Despite a change in its public stance on social and environmental issues, the World Bank is still under fire. When its president, Barber Conable, visited Australia recently Damien Kingsbury sought his response to the critics.

AS ITS NAME PARTIALLY IMPLIES, the World Bank is the largest and most influential development bank in the world. Established after the second world war, the bank was to foster economic &emdash; and, consequently, social and political &emdash; development in poorer countries. Barber Conabie was appointed by President Reagan in 1986, at a time when the bank was under intense criticism. His initial public statements on bank policies suggested a change of course for an organisation that has often appeared overbearing and committed to conservative economic ideology. Over two years later, the bank's actions appear to be at odds with its public policies.

Mr Conabie was in Canberra recently, publicly to encourage and privately to castigate the federal government over its failure to meet its full capital subscription rights to the World Bank's subsidiary, the International Bank for Reconstruction and Development. Last financial year Australia provided 1.73 per cent of the bank's $14.7 bill ion lending program; this year it has been slow to commit its full quota of funds. In reducing its contribution, the Australian government has cited concern over the controversial nature of many World Bank projects. Reduced funding, however, fits in well with the government's overall spending reductions.

Australia's ambiguous reasoning aside, the bank is certainly vulnerable to criticism. Its record in meeting its objectives &emdash; alleviating poverty, protecting the environment and promoting education, health and women's rights&emdash;is at best patchy. The bank was, for example, involved in Indonesia's controversial transmigration program, under which Indonesians from overpopulated cities are moved to less populated areas like Irian Jaya. A series of incidents attests to local opposition to the program. In Sumatra early this year Amnesty International reported that more than thirty people were killed by soldiers during a disturbance blamed by the Indonesian government on fundamentalist Muslims -but attributed by Amnesty to villagers protesting against forcible relocation.

In Mr Conable's view the criticism is a result of the fact that the program 'was not carefully implemented in every case'. The bank, he says, has now encouraged the Indonesian government to consolidate past moves rather than embarking on new migrations. 'Greater care has to be taken with respect to the indigenous peoples displaced by this transmigration.' But what about the World Bank's responsibility to ensure that projects operate satisfactorily? 'We believe we have that responsibility and we believe that we generally acquit it. However, experience is a cumulative think. The bank's involvement in the program continues.

Undoubtedly one of the most infamous projects in which the World Bank has been involved is the Polonoroeste scheme in western Brazil, part of that country's agricultural push into the Amazon rainforest. Having agreed to participate in 1983, the bank pulled out when environmental guidelines were ignored by the Brazilian government. But by 1985 the bank was back in the project and left again only after it had resurfaced the main highway through the region. Since then the Brazilian government has extended the highway further into this ecologically sensitive region, clearing an area the size of Britain.

Large numbers of local villagers were displaced. And an organiser with the Brazilian Rubber rappers motion, Chico Mendes, who led the local opposition that threatened the interests of large landholders, was assassinated on 22 December last year (see AS, Marcil). The World Bank became involved over the protestation of its own technical staff. It is now reported to be assembling a $US 200 million loan to further the project. Despite this, Mr Conable says that the bank is no longer involved in the scheme and should not be held responsible for its social and environmental impact.

ONE ISSUE THAT WORRIES OB- servers of the bank's activities is an apparent gap between the official policies promoted by the president and their implementation by senior staff. The conflict appears to exist right up to senior levels. In a BBC interview in 1987, for example, vice-president David Hopper said: 'Let's face it, you can't have development without people getting hurt.' Barber Conable responds that if he found 'a member of staff not committed to the goals of the World Bank he will not remain a member of my staff. Yet despite his strong statements on the bank's concern about the social impact of its programs, David Hopper remains vice-president.

Partly the conflict arises from the bank's increasing involvement in macroeconomic 'reform' of the countries to which it lends. While the bank wants to ensure that its funds are being used on projects that can succeed, its decision on what constitutes a suitable economic environment for success is unilateral. Because it relies heavily on private funding sources and is itself aligned with the anti-interventionist school of economic thought, a suitable economy is one that conforms with the principles of deregulated capitalism.

Mr Conable concedes that the economic 'adjustment' demanded of many debtor countries has the immediate effect of making poor people 'increasingly poor'. There is an obvious clash with the goal of alleviating poverty, especially in countries where a reduction in median income means the difference between basic sustenance and malnutrition or starvation.

Indeed, there is a large body of opinion which argues that development based solely on economic growth has more to do with establishing stable clients for Western economies than enhancing the lives of the local people. 'What we are trying to do,' argues Mr Conable, ' is to put a human face on our adjustment policies to include social components that will ensure that the poor are targeted by correctives and palliatives that will ensure they do not carry the full burden of adjustment. It's something we've been stressing much more lately than we did several years ago. We believe that it's possible to cushion the poor to some extent.'

Despite this, the 6000 staff and 1500 consultants employed by the World Bank, the people who, with the four autonomous vice-presidents actually make the day to day decisions, have been slow to consider other than narrow, laissez-faire economic imperatives. In recent months, to illustrate this point, the bank and the International Monetary Fund have clashed over which organisation has responsibility for providing further loans and guiding macroeconomic 'adjustment' in client countries. That the World Bank should be competing with the IMF for the right to control Third World economies suggests that its overriding goal is to fit these countries into an international division of economic roles and power that suits its Western benefactors.

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