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From cei@access.digex.net Tue Jun 27 11:18:04 1995
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Date: Tue, 27 Jun 1995 11:45:38 -0400 (EDT)
From: Competitive Enterprise Institute <cei@access.digex.net>
To: Recipients of the CEI List <cei@digex.com>
Subject: CEI List: McNamara's W.B. Fiasco
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"Robert McNarama's World Bank
Record Rivals His Vietnam Fiasco."
by Paul Georgia
Appeared in +Human Events+
June 9, 1995
Robert S. McNamara may have a sequel in the works.
In his newly released book, "In Retrospect: The Tragedy and
Lessons of Vietnam," he apologizes for his part in executing
the Vietnam War and for the tens of thousands of lives lost
on both sides of the conflict.
Unfortunately for Mr. McNamara his penance may be
just beginning. In 1968 he was named president of the World
Bank, a seemingly ideal career move for a man making
restitution. After all, the World Bank has the noble charge
of raising the Third World from poverty to wealth. Yet
despite this mission, the World Bank is responsible for
serious human rights abuses, environmental destruction and
economic stagnation. The misery, destruction and death toll
that resulted from McNamara's humanitarian service rivals
that from his service as a warrior.
Before 1968 the World Bank was relatively small
and limited in focus. However, under McNamara's watch the
bank changed immensely. Its growth was astounding,
expanding from 1,574 to 5,201 staff members while lending
increased from $953 million to $12.4 billion. Furthermore,
the bank took on the aura of an important humanitarian
organization that would work to eliminate "absolute
poverty." This was to be achieved through an ambitious
program to assist Third World governments in "draw[ing] up
an overall development strategy which will include every
major sector of the economy, and every relevant aspect of
the nation's social framework...." The World Bank of today,
which loans approximately $16 billion per year, is largely a
creation of Mr. McNamara.
WORLD BANK FOSTERS REPRESSIVE POLICIES
Referring to the bank's stated goal, critic Bruce
Rich of the Environmental Defense Fund writes, "Here, then,
was a vision of global central planning, based on an
extraordinary presumption: the staff of the World Bank
would, through visits of a few days or weeks, combined with
desk research, take the lead in gathering data to prepare a
development plan for 'every relevant aspect' of a 'nation's
social framework.'" Such grandiose thinking is reminiscent
of communist pronouncements, and like communism, the bank's
actions have had horrifying consequences for the people they
were intended to help.
In the early 1970s, with World Bank aid and
advice, Julius Nyerere, president of Tanzania, implemented a
program of collectivized agriculture, known as ujamaa
villages. The military drove 13 million peasants (about 90
percent of the population) from their land, burned their
homes, loaded them into trucks, and moved them to new sites
where they were ordered to build new homes. The result has
been declining food production and hunger in a country that
was once able to feed itself.
In another case the World Bank helped to initiate
Indonesia's massive resettlement program to alleviate
overpopulation. Between 1976 and 1986 the World Bank
contributed $600 million directly to the project, which has
already resulted in the forceful relocation of six million
people to the tropical rain forests, creating environmental
problems as well.
Furthermore, the Indonesian government, aided by Bank
funds, plans to relocate to new sites, all 800,000 members
of the indigenous tribes' people from the island of Irian
Jaya by 1998. Resistance to these plans has been met with
brutal repression by the Indonesian government. Irianese
villages have been bombed and in East Timor, resistance to
resettlement has led to the death of an estimated 150,000
Timorese at the hands the military. Tragically those who
survive the relocation are suffering from destitution and
starvation because the rain forest does not support
agriculture.
LEAVES ENVIRONMENTAL DEGRADATION IN ITS WAKE
The list of such World Bank funded atrocities is
long and not limited to human rights abuses. Another
casualty is the environment. Both Brazil and Indonesia are
suffering serious rain forest depletion due almost entirely
to the slash and burn agriculture methods of the poor who
were induced to migrate by force or deception. Both
countries received Bank money for resettlement programs.
In Brazil, the Balbina hydroelectric dam project
was floundering until the Bank provided a $500 million loan.
This small 250 megawatt dam, which has flooded 4,000 square-
kilometers of rain forest, has been a tragedy of epic
proportions. Because the area to be flooded was not cleared
of vegetation, decomposition depleted the river's oxygen,
producing hydrogen sulfide gas and making the water highly
acidic. Moreover, many of the decomposing plants were toxic.
The result was the poisoning and complete death of the
Uatuma river.
Thousands of people whose livelihood depends on
the river for fish, irrigation, and drinking water are
destitute now. An epidemic of skin rashes, intestinal
disorders, headaches, and nausea as well as malaria have
broken out. After the Brazilian government relocated the
Waimiri-Atroari Indians away from the reservoir sight, their
population dwindled from 3,500 to 374. Those left are
mostly children. Absent Bank funds, this debacle may never
have happened.
BANK BUREAUCRATS SEEK MORE POWER
The World Bank's record has given rise to intense
criticism and calls for reform. However, the Bank's
previous attempts at reform have proven futile. One reason
is the incentives that World Bank officials face. One Bank
official has been quoted as saying: "We are like a Soviet
factory. The push is to maximize lending. The...pressures
to lend are enormous and a lot of people spend sleepless
nights wondering how they can unload projects." An internal
audit done in 1987 concluded that "the drive to reach
lending targets...is a major cause of poor project
performance." World Bank bureaucrats seem to have one
overriding goal; to expand the size and power of the World
Bank.
Perhaps, in his next book, Robert McNamara will
admit the folly of the World Bank's actions and admonish the
United States to cease providing 20% of the bank's capital
base. Maybe he will explain that our leaders have failed to
learn from the socialist failures of the World Bank.
Central planning, international wealth redistribution, and
coercion cannot lead to economic development. When
implemented on a global scale, these principles destroy
freedom and economic opportunity, just as they do on the
national scale. This is the unpleasant, but unavoidable
lesson of the World Bank. I for one look forward to Robert
McNamara's next book.
----------------
Paul Georgia is a Research Analyst at the Competitive
Enterprise Institute and author of "The World Bank's Trail
of Sorrows."
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