The Ecologist More than a third of all aid projects funded by the World Bank's projects fail, according to an internal Bank report leaked to The Ecologist. According to the report, the share of "problem projects" has increased from 10% on average over the period 1979-1981 to 17% over the period 1989-1991, whilst the share of "unsuccessful" projects has lept from 13.1% to 35% Q the highest recorded rate of failure in the Bank's history. The Bank has long been criticised for the environmental and social damage caused by its projects but has always maintained that such damage is outweighed by the economic benefits. The report shatters that myth. Far from assisting Third World countries, the Bank is adding to their debt through mismanagement. Borrowing countries have to repay the loans they take out, even if the projects are an economic failure. The report criticises management practices at the Bank, noting that "technical output or proficiency has declined markedly in supervision" and that there is "a systematic and growing bias in favour of optimistic rate of return expectations at appraisal." The author of the report, W.A.Wapenhans of the Bank's Portfolio Management Task Force Force, says the failure rate has been increased by the package of free market reforms known as "structural adjustment", which have been imposed on Third World countries supposedly to create greater economic efficiency.  |
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