehru University (JNU).
Addressing the new concerns regarding World Bank operations Dr. Prabhat Patnaik, (Deputy Chairman of Kerala Planning Commission) specified his point of view on the changing arena of operations of World Bank enforcing trade liberalisation. He further stated that this enforced trade liberalisation was perpetuating international division of labour, similar to that of the exploitative colonial form, but not exactly identical. "McNamara’s policy veils poverty alleviation and forces them to liberalise on the basis of comparative advantage and efficiency of trade," he stressed. Mr. Patnaik stated that the whole range of natural resources were privately appropriated which opened up the domain of natural resources for MNC and private appropriation. "Therefore, this is a form of ‘grabbing public and state property of accumulation through encroachment".
According to him, the World Bank operations have infiltrated both the Centre as well as the states, besides the grassroots operation of World Bank give them leverage to appropriate resources. Prof. Patnaik said that the JNNURM was a conditional package which gave a gross revenue loss of Rs. 7000-crore. “This is economic absurdity, therefore, greater state intervention and allocation on basis of social priority. This perpetuation of appropriation resulting in commodification is done with little money and major leverage".
He said that while the World Bank many have undergone a shift in emphasis, its basic thrust has not changed. "Trade liberalisation that continues to proportionate a division of labour that benefits the economic and political states nationally and globally". According to him, the World Bank is now committed to expand private control of land and natural resources. "Every where in the country we now witness the grabbing of common resources and spaces occupied by petty producers as well as the privatisation of the public sector".
Jayati Ghosh, who spoke on the issues related to the private sector, lamented that it was a matter of great concern how the World Bank was managing to be so powerful when so little of its money involved in India, less than 1% of the Indian Budget. "The bank is managing to be so powerful because it has infiltrated in Indian bureaucracy where it influences bureaucrats by organising capacity building, workshops etc. Many of our govt officials are now allowed to take a project with WB while on leave. This money, which is huge compared to Indian salaries, is tax free. Now WB is moving at the lower levels and infiltrating Zila Parishads and municipal corporations. While state governments exonerate themselves insisting on lack of funds, these zila parishads and municipal corporations are encouraged to take loans from WB and elsewhere. Thus these loans come with a number of conditionalities which finally push the agenda for privatisation", she asserted.
She added that the World Bank has increasingly been dealing with state governments who were in fiscal crisis where even a small amount of money appears to be substantial. According to her, the WB is not controlling the whole development discourse where research is essentially controlled by WB which in turn pushes its agenda. There is very little independent , objective, development research. A study by about 5-6 neo-liberal American researchers has found that WB promotes its own agenda through research and suppresses objective research. WB never put this study on its website despite its stated claims of transparency. "The essential issue today that needs to be looked into is how WB has changed and continues to change development discourse in India and elsewhere".
She also gave a critical scrutiny of the World Bank operation and stated that the enforcement of trade liberalisation should be removed. Arguments of trade liberalisation like comparative advantage cause stagnation in global division of labour and thus developed world would developed and developing world would stagnate. She refuted the comparative advantage argument on the basis of South Korean experience in setting steel plant against the World Bank recommendations. She expressed newer concerns of mis-appropriation of natural resources at grassroot level and thereby propogating privatisation. She refuse conditionality of JNNURM on the basis of commodification of natural resource. She enlightened on the following facts:
(a) World Bank being a net recipient of countries, therefore loosing its relevance as a bank
(b) World Banks infiltration into bureaucracy – “Victory over minds of people which is most significant way of World Bank operation”.
(c) World Bank engages in grassroot works on the myth of a development paradigm
(d) World Bank encourages “funny” fiscal decentralisation where Panchayat directly borrow from World Bank thereby allowing private appropriation through leverage.
(e) World Bank control over development discourse causes one sided research.
Speaking on the debt and the WB, Lidy Nacpil of Jubilee South said that our assessment on (Illegitimacy of debt) was based on critical holistic, rigorous understanding of historical procedures which convert world order into a NEO-LIBERAL regime.
Her presentation essentially talked about the illegitimacy of debt and the procedures regarding illegitimate procedures. She stated that the debt service was very large as compared to the absolute debt amount. She also stated that Indian proportion of Debt per capita debt as a percentage of GDP were lower than Philippines, Nepal, etc. She pointed out the impact of debt on hindering and diverting development expenditure. She, while presenting a critical review of debt stated that we should understand debt historical, political and economic perspective. Also illegitimacy of debt is financing damage. Illegitimacy she points out is on the basis of:
(A) Human resource
(B) Justice & fairness
(C) Accountability
(D) Sovereignty
She also pointed out that the legal structures should be modified to bring out debt illegitimacy. "Debt is power to intervene in domestic politics and says government is also a part of it," she asserted.
Mr. Viond Raina's presentation focussed on the coherence of the WB, IMF and the like bodies with the governance, structure and policy making and implementation clubbed with legislation of the nation machinatingly trapped by the above-mentioned Bretton Woods bodies. This indeed is a Machiavellian nexus with the local sense governing bodies also, which means direct imperiealism of the mindset. This hydra-headed as to penetrate into the bureaucracy who are cultivated by the WB to behave and administer conveniencing the objectives and the agenda of the WB.
V Hanumantha Rao spoke about the Andhra Pradesh, state currently in the midst of a big agitation – govt been passing out hundreds of acres of land in name of It, industry infrastructure displacing thousands – agitation due to peoples anger where the vulnerabilities of the paucity of resources in state coffers, combined with a political scenario in flux and seeking acclaim as a modern state. The WB assisted irrigation sector interventions included reduction of Ration cards by 35%, increase in power tax, water charges, entrusting the charges of water maintenance to WUAs and privatisation of the industrial sector. Democratic structures were subverted as parallel structures were created, and a Vision 2020 document drafted that contained all the recommendations and guidelines. This document though never placed before the public or peoples representatives for debate continues to drive state policies and programmes.
The second session of the day focused on the urban poor and urban development and how both are affected by policies of the World Bank. Nitin from Shahar Vikas Manch spoke about the Mumbai Urban Transport Project, funded by the World Bank, which had displaced above 19,000 families in Mumbai. Resettlement has been in distant locations, upto 30 kms away; against the promised norm of within 2 kms. The resettlement sites lack basic amenities and are simply not affordable for a large majority of the urban poor. Simpreet Singh from NAPM added to this by revealing the Rs. 350 crore scam that was uncovered in the project.
Vinay Baindur of CASUMM critiqued the JNUNRM. This urban policy subsidized the private sector growth through mechanisms like PSP and PPP. He also spoke about the strong influence of WB and IFIs in Indian urban sector reforms since 1988 which has culminated into the JNNURM.
The 4-day event is being organised by a coalition of over 60 groups in collaboration with the JNU Students Union and Teachers Association. Activists, academicians, policy analysts and project affected communities are expected to present their analysis on the World Bank in over 26 sectors to an expert jury. The tribunal will run from today till 24 September. The opening jury members at today’s panel included eminent historian Romila Thapar, Former Supreme Court Justice P B Sawant, Former Maharastra High Court Justice Suresh, Former Planning Commission member S P Shukla, Scientist Meher Engineer, Former Water Secretary Ramaswamy Iyer, Economist Amit Bhaduri and Mexican Economist Alejandro Nadal.
World Bank officials, including the Banks India Country Director Isabel Guerrero, and Government of India representatives have also been invited to the tribunal and have been given time to respond to the depositions. World Bank representatives are expected present their point of view on the closing day (24 September).
Suresh Nautiyal (09868182289)
WBG IPT Secretariat (Media)
For more information contact Harsh Dobhal (9818569021)
www.worldbanktribunal.org
PRESS RELEASE
22 September 2007
Changing Role of the World Bank
New Delhi:
Today is the second day of the Independent Peoples Tribunal on the World Bank Group in India, which got underway at New Delhi yesterday at a packed auditorium at Jawaharlal Nehru University (JNU).
Addressing the new concerns regarding World Bank operations Dr. Prabhat Patnaik, (Deputy Chairman of Kerala Planning Commission) specified his point of view on the changing arena of operations of World Bank enforcing trade liberalisation. He further stated that this enforced trade liberalisation was perpetuating international division of labour, similar to that of the exploitative colonial form, but not exactly identical. "McNamara’s policy veils poverty alleviation and forces them to liberalise on the basis of comparative advantage and efficiency of trade," he stressed. Mr. Patnaik stated that the whole range of natural resources were privately appropriated which opened up the domain of natural resources for MNC and private appropriation. "Therefore, this is a form of ‘grabbing public and state property of accumulation through encroachment".
According to him, the World Bank operations have infiltrated both the Centre as well as the states, besides the grassroots operation of World Bank give them leverage to appropriate resources. Prof. Patnaik said that the JNNURM was a conditional package which gave a gross revenue loss of Rs. 7000-crore. “This is economic absurdity, therefore, greater state intervention and allocation on basis of social priority. This perpetuation of appropriation resulting in commodification is done with little money and major leverage".
He said that while the World Bank many have undergone a shift in emphasis, its basic thrust has not changed. "Trade liberalisation that continues to proportionate a division of labour that benefits the economic and political states nationally and globally". According to him, the World Bank is now committed to expand private control of land and natural resources. "Every where in the country we now witness the grabbing of common resources and spaces occupied by petty producers as well as the privatisation of the public sector".
Jayati Ghosh, who spoke on the issues related to the private sector, lamented that it was a matter of great concern how the World Bank was managing to be so powerful when so little of its money involved in India, less than 1% of the Indian Budget. "The bank is managing to be so powerful because it has infiltrated in Indian bureaucracy where it influences bureaucrats by organising capacity building, workshops etc. Many of our govt officials are now allowed to take a project with WB while on leave. This money, which is huge compared to Indian salaries, is tax free. Now WB is moving at the lower levels and infiltrating Zila Parishads and municipal corporations. While state governments exonerate themselves insisting on lack of funds, these zila parishads and municipal corporations are encouraged to take loans from WB and elsewhere. Thus these loans come with a number of conditionalities which finally push the agenda for privatisation", she asserted.
She added that the World Bank has increasingly been dealing with state governments who were in fiscal crisis where even a small amount of money appears to be substantial. According to her, the WB is not controlling the whole development discourse where research is essentially controlled by WB which in turn pushes its agenda. There is very little independent , objective, development research. A study by about 5-6 neo-liberal American researchers has found that WB promotes its own agenda through research and suppresses objective research. WB never put this study on its website despite its stated claims of transparency. "The essential issue today that needs to be looked into is how WB has changed and continues to change development discourse in India and elsewhere".
She also gave a critical scrutiny of the World Bank operation and stated that the enforcement of trade liberalisation should be removed. Arguments of trade liberalisation like comparative advantage cause stagnation in global division of labour and thus developed world would developed and developing world would stagnate. She refuted the comparative advantage argument on the basis of South Korean experience in setting steel plant against the World Bank recommendations. She expressed newer concerns of mis-appropriation of natural resources at grassroot level and thereby propogating privatisation. She refuse conditionality of JNNURM on the basis of commodification of natural resource. She enlightened on the following facts:
(a) World Bank being a net recipient of countries, therefore loosing its relevance as a bank
(b) World Banks infiltration into bureaucracy – “Victory over minds of people which is most significant way of World Bank operation”.
(c) World Bank engages in grassroot works on the myth of a development paradigm
(d) World Bank encourages “funny” fiscal decentralisation where Panchayat directly borrow from World Bank thereby allowing private appropriation through leverage.
(e) World Bank control over development discourse causes one sided research.
Speaking on the debt and the WB, Lidy Nacpil of Jubilee South said that our assessment on (Illegitimacy of debt) was based on critical holistic, rigorous understanding of historical procedures which convert world order into a NEO-LIBERAL regime.
Her presentation essentially talked about the illegitimacy of debt and the procedures regarding illegitimate procedures. She stated that the debt service was very large as compared to the absolute debt amount. She also stated that Indian proportion of Debt per capita debt as a percentage of GDP were lower than Philippines, Nepal, etc. She pointed out the impact of debt on hindering and diverting development expenditure. She, while presenting a critical review of debt stated that we should understand debt historical, political and economic perspective. Also illegitimacy of debt is financing damage. Illegitimacy she points out is on the basis of:
(A) Human resource
(B) Justice & fairness
(C) Accountability
(D) Sovereignty
She also pointed out that the legal structures should be modified to bring out debt illegitimacy. "Debt is power to intervene in domestic politics and says government is also a part of it," she asserted.
Mr. Viond Raina's presentation focussed on the coherence of the WB, IMF and the like bodies with the governance, structure and policy making and implementation clubbed with legislation of the nation machinatingly trapped by the above-mentioned Bretton Woods bodies. This indeed is a Machiavellian nexus with the local sense governing bodies also, which means direct imperiealism of the mindset. This hydra-headed as to penetrate into the bureaucracy who are cultivated by the WB to behave and administer conveniencing the objectives and the agenda of the WB.
V Hanumantha Rao spoke about the Andhra Pradesh, state currently in the midst of a big agitation – govt been passing out hundreds of acres of land in name of It, industry infrastructure displacing thousands – agitation due to peoples anger where the vulnerabilities of the paucity of resources in state coffers, combined with a political scenario in flux and seeking acclaim as a modern state. The WB assisted irrigation sector interventions included reduction of Ration cards by 35%, increase in power tax, water charges, entrusting the charges of water maintenance to WUAs and privatisation of the industrial sector. Democratic structures were subverted as parallel structures were created, and a Vision 2020 document drafted that contained all the recommendations and guidelines. This document though never placed before the public or peoples representatives for debate continues to drive state policies and programmes.
The second session of the day focused on the urban poor and urban development and how both are affected by policies of the World Bank. Nitin from Shahar Vikas Manch spoke about the Mumbai Urban Transport Project, funded by the World Bank, which had displaced above 19,000 families in Mumbai. Resettlement has been in distant locations, upto 30 kms away; against the promised norm of within 2 kms. The resettlement sites lack basic amenities and are simply not affordable for a large majority of the urban poor. Simpreet Singh from NAPM added to this by revealing the Rs. 350 crore scam that was uncovered in the project.
Vinay Baindur of CASUMM critiqued the JNUNRM. This urban policy subsidized the private sector growth through mechanisms like PSP and PPP. He also spoke about the strong influence of WB and IFIs in Indian urban sector reforms since 1988 which has culminated into the JNNURM.
The 4-day event is being organised by a coalition of over 60 groups in collaboration with the JNU Students Union and Teachers Association. Activists, academicians, policy analysts and project affected communities are expected to present their analysis on the World Bank in over 26 sectors to an expert jury. The tribunal will run from today till 24 September. The opening jury members at today’s panel included eminent historian Romila Thapar, Former Supreme Court Justice P B Sawant, Former Maharastra High Court Justice Suresh, Former Planning Commission member S P Shukla, Scientist Meher Engineer, Former Water Secretary Ramaswamy Iyer, Economist Amit Bhaduri and Mexican Economist Alejandro Nadal.
World Bank officials, including the Banks India Country Director Isabel Guerrero, and Government of India representatives have also been invited to the tribunal and have been given time to respond to the depositions. World Bank representatives are expected present their point of view on the closing day (24 September).
Suresh Nautiyal (09868182289)
WBG IPT Secretariat (Media)
For more information contact Harsh Dobhal (9818569021)
Independent People's Tribunal on the World Bank Group in India : Press Release 21 September
WORLD BANK GOES UNDER SCANNER AT PEOPLES TRIBUNAL
The Independent Peoples Tribunal on the World Bank Group in India got underway at New Delhi today at a packed auditorium at Jawaharlal Nehru University (JNU). The 4 day event is being organised by a coalition of over 60 groups in collaboration with the JNU Students Union and Teachers Association. Activists, academicians, policy analysts and project affected communities are expected to present their analysis on the World Bank in over 26 sectors to an expert jury. The tribunal will run from today till 24 September. The opening jury members at today’s panel included eminent historian Romila Thapar, Former Supreme Court Justice P B Sawant, Former Maharastra High Court Justice Suresh, Former Planning Commission member S P Shukla, Scientist Meher Engineer, Former Water Secretary Ramaswamy Iyer, Economist Amit Bhaduri and Mexican Economist Alejandro Nadal.
World Bank officials, including the Banks India Country Director Isabel Guerrero, and Government of India representatives have also been invited to the tribunal and have been given time to respond to the depositions. World Bank representatives are expected present their point of view on the closing day (24 September)
Questioning the supposed Bank developmental mandate of ‘eradicating poverty’, activist Smitu Kothari of Intercultural Resources argued that the Bank in fact functioned more like a commercial bank serving corporate interests. Kothari said, ‘The Bank is the world’s largest multilateral source of equity and loan financing to private enterprises and its loans to the private sector through the International Finance Corporation (IFC) in 2006 amounted to a massive US$ 8.3 billion. ‘The Bank claims that it is an apolitical institution but even a cursory look at its Governance conditionalities such as public sector reform, creating legislation to facilitate the private sector shows that it plays a profoundly political role in the country’, he added.
Professor Arun Kumar from JNU said that due to World Bank and IMF structural adjustment conditionalities India had to undergo a complete policy overhaul after 1991. As evidence, he presented several national legislations that were overhauled after the structural adjustment programmes of the Bank; such as the RBI Act, introduction of Value Added Tax (VAT) in Andhra Pradesh and the revision of the Coal Nationalization Act. As further evidence of the influence of the Bank on domestic policy he showed how an executive summary of a World Bank document in 1990 mentioned the need for a 22% devaluation of the Indian rupee. ‘In 1991 the then Finance Minister Manmohan Singh effected exactly a 22% devaluation of the rupee.
In his deposition to the jury Supreme Court Advocate Prashant Bhushan presented evidence on how, since 1991, most of the key influential economic policy makers in India, including members of the planning commission, secretaries of the Finance Ministry and Economic Advisors to the Government have been people who have had stints at the World Bank. ‘They have moved seamlessly between the World Bank and the Government of India as if the latter were just a division of the former’, he said. Bhushan singled out the case of the current czar of economic policy Montek Singh Ahluwalia who spent the first 11 years of his career at the World Bank. Since then he has been Commerce Secretary, Finance Secretary and now Deputy Chairman of the Planning Commission. ‘There are several dozen such instances and it should be of little surprise that the Bank has been able to easily impose its ideology and policies in India’, added Bhushan.
Shripad Dharamadhikari, Coordinator of Manthan Adhyayan Kendra spoke about how the Bank was looking at being a ‘politically realistic knowledge provider’ in India. This was being done through thematic and sectoral studies called AAA – Analytical and Advisory Activities – in which it is funding studies on Land, Water and Agriculture which were being used as reference documents to push its policies.
In a written deposition Professor Michael Goldman of the University of Minnesota posed the question of whose interests the Bank served. Goldman said that Northern firms continue to win a majority of the foreign procurement contracts awarded. ‘In 2003 a startlingly high 45 percent was channeled to firms in the big five countries (USA, UK, Japan, Germany and France)’, said Goldman.
Professor Anil Sadgopal traced the policy framework for education in the country and showed how the target for universalisation of elementary education was constantly shifted following the intervention of the World Bank. ‘The demarcation of certain districts in Madhya Pradesh as exclusively World Bank districts for the implementation of its DPEP programme was a gross violation of the sovereignty of the state’, he said.
The days next sessions of the tribunal will cover the Banks interventions in Water, Health and its impacts on Human Rights. Speakers who will depose on Day 2 of the tribunal include Narmada Bachao Andolan activist Medha Patkar (on Urban Development), Magsayay Awardee Arvind Kejriwal (on Delhi Water Privatisation) and Economist Jayati Ghosh (on private sector and the World Bank).
Suresh Nautiyal,
WBG IPT Secretariat (Media)
For more information contact Harsh Dobhal (9818569021)
The Independent Peoples Tribunal on the World Bank Group in India got underway at New Delhi today at a packed auditorium at Jawaharlal Nehru University (JNU). The 4 day event is being organised by a coalition of over 60 groups in collaboration with the JNU Students Union and Teachers Association. Activists, academicians, policy analysts and project affected communities are expected to present their analysis on the World Bank in over 26 sectors to an expert jury. The tribunal will run from today till 24 September. The opening jury members at today’s panel included eminent historian Romila Thapar, Former Supreme Court Justice P B Sawant, Former Maharastra High Court Justice Suresh, Former Planning Commission member S P Shukla, Scientist Meher Engineer, Former Water Secretary Ramaswamy Iyer, Economist Amit Bhaduri and Mexican Economist Alejandro Nadal.
World Bank officials, including the Banks India Country Director Isabel Guerrero, and Government of India representatives have also been invited to the tribunal and have been given time to respond to the depositions. World Bank representatives are expected present their point of view on the closing day (24 September)
Questioning the supposed Bank developmental mandate of ‘eradicating poverty’, activist Smitu Kothari of Intercultural Resources argued that the Bank in fact functioned more like a commercial bank serving corporate interests. Kothari said, ‘The Bank is the world’s largest multilateral source of equity and loan financing to private enterprises and its loans to the private sector through the International Finance Corporation (IFC) in 2006 amounted to a massive US$ 8.3 billion. ‘The Bank claims that it is an apolitical institution but even a cursory look at its Governance conditionalities such as public sector reform, creating legislation to facilitate the private sector shows that it plays a profoundly political role in the country’, he added.
Professor Arun Kumar from JNU said that due to World Bank and IMF structural adjustment conditionalities India had to undergo a complete policy overhaul after 1991. As evidence, he presented several national legislations that were overhauled after the structural adjustment programmes of the Bank; such as the RBI Act, introduction of Value Added Tax (VAT) in Andhra Pradesh and the revision of the Coal Nationalization Act. As further evidence of the influence of the Bank on domestic policy he showed how an executive summary of a World Bank document in 1990 mentioned the need for a 22% devaluation of the Indian rupee. ‘In 1991 the then Finance Minister Manmohan Singh effected exactly a 22% devaluation of the rupee.
In his deposition to the jury Supreme Court Advocate Prashant Bhushan presented evidence on how, since 1991, most of the key influential economic policy makers in India, including members of the planning commission, secretaries of the Finance Ministry and Economic Advisors to the Government have been people who have had stints at the World Bank. ‘They have moved seamlessly between the World Bank and the Government of India as if the latter were just a division of the former’, he said. Bhushan singled out the case of the current czar of economic policy Montek Singh Ahluwalia who spent the first 11 years of his career at the World Bank. Since then he has been Commerce Secretary, Finance Secretary and now Deputy Chairman of the Planning Commission. ‘There are several dozen such instances and it should be of little surprise that the Bank has been able to easily impose its ideology and policies in India’, added Bhushan.
Shripad Dharamadhikari, Coordinator of Manthan Adhyayan Kendra spoke about how the Bank was looking at being a ‘politically realistic knowledge provider’ in India. This was being done through thematic and sectoral studies called AAA – Analytical and Advisory Activities – in which it is funding studies on Land, Water and Agriculture which were being used as reference documents to push its policies.
In a written deposition Professor Michael Goldman of the University of Minnesota posed the question of whose interests the Bank served. Goldman said that Northern firms continue to win a majority of the foreign procurement contracts awarded. ‘In 2003 a startlingly high 45 percent was channeled to firms in the big five countries (USA, UK, Japan, Germany and France)’, said Goldman.
Professor Anil Sadgopal traced the policy framework for education in the country and showed how the target for universalisation of elementary education was constantly shifted following the intervention of the World Bank. ‘The demarcation of certain districts in Madhya Pradesh as exclusively World Bank districts for the implementation of its DPEP programme was a gross violation of the sovereignty of the state’, he said.
The days next sessions of the tribunal will cover the Banks interventions in Water, Health and its impacts on Human Rights. Speakers who will depose on Day 2 of the tribunal include Narmada Bachao Andolan activist Medha Patkar (on Urban Development), Magsayay Awardee Arvind Kejriwal (on Delhi Water Privatisation) and Economist Jayati Ghosh (on private sector and the World Bank).
Suresh Nautiyal,
WBG IPT Secretariat (Media)
For more information contact Harsh Dobhal (9818569021)
Thursday, September 20, 2007
Independent People's Tribunal on the World Bank in India : Press Release
PRESS RELEASE
500 academics, activists and experts on the World Bank including experts from abroad such as Alejandro Nadal, Professor, Colejio de Mexico, and Bruce Rich, Executive Director, will gather at JNU (21 – 24 September) at the “Independent People’s Tribunal on the World Bank Group in India”, and will hear experts and victims give testimonies on the role of World Bank in India.
The Jury will consist of eminent persons including Mahasweta Devi, Arundati Roy, Justice P.B. Sawant, Aruna Roy and 11 others. Attached is the programme.
Given below are preliminary notes on two of the issues which will form part of the deliberations. Note 1 is on sample contracts between the World Bank and State Governments. Note 2 is on Government Officials serving at the World Bank.
Note 1
SAMPLE WORLD BANK AGREEMENTS WITH STATE GOVERNMENTS SHOWING HOW THE WORLD BANK FORCED STATE GOVERNMENTS AS A CONDITIONALITY FOR LOANS TO AGREE TO CHANGING LAWS, PRIVATISING, REDUCING THE PUBLIC SECTOR ETC.
LOAN AGREEMENTS FOR ORISSA’S HEALTH SYSTEM
1. A condition of a loan to Orissa to make changes to its health system was that Orissa would continue to follow a policy of ‘user pays’ and more importantly, that it increase its charges. Such a measure invariably affected the poorest members of society and is in direct contrast with the World Bank’s stated aim to alleviate poverty. In this case, amongst many others, its policies hit the poorest the hardest.
“Orissa shall continue to implement a program for collecting user charges at district hospitals, such program to focus, inter alia, on: (a) strengthening collection of existing user charges and management arrangements; (b) implementing revised user charges in a phased manner within six months after completion of the renovation and extension of each hospital and adoption of staffing and technical norms at such hospital…”
LOAN AGREEMENT WITH ORISSA ON POWER
In the Orissa Power Restructuring Project of 1996 the World Bank also mandated privatization. In the loan agreement for that Project the Bank specified:
Orissa shall, with the participation of GRIDCO and OHPC [the publicly-owned Orissa power distribution companies]:
(a) offer a part of its equity in GRIDCO and OHPC for sale to the public under terms and conditions satisfactory to the Bank with the objective of divesting such equity in accordance with a program and timetable satisfactory to the Bank;
. . .
If the Government of Orissa was unable to sell the company at its asking price it was required to revise the conditions of its sale to make it more attractive for sale:
(c) where no tenders are received in response to such offer or those that are received are not deemed responsive by Orissa, revise the terms and conditions of such offer in a manner satisfactory to the Bank and take such other steps which shall, without prejudice to the interests of Orissa, GRIDCO and OHPC, be adequate, in the view of the Bank, to making such offers attractive for acceptance by the public.
LOAN AGREEMENT FOR ANDHRA PRADESH ON WATER PRIVATISATION
2. In return for a World Bank loan to Andhra Pradesh, the World Bank stated in its loan agreements that Andhra Pradesh would introduce a charge system for water. Again, it is evident that World Bank’s policies adversely affect the poor.
“Andhra Pradesh shall implement a system for water charge collection on a volumetric basis by WUAs on at least a pilot basis (i.e. covering about 40,000 ha) by March 31, 2001”.
In addition to introducing a ‘user pays’ system in which the government of Andhra Pradesh could not be held democratically accountable, the World Bank also made it a condition of the loan that Andhra Pradesh would cut jobs in the state government and reduce salaries of the state government’s employees.
“Andhra Pradesh shall take all the necessary measures, satisfactory to the Association and the Bank in order:
(c) to reduce employment in the state government (excluding primary education) by 1.9 percent each Fiscal Year beginning with FY 1998-99;
(d) to reduce the ratio of salary to GSDP from the estimated 5.3 percent in FY 1997-98 to no higher than 5.0 percent in FY 2002-03”
LOAN AGREEMENT WITH HARYANA ON POWER
The Haryana Power Sector Restructuring Project was a 1998 agreement between the World Bank and the Government of India and Government of Haryana aimed at restructuring and upgrading that Haryana power system. One of the ultimate goals of this restructuring was privatizing the distribution of power in Haryana. This is made clear by the conditions of subsequent loans for this project as outlined in the project’s appraisal document:
The Second Haryana Power Sector Restructuring Project (APL2; indicative amount of $ 150 million) would be considered when . . . The Government of Haryana has:
. . .
* achieved satisfactory progress in privatizing one of the distribution companies (East Zone) as a joint venture with private majority ownership; . . .
. . .
The Third Haryana Power Sector Restructuring Project (APL3) (indicative amount: $ 200 million) would be considered when . . . The Government of Haryana has:
* privatized at least two-thirds of the distribution system, e.g., at least about two-thirds of the electricity is distributed by private companies, licensed by the Regulatory Commission;
. . .
One or two additional loans (APL4 and APL5) (tentative total amount: $ 190 million) would be considered when:
* the distribution business has been fully privatized;
. . .
LOAN AGREEMENT WITH MAHARASHTRA ON WATER
The World Bank continues to try to dictate its own market-driven ideology to India even today. In 2006, the Government of Maharashtra and World Bank entered into an agreement for a loan to reform the Maharashtra water supply system under the Maharashtra Water Sector Improvement Project. The loan conditions as outlined in the Project Appraisal Document included that the Government of Maharashtra shall:
. . .
(vi) start implementation of bulk water supply and volumetric charging of irrigation water to WUAs as per their entitlement in six selected pilot schemes by no later than December 31, 2006.
(vii) rationalize water charges including irrigation charges to meet full O&M costs by no later than March 31, 2007.
. . .
Note 2
NOTE ON SENIOR GOVERNMENT OFFICIALS WHO WHILE SERVING GOI WENT ON DEPUTATION TO THE WORLD BANK ON HUGE SALARIES AND PENSIONS AND THEREAFTER RETURNED TO GOI AND ALTERED POLICIES OF GOVERNMENT IN ACCORDANCE WITH THE WORLD BANK POLICIES
The Revolving Door of the World Bank
Suborning policy and decision makers by its pocketbook
By Prashant Bhushan
Joseph Stiglitz, the Nobel laureate and former Chief Economist of the World Bank in his frank critique of the World Bank and IMF, “Globalisation and its discontents”, notes that “The institutions are dominated not just by the wealthiest industrial countries but also by commercial and financial interests in those countries, and the policies of the institutions naturally reflect this”. This, he says, happens because the World Bank and other Multi-lateral financial institutions are controlled by the wealthy countries. For the WB/IMF, these countries are represented by their Finance Ministers and Central Bank Governors. He goes on to say, “The Finance Ministers and Central Bank governors typically have close ties with the financial community; they come from financial firms, and after their period in government service, that is where they return. These individuals naturally see the world through the eyes of the financial community. The decisions of any institution naturally reflect the perspectives and interests of those who make the decisions; not surprisingly, the policies of the international financial institutions are all too often closely aligned with the commercial and financial interests of those in the advanced industrial countries.”
Though an insider with impeccable credentials and credibility like Stiglitz has laid bare this fact which was known by most people much earlier, yet it is obvious that the government of India’s policies regarding the revolving door between the government and the World Bank/IMF are totally oblivious to this. How else would one explain the fact that for much of the last 20 years, and particularly since 1991, many if not most of the top economic policy makers including members of the planning commission, secretaries of the Finance Ministry and Governors of the Reserve Bank have been staffers of the World Bank/IMF. They have moved smoothly and seamlessly between the World Bank/IMF and the government of India, as if the government of India were just a division of the World Bank/IMF.
Since the mid 80s it has become common to find World Bank staffers occupying key policy making positions in the Government of India. Starting with Montek Singh Ahluwalia, and Bimal Jalan, the vast majority of the key officials of the Finance Ministry and the Reserve Bank have moved seamlessly back and forth between the World Bank/IMF and the Government of India. They include such influential policy makers and Finance Secretaries such as Shankar Acharya, who like Montek started with the World Bank in the 70s and then again like him joined the government as Economic advisor in 1985. In 1990 he was back at the World Bank as Chief of the Public Economic Division till 1993, when he was appointed Chief Economic Advisor to the Government of India. He was thereafter appointed to the Board of SEBI, the EXIM Bank and various other policy making bodies.
We then have Rakesh Mohan who also initially worked with the World Bank (1976-80, 1983-86) and later became Economic Advisor to the Ministry of Industry, Government of India. He then served in top positions of many policy making bodies of the government including Deputy governor of the Reserve Bank, Secretary of the Department of Economic affairs etc.
We have Parthasarthy Shome who worked at the IMF for most of the time between 1983 and 2004. In between he was called in as Chairman, Advisory group on Taxation for the 9th 5 year plan, then as Chairman of the Advisory group on Tax policy, and most recently as Special advisor to the Finance Minister (2004-2007).
We also have other persons like Ashok Lahiri, who worked for many years in the IMF before being brought in to the government as Chief Economic Advisor and then sent to the ADB as Executive Director in 2007. These are only some examples of persons who started their careers with the Bank/IMF and were brought into influential policy making positions of the Government, then allowed to move back and forth between the bank and the government as if the Government of India were just a division of the Bank/IMF). Such examples could be multiplied endlessly.
This revolving door with the Bank/IMF and the filling of most economic policy making positions of the government by these Bank staffers has allowed the bank to impose its ideology and policies on India. It has not only ensured that these policy makers are schooled in the World Bank school of economics, by allowing them to move back and forth but also ensured that the Bank/IMF retains a complete stronghold on these persons wherein they step out of line only at the cost of losing their lucrative jobs/assignments with the Bank/IMF.
In fact, key officials of the Finance Ministry and other important Ministries dealing with World Bank proposals and projects have been freely allowed to negotiate and take up jobs at the World Bank while in service and immediately after retirement. Many of them are deputed by the Government of India. These deputations also work through the network of Old boys of the World Bank occupying key positions in the government of India. Apart from deputations, there are hosts of other jobs, consultancies, assignments, even travel grants and huge honoraria paid for attending meetings of the World Bank and associated agencies. Thus, R.A. Mashelkar as DG CSIR went on at least 50 trips abroad during his tenure which were paid for by the Bank or the World Intellectual Property Organisation. For most of these trips, he was paid an honorarium of around 500 British pounds a day. As a result of this, he got more as honoraria for these trips than he got as salary from the Government of India. As DG CSIR, he presided over several policy-making committees and advised the government to (for example) amend the Patents Act in line with the needs of multinational corporations of the West. He says that he honestly believes that it is in the best interest of India as well. But, when one knows that juicy junkets, honoraria and assignments depend on whether he falls in line with the Bank and similar agencies, it is easy to convince yourself of the righteousness of the course that is likely to land you with these juicy assignments.
The officials are selected eventually by the Bank and their salaries and honoraria are decided by them, depending on their level and “utility” to the Bank. However, in all cases they are several times, usually ten times or more than, the salaries they get in India. This creates an enormous incentive for the Officials to seek World Bank jobs, assignments, consultancies and even travel grants. Since it is obvious that one is more likely to get these if one toes the World Bank line, it creates an enormous incentive for Officials to fall in line. This is particularly so for “honest” officials who see these jobs and assignments as the only legitimate way of doubling or trebling their savings in a very short while.
The Foreign Contribution Regulation Act which makes it an offence for a government official to accept any material contribution from a foreign agency also exempts the World Bank and other “United Nations agencies”. This has further smoothened the path of those seeking World Bank/IMF/ADB jobs, assignments and travel grants.
This is why there is no critical evaluation of World Bank policies and projects at the government level and they are all virtually accepted uncritically and pushed through. All this has had an enormously deforming effect on policymaking, particularly economic policymaking in the Government of India. It would not be incorrect to say that it is the World Bank, which runs the Reserve Bank, the Finance Ministry and other economic policy making bodies of this country.
For further details contact: secretariat@worldbanktribunal.org
98185 69201, 98681 82289
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