THAILAND: 1988

In the evening of November 23, 1988, sections of the Khao Luang mountain in southern Thailand began to shift in their precarious perch on the bedrock below, saturated by the previous three days rain, the thin mountain soils liquified slowly until suddenly, they rushed down into the valley of Tambon Kratoon.

In the village of Ban Kratoon Tai below, the villagers who tilled rice fields in the lowlands, were waiting patiently for the rains to end. They had lived in this valley for decades and the last thing they were expecting was a landslide of catastrophic proportions. The surge of trees, logs, debris and water battered down their homes, their schools and their temples. When the flood waters subside, the grief stricken villagers discovered that 100 of their number have died.

Across Thailand, 371 people died that day, one million acres of crops were destroyed and 137,000 domestic animals were killed - a total of US$300 million in damage. The reason for the floods? Uncontrolled logging for timber and plans to replace the native forests with rubber trees - financed partly by an institution thousands of miles away across the Pacific ocean, the Washington DC based World Bank.

INDIA: 1993

On 19 November 1993, the Narmada Bachao Andolan (Save the Narmada Movement) in Baroda, western India, sent out an urgent press release. Headlined, "TRIBAL YOUTH DEAD, THREE VILLAGERS SERIOUSLY WOUNDED," it went on to say:

"A 15-year-old boy, Raimal Punya Vasave, from Surung village, Maharashtra, has been shot dead by the police while opposing attempts to survey the Maharashtra submergence zone (of the floodwaters created by the Narmada dam that is currently being built). One woman, Jugiben from Domkhedi village, was shot in the thigh, and two men were seriously wounded. Raimal Punya Vasave was hit by 3 bullets in the arm, side and neck, and died instantly.

In today's fatal incident a group of villagers, led by the NBA activist Milind, told a group of police and surveyors to go away and said that they would not allow any surveying to be done. The policeman in charge then pointed his gun at the activist's chest and then "absolutely unprovoked and without warning" the other police started firing at the crowd. The NBA believe that around 50 shots were fired."

Shripad Dharmadhikary, spokesperson for the NBA, told journalists over the telephone: "This was a blatant attempt to terrorise the people into accepting the dam. The dam authorities and their foreign backers such as the World Bank and British Overseas Development Authority must share the responsibility for this murderous attack."

COLOMBIA: SOMETIME IN THE NEAR FUTURE

The Pacific region of Colombia traps the warm trade winds from the ocean in the Cordillera Occidental, the western range of the Colombian Andes, to create a hot and humid climate that supports verdant tropical rainforests, marshes, mangrove swamps, rivers and one of the world's greatest varieties of biodiversity. The Cordillera Occidental also seals this land off from the coastal trading regions but there are plans that may soon change this. On 23 May 1992, the Colombian government of President Cesar Graviria Trujillo, launched the Plan Pacifico (the second of its kind) which proposed to punch a road into this region and join the town of Pereira in the mountains with a new superport to be built in Nuqui on Tribuga bay. The effect of this road will be to turn the forests into timber exports that will bring in cash dollars but destroy the tens of thousands of species that grow naturally in these mountains. Worst affected by this will be the 90% of the region's population of 900,000 who are black. They depend on these forests for their subsistence survival. Also threatened are the indigenous communities of the Embera and the Waunana. Already logging concessions near the Atrato river has caused the eviction of thousands of Embera people.

Gravira has sent the plan for possible funding from several international institutions. Among them is the World Bank, the funders of the dam on the Narmada river and the rubber plantation projects in southern Thailand.

WHAT IS THE WORLD BANK?

The World Bank and its sister organisation, the International Monetary Fund, are the largest funders of development plans in the so-called Third World of Africa, Asia and Latin America as well as the newly capitalistic countries of eastern Europe and the former Soviet Union.

They were founded fifty years ago this July in Bretton Woods, a small mountain town in New Hampshire, by government representatives from 44 countries. Invited there by US president Franklin D Roosevelt, they travelled to Bretton Woods in two specially chartered trains, to be hosted for three weeks at the Hotel Washington by Henry Morgenthau, then US Secretary of the Treasury, to create "a dynamic world economy in which the peoples of every nation will be able to realise their potentials in peace ... and enjoy increasingly, the fruits of material progress on an earth infinitely blessed with natural richness."

The year was 1944. Most of Europe lay in ruins after the devastating second world war and the men (and a few women) who gathered in Bretton Woods resolved to create the new institutions to mastermind the reconstruction of Europe and the fulfillment of Morgenthau's vision.

In September this year, the president of the World Bank, Lewis T Preston, will fly first class to Madrid, Spain, to celebrate a half century of that vision. He will be met by the finance ministers of almost every nation in the world and they will spend several million dollars in an orgy of feasting that will last a week.

But for Narayan Tadvi, the headman of the village of Manibeli, in India, just miles from the Sardar Sarovar dam that Vasave died protesting, the celebration of that vision will be a little different. This past year, he spent most of the fall, clearing up his house from ten feet of mud that filled his house when the dam caused his village to be flooded. He stayed there as long as possible when the waters rose, with his wife and four daughters, the youngest of whom was just weeks old, trying to protect his property. This year he expects to do the same. And this year, the World Bank itself admits, like Tadvi, another 600,000 people, the population of the city of San Francisco, will have face resettlement from their homes because of World Bank projects.

THE WORLD BANK IN ITS OWN WORDS

The World Bank is comprised of four agencies run by their member countries who put up capital to lend or guarantee loans to other member countries and the private sector.

The first of these institutions is the International Bank for Reconstruction and Development, (which had 156 member countries in early 1992) which now makes loans to Southern countries and the former Soviet bloc "to help reduce poverty and to finance investments that contribute to economic growth. Investments include roads, power plants, schools, and irrigation networks, as well as activities like agricultural extension services, training for teachers and nutrition-improvement programs for children and pregnant women.

Some World Bank loans finance changes in the structure of countries' economies to make them more stable, efficient and market oriented. The World Bank also provides "technical assistance," or expert advice, to help governments make specific sectors of their economies more efficient and relevant to national development goals." Its loans totalled US$16.4 billion in 1991, one of the biggest "aid" donors to Southern countries alongside the "aid" from the US and Japan. Its three affiliates are the IDA, the International Finance Corporation (IFC), and the Multilateral Investment Guarantee Agency (MIGA).

The IFC was set up in 1956 and now has 145 members. It lends directly to the private sector and can even buy shares in companies. It also plays a role in developing stock markets in Southern countries. Its 1991 loans totalled US$2.9 billion. The IDA was set up in 1960 and now has 140 members. It makes interest free loans to the "poorest" countries, which have to be paid back over 35 to 40 years after a 10 year grace period. Its 1991 loans totalled US$6.3 billion for countries with a per capita income of US$1,195 or less. MIGA was set up in 1988 and has 78 members. It spent US$922 million in 1991 to protect investors againstnationalisation or war that commercial insurers refuse to cover.

Under its charter (known as "the articles of agreement") of the World Bank, countries are represented by Bank governers (either the finance minister or the governor of the country's central bank) who vote on loans according to the amount of money they have put into the Bank, which is pre-determined by agreement. The biggest contributors are the US (18.02%), Japan (7.82%), Germany (6.04%), France and Britain (5.79% each). Activists commonly call this system the "one dollar, one vote" system. In addition, according to longstanding custom, the Bank's president is nominated by the US and is a US citizen. Currently the Bank's president is Lewis Preston, a former US investment banker.

ENVIRONMENTAL IMPACT

The money that the donors put into the World Bank is lent out to other countries. A high percentage of the loans and credits are allocated to environmentally sensitive areas such as agriculture, forestry, dams and irrigation. In 1983, half the project loans totalling US$22 billion were directed to these sectors. Although as a percentage of total economic investment these loans account for only a small fraction, in terms of the impact on natural resource systems they are very significant. The Bank's lending also has a multiplier effect in determining the development patterns and resource use in Southern countries because they require borrowing governments to demonstrate commitment to projects by pledging so-called "counterpart" funds and making complementary investments of their own.

Over and above that, it publishes sectoral policy papers such as in the field of energy or agriculture and country economic memoranda which make suggestions to each country on how to do their work. Its greatest leverage in this field is through its structural adjustment and sector loans which are given for long-term economic policy and not simply against single projects. These loans are explicitly intended to create long-term institutional changes such as privatisation of national monopolies and the adoption of a strategy of export-led growth, both of which strongly influence the pattern of control over and utilisation of natural resources.

This Bank directed development of Southern countries has changed their natural resource management strategies in drastic ways. Rapid growth of export-oriented resource use has led countries into a debt trap which has been accompanied by ecological degradation.

Take for example, Africa, the continent with the most serious ecological crises. In 1983 there were no African countries among the large debtors. Today, the external debt of 42 sub-Saharan economies is in the order of US$130-135 billion. The case of Sudan is illustrative of what is happening in Africa. A few years ago, agencies like the FAO viewed Sudan as having the greatest agriculture potential, especially for export crops. Sudan did "develop" its agriculture with heavy borrowing. Today, Sudan has a US$78 million proposal for emergency aid and US$213 million in interest due after rescheduling on US$10 billion external debt. Thousands of Africans are dying because development first destroyed their sustenance base and paying the debts for that development is further depriving them of their entitlement to survival. When the whole economy has virtually collapsed, Africa's ecological regeneration is surely a far cry.

The development process backed by the Bank has moved from one disaster to another because of its fixation with the market. Its recommendations in the 1960s for heavy investment in large dams, in roads and railways; in providing heavy equipment for logging operations and open cast mining, in financing the harbours for shipping etc. were all intended to provide the infrastructural framework for providing the world market with goods. Unfortunately, the same solutions were applied across the board to all Southern countries so they all ended up competing with each other and destroying each others markets.

AIDING THE NORTH

Why does the Bank insist on export growth if this has been shown not to work and to be environmentally destructive also? Well, the major thrust of the Bank's new structural adjustment programmes is really to open domestic economies to the multinational corporations by providing them with access to domestic resources, through direct investment with limited or no control by domestic governments,or through the transfer of capital in the form of debt servicing, lower commodity prices and capital flight utilising as channels liberal exchange rate mechanisms. In several ways, the environment suffers through over-exploitation of resources or neglect. Poor forest people lose their land rights and their diversity, etc. In hardly any case does the Bank promote income distribution through asset redistribution to the poor. In fact, structural adjustment programmes have exacerbated income inequality in most places. In most cases, the poor lose jobs, land, forest incomes, and social safety nets. In fact often the Bank's export financing is not actually intended to increase income in Southern countries but to promote Northern import business. The Bank's own statistics show that in 1992, 55 percent of the Bank's net disbursements of US$4.5 billion through its International Development Association arm which is supposed to give money to the poorest countries in the world actually went to the world's ten richest nations. Of these countries Britain heads the league table of rich countries receiving IDA money. For example in 1992, US$ 285 million dollars worth of IDA funds were given to Britain in the form of contracts. Sudan, by contrast, received US$16 million.

DAMMED BY ITS OWN REVIEWERS

Activists are not the only critics of the World Bank's policies. The World Bank itself says that many of its projects are dismal failures. For example in mid 1992 a report was prepared by a special high level Portfolio Management Taskforce to report directly to its president, Lewis Preston himself. Willi Wapenhans, the chairman of the taskforce, submitted his draft recommendations after reviewing about 1800 current Bank projects in 113 countries for which the Bank had lent US$138 billion, and after meeting with a number of policy makers from borrowing countries.

Entitled "Effective Implementation: Key to Development Impact" and marked confidential, the Wapenhans report calculated that over a third of World Bank projects completed in 1991 were judged failures by the Bank's own staff, a dramatic 150% rise in failures over the last ten years. Specifically Wapenhans noted that 37.5% of the projects completed in 1991 were deemed failures, up from 15% in 1981 and 30.5% in 1989. Bank staff also said that 30% of projects in their fourth or fifth year of implementation in 1991 had major problems.

The meeting with policy maker representatives from half of the borrowing countries provided some startling comments on the Bank. Wapenhans recorded over 400 pages of anonymous testimony which slammed the Bank for ignoring local input in favour of policy mandated from Bank headquarters, that was not even consistent. One borrower said that Bank staff insisted on as many conditions as possible, some of which reflected insensitivity about the political realities of the country, and sometimes even conflicting with fiscal policy required under structural adjustment policy changes required by the Bank and its sister organisation, the International Monetary Fund. (This was backed up by the report's own findings which showed that only a quarter of all Bank projects between 1967 and 1989 were in compliance with financial covenants in loanagreements.) Another borrower said the Bank staff "take a negotiating position not a consulting position - they know what they want from the outset and aren't open to hearing what the country has to say", while a third said that they felt "psychologically pressured" to take it or leave it, and the country then ends up with a condition that it has no way of honouring and a contract that cannot be implemented. Others said that the Bank "changes its wisdom with the passage of time. We saw the Bank talking about import substitution in the sixties, then export substitution, then social problems and then the environment."

In fact at the time other reports by the Bank's own staff showed a similar disturbing trend of ignoring local impacts of projects. A five volume operations evaluation of completed projects in Brazil published internally by the Bank earlier in 1992, noted that loans of US$1 billion made in the 1970s and 1980s for projects in the Amazon rainforests, the drought prone north eastern region of the country and the slums of Sao Paulo, bore out environmentalists concerns at the outset. Among examples of this impact provided by the report was the Itaparica dam on the Rio San Francisco that resulted in the displacement of 40,000 people. In 1992 five years aftercompletion, promised irrigation schemes for the displaced (and rehoused) people had not materialised resulting in "prolonged idleness" and consequently "incidents of intra communal violence, alcohol abuse, family disintegration, and low morale."

DAM PLANS DAM THE BANK

This idea of an independent monitor has been tried once before and it opened a can of worms that embarrassed the Bank. The same year that the Wapenhans report was published, an independent commission, backed by the World Bank, completed a review of the Bank's funding of the Sardar Sarovar dam project on the Narmada river in India, the first ever outside review in its 47 year history. In this report the commission's chairman, Bradford Morse, said that in 1985 when the World Bank first approved the loans for Sardar Sarovar, "no basis for designing, implementing, and assessing resettlement and rehabilitation was in place ... no one knew the scale of displacement that would result ... nor had the people [to be affected] been consulted." Current studies estimate that 100,000 people will be displaced. Another example Morse gave was a call in the loan agreements for measures to minimise the risks of water-related diseases. Yet, he said, there were no safeguards to prevent the spread of malaria near the dam site. It quoted a consultant's report which says that drainage works were conducted so carelessly that they amounted to "taking malaria to the doorsteps of villagers".

This report was hardly suprising. Time after time, dam projects have resulted in severe environmental and health damage. The World Bank itself now admits that the Aswan dam in Egypt has resulted in a major increase in malaria and bilharzia, both as a result of the large increase in the amount of stagnant water. The dam did, as promised, stop the flooding of the Nile delta but the silt which these floods delivered to the fields and that gave them their fertility now clogs the reservoir. As a result of this and the intrusion of salt sea water the fields have lost their fertility and the reservoir is so blocked that it generates hardly any electricity at all. Yet the Bank took little of the Morse Commission seriously. Morse himself later claimed that the Bank then played fast and loose with his report by using it to write a "remedial plan" to satisfy directors, but which he said "ignores or misrepresents the main findings" of their review. In fact he originally called for the Bank to "step back" from the project because "little can be achieved while construction continues."

In March 1993, the World Bank finally agreed to stop funding the dam, ostensibly because the Indian government said that it no longer needed the money. But in fact since then work on the dam has slowed and stopped on occasions because the Indian government is unable to find the money to pay for it.

THE GEF

Because of pressure brought on the World Bank by groups like the NBA, the World Bank has changed its policies somewhat, but the worry now is that the changes are no more than cosmetic. A case in point is the Global Environment Facility (GEF) that was set up in November 1990 as a three year joint pilot project of the Bank, the United Nations Development Program and the United Nations Environment Program. At the time donor countries pledged US$861.4 million to the GEF itself, US$350.1 million in co-financing (Japan, Australia, Belgium, Canada, Japan, and Switzerland) and parallel financing (US). The existing US$200 million in the Montreal Protocol convention on ozone depleting substances was included in the accounting, rounding off the initial pool at US$1.411 billion.

GEF projects were invited in four areas - to tackle emissions of greenhouse gas or ozone-destroying chemicals, protect biodiversity, or reduce pollution of international rivers. Projects had to be in countries with a per capita income of less than US$4,000 a year and the project had to tackle an international problem rather than merely a local one. At the third meeting of participating governments (known as the Participants Assembly) in April 1992 in Washington DC, the Participants were asked to consider extending the four categories of schemes that then qualified for its money, to cover other anticipated treaties. The new categories were - combating the spread of deserts and tackling "land-based forms of marine pollution." By the fourth meeting in December 1992 a total of 70 projects had been approved for US$584 million in financing. The GEF estimated at that point that 47% of the core fund money had been earmarked for biodiversity, 36% for global warming and 17% for international waters.

Until now, activist criticisms of the Bank's workings (apart from the actual policies and their effects of their investments) may generally be summarised as the lack of democracy, accountability and transperancy. The GEF was supposed to change all this. First of all, they officially threw open all their documents to the public. Second of all they consulted NGOs on each and every project, and even offered to pay for some of the NGOs own projects. Finally they offered Southern countries an equal say in their decision making. And of course two other non activist hostile UN agencies were supposedly equal partners, so the World Bank would not control any of the decisions. "This is a Trojan horse for the World Bank," trumpeted it's public relations man Nicholas von Praag to reporters, at the Rio Earth Summit.

The GEF was a Trojan horse, but not for the environmentalists to change the Bank, but rather for the Bank to quell their criticism. A careful examination of the real decision making and implementation policies proves that the GEF was little more than a greenwash, albeit a sophisticated one, that evolved to counter criticism.

Firstly despite the supposed equality of the three participating agencies, the actual day to day administration of the GEF itself is conducted by the World Bank. Both the chairman and the administrator are Bank employees (although the chairmanship theoretically is supposed to rotate among the agencies). In fact the chairman is the head of the Bank's Environment Department, Mohammed El-Ashry.

Secondly there is the matter of financing. In terms of project allocation, the Bank gets two-thirds of all the project money, UNDP gets the remaining third,while UNEP has virtually no projects at all. Weighed by numbers of projects, fully two thirds of the World Bank's projects are actually tied to its own bigger, secretive, undemocratic, massive investment projects in dam building and forestry among others. According to estimates provided to us by its own staff, weighed in financial terms almost 85% of the World Bank's share was tied to its own projects. Charles Feinstein, operations officer for the Bank's Global Environment Unit, said that of 23 World Bank projects with US$298.5 million in approved funding in April 1992, there were 7 free standing projects of a total of US$43.5 million, while the rest were tied projects (ie 70% of the projects in number terms and over 85% of the money committed to Bank related work). Even more interesting is the fact that the Bank investment projects outweigh their companion GEF projects by over 10 to one, according to Charles Abugre, a Ghanian economist for the London based Agency for Coordination and Development (ACORD)

Finally many GEF projects are designed to "green" existing environmentally destructive projects or to divert atention from such projects. For example, only eight months before the World Bank appoved a major energy sector loan to India, the GEF had approved a US$30 million grant to India for a "non-conventional energy project," such as wind and solar power. But the major loan was for precisely the opposite - it was the first of a series of new loans to India to build up coal fired electricity generating capacity. The loans are supposed to finance a doubling of India's burning of coal for energy production. Taken together activists estimate that the new projects will add the single biggest new source of greenhouse gas emissions on the entire planet. The Washington DC based Environmental Defense Fund, estimates that it will add 23% to India's carbon emissions (1989 figures) and 2.5% to the global carbon emissions total.

The first loan, which will give US$400 million to the National Thermal Power Corporation (NTPC), to finance the first stage of a gigantic, multibillion dollar investment plan to intensify coal mining and expand coal-fired production of electricity in nine super thermal power plants all over India. The Bank loan will build 2,000 MW of capacity and future loans will support an additional 6,000 MW of capacity through 1997. After 1997, plans call for an additional 8,000 MW of capacity.

Not only will this new capacity add significantly to global warming, the activists say that this is a clear contradiction of the Bank's own studies of India's power needs that were conducted two years ago. The Bank issued a paper entitled "Long Term Issues in the Indian Power Sector" that said increased emphasis needs to be placed on improving efficiency of supply, consumption and pricing of electricity). It added that supply capacity expansion alone will not substantially improve the critical power demand/supply situation and is likely to be financially unsustainable.

Worse still the new loan also allocates virtually no funds for compensating and rehabilitating 140,000 people forcibly resettled by related Bank projects. Bruce Rich of EDF gives examples from the Bank's own summaries of resettlement and rehabilitation that the NTPC promises under the Environmental Action Plan: for Farakka (55,000 people displaced and dispossessed) "swimming, athletics sports material to local clubs" while the community centres are described in three words "bus passenger sheds" Rich says that the full Environmental Action Plan is supposed to be based on public consultation and disclosure but even members of the Bank's own environmental department have not been allowed to see it by the India country department of the Bank.

THE IMF

The IMF is very like the World Bank in its absence of accountability, transperancy and democracy. It too is governed by a board of directors who are appointed by its major donor countries such as the US and whose votes are weighted inproportion to their financial contributions. The biggest contributors are the US (19.14%), Britain (6.63%), Germany (5.79%), France (4.81%) and Japan (4.53%).

Unlike the Bank its president is European, but like the Bank, the tradition of always appointing a president from that continent is maintained. Currently the IMF president is Michael Camdessus of France. Unlike the Bank the IMF does not pay for development projects. Instead it lends money to countries to help them overcome cash shortfalls. Over the years it has made this money available only on increasingly strict requirements that countries follow its economic advice - generally known as Structural Adjustment Policies (SAPs).

These SAPs require countries to devalue their currencies against the dollar, which makes their goods cheaper for foreigners to buy and theoretically makes foreign products more expensive. In principle this is a very good idea because it should make the country wary of buying expensive foreign equipment. In fact the IMF actually disrupts this by rewarding the country with a large foreign currency loan that encourages the country to go out and buy foreign equipment. To exacerbate this, the IMF requires the country to lift import and export restrictions so even more money flows out of the country.

Another IMF SAP requirement is that countries balance their budgets and not overspend, which in theory is also a good idea, but is harder to put into practice. There are two ways this can be done - by raising taxes which the IMF frowns upon or to cut government spending, which it definitely recommends. As a result, IMF loans often result in deep cuts in programmes like education, health and social care, which hurt the poor most, because they depend heavily on these services. Finally the SAPs require governments to remove price controls and state subsidies. Once again, most of these subsidies are designed to help the poorest people by subsidising their basic needs like food and milk.

By devaluing the currency and simultaneously removing price controls, the immediate effect of an IMF SAP programme is generally to hike prices for the poorest people by three or four times and very often this provokes riots and ultimately kills off the poorest. The IMF plays a pivotal role in making loans to many countries, well above and beyond the actual money that it lends out. Without membership of the IMF, countries cannot join the World Bank and what's more, unless they follow the economic rules of the IMF, they cannot borrow from the World Bank.

The IMF itself estimates that its money "unlocks four to seven dollars" in loans for every dollar that it gives to countries. The converse is also true. In 1987 the government of Zambia broke off its dealings with the IMF. Loans from the World Bank and bilateral donors like Britain dried up immediately. Likewise, Vietnam has just qualified for an international package of US$1 billion in new aid, after it agreed to pay off US$140 million in arrears to the IMF, owed from 1975. Vietnam was able to pay this only as a result of a part loan, part grant from a consortium of 15 countries. As a result it received a new loan of US$223 million from the IMF.

IMPACT OF THE IMF

>From 1977-1985, Peru allowed its development policy to be guided by the IMF and undertook two major SAP programmes. In this time, average per capita income fell by 20%, inflation soared from 30% to 160%. Unemployment and underemployment increased dramatically. By 1985, workers took home 64% of what they took home in 1979 while government spending on social sectors like education and healthcare dropped from 26% to 18% of the national budget. Food and fuel subsidies fell to zero, average food availability per capita dropped by 26%, while child malnutrition increased from 42% to 68% of the child population. In 1984, the Philippino government accepted an IMF package. Within one year, Gross National Product regressed a full decade to 1975 levels. Real wages dropped by 46% for all urban workers, 48% among self employed workers. The corresponding figures in the rural areas were 31% and 41%. Government spending on education dropped to 30% below 1979 levels while spending on primary health care was a fifth of the money it paid out to subsidise four private hospitals taking care of wealthy patients.

In the 1980s a SAP programme in Sri Lanka resulted in an uninterrupted decline in calorie consumption for the poorest 30% of the population while the top 50% were increasing theirconsumption.

Between 1980 and 1985, 47 countries accepted SAP loans from the IMF worth US$30.3 billion. Over this time period, three quarters of the countries in Africa, Asia and Latin America experienced marked declines in their per capita income.

Author Graham Hancock points out in his book "Lords of Poverty" that the IMF was not the only reason that these countries suffered so badly, their governments were also to blame. "For such people money has probably never been easier to obtain than today: with no complicated projects to administer and no messy accounts to keep, the venal, the cruel and the ugly are laughing literally all the way to the bank. For them structural adjustment is like a dream come true. No sacrifices are demanded of them personally. All they have to do - amazing but true - is screw the poor, and they've already plenty of experience at that."

He gives the example of president Mobuto Sese Soko of Zaire who fired 7,000 teachers in the state school system for "budgetary reasons" while he maintained a lifestyle of luxury. Soko owns 51 Mercedes Benzes, eleven country homes in Belgium and France and beachside villa in the Costa del Sol.

CONCLUSION

Neither the World Bank not the IMF are intended to help the poor. Rather they exist to serve the wealthy elites by promoting market economics which function by allocating scarce resources to those with the greatest amount of cash. Their policies will remain skewed towards these Northern interests because of the way it is controlled. The voting pattern where power is determined by monetary contributions has made these institutions instruments of a handful of industrialised countries, to further their interests and concerns, particularly those of their multinationals. Since the Bank intensively promotes policies as well as provide funds, the development priorities of the South are accordingly decided by a few countries in the North. This structure of the Bank also precludes public participation and lacks accountability, to both the Southern governments and people.

Pratap Chatterjee is a freelance journalist who specialises in environment and finance.

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