In 1994 the US Treasury Department recorded that ‘Since the founding of the World Bank in 1945, we have been their largest and most influential contributing member; we have also been their largest beneficiary in terms of contracts awarded to US firms.’ These self-congratulatory claims would not have been worrisome to the developing countries but for the fact that the World Bank is an imperialist instrument.
A confidential memo, which Lawrence Summers, the World Bank’s chief economist sent to his colleagues in December 1991 was alarming. The Economist published part of it on February 8, 1992, under the title “Let Them Eat Pollution.” It began thus:
“Just between you and me, shouldn’t the World Bank be encouraging more migration of the dirty industries to the LDCs (Less Developed Countries)?... The measurement of the costs of health-impairing pollution depends on the foregone earnings from increased morbidity and mortality. From this point of view a given amount of health-impairing pollution should be done in the country with the lowest cost, which will be the country of the lowest wages. I think the economic logic behind dumping a load of toxic waste in the lowest-wage country is impeccable and we should face up to that.”
This macabre memo gives a glimpse of the shockingly ruinous role of the bank in developing countries. Over the years the bank has become a formidable global power and a key pillar of the shadow state which has come to preside over the world economy. Summers’s memo, as observed by one of the contributors to this volume, is a reflection of the extreme consequence of bizarre market illogic. If an average US citizen has 70 times the income of an average Indian citizen, then one US citizen in the market equals 70 Indian citizens; so a death in a developing country is less expensive than a death in an advanced country.
Using its financial power to leverage policy-making in developing countries, the World Bank has turned debt into a key instrument of imperialism with all its attendant evils. After India’s economic crisis of the late 1980s the bank pressured it into an overhaul of economic policies through structural adjustment programmes from the early 1990s.
As India overcame its crisis and nearly two decades down the line it had over US$200 billion of reserves as of September 2007, in fact, an excess of foreign exchange reserves which is creating a problem of excess of liquidity. The same contributor asks whether the political authority is weakening itself deliberately to push the interests of capital. That should not be surprising. Going by a recent report India is the largest recipient of World Bank loans, with over US$9 billion (15 per cent in terms of loans) worth of assistance as of the fiscal ending June 2010. When the country already has an embarrassment of riches why it should mortgage itself to a dubious moneylender is a mystery.
As the World Bank’s involvement in India has been a matter of grave public concern, the Independent People’s Tribunal on the World Bank Group in India organised in Delhi during September 2007 was well-conceived. It brought together a broad spectrum of society to look at the damage caused by the bank to the country as a whole.
This valuable and highly informative book is the direct result of the Tribunal. Through 35 presentations thematically arranged into seven sections it effectively captures every conceivable policy issue in which the bank has dabbled. One presentation even indicts its economists as ‘economic criminals’ and condemns the Planning Commission for producing fraudulent poverty estimates.
The jury of 13 sat through the deliberations of the four days on testimonies and depositions from 150 affected people, experts and academics from some 60 grassroots civil society groups and communities from all over India, covering 26 different aspects of economic and social development. The conclusion contains the 29 charges the jury framed against the operations of the World Bank in India.
‘To exclude and hurt the majority of Indian citizens in the name of development and poverty alleviation is not merely callous, it verges on a social crime,’ wrote the jury. Its concluding observations are, ‘In India there is little difference between the thinking of the policy-makers and the World Bank; we hold the Indian government equally responsible and call for a reversal of its policies.’
However, the World Bank’s withdrawal from India is wishful thinking for at least three reasons: One, as shown by some of the contributors its money creates enormous incentives for officials not to pursue alternative policies and creates more loyalty to the bank than to the people of India; Two, the ‘revolving door’ between the bank and the government of India that results in the filling of most economic policy-making positions of the government with bank staff has allowed it to impose its ideology and policies; Three, while the bank works with domestic elites at the top, the agency of the NGOs reflects its cooperation for development, exposing, thereby, the local face of imperialism, and engages in a complementary activity at the bottom, neutralising and fragmenting the burgeoning discontent that results from the savaging of the economy. The Maoist movement is not without relevance as a rallying force.
— The author is a sociologist and commentator on public affairs.
prk1949@gmail.com