Within the operations of the World Bank, the International Development Association (IDA) provides preferential loans to the poorest countries, raising its funds from donor countries rather than from the capital markets. Despite threats to cut IDA contributions, most notably by the United States, donors have committed to putting in another $11 billion over the next three years (The Economist, 3/26/96). The World Bank has attempted to respond to vociferous criticism of its environmental policies by incorporating environmental concerns into the loan decision-making process from the beginning rather than as an add-on. The "new environmentalism" touted by the Bank portrays economic development and environmental sustainability as partners, not enemies (Mainstreaming the Environment [Summary], World Bank, 9/95). It also recognizes that the commitment of affected communities is often critical to the success of a project, together with the engagement of local businesses and farmers (ibid.).
In March 1996, World Bank President James Wolfensohn and Secretary-General Boutros Boutros-Ghali launched a new ten-year joint project for poverty relief in Africa entitled the UN Systemwide Special Initiative on Africa, itself part of the UN's larger New Agenda on the Development of Africa in the 1990s. Twenty-two of the 25 poorest countries are in Africa (New York Times, 3/17/96). Fifty-four percent of all Africa live below the UN level for absolute poverty and it is the only area where poverty is expected to increase over the next ten years (ibid.). The UN Special Initiative will require up to $25 billion, mostly from reallocation of existing national and international budget priorities. The World Bank will take the lead in raising these funds, which will be used for basic education and health, water and food security, good governance, and peace building (UN press release ORG/1207,10/17/95).
In an attempt to incorporate environmental concerns into its assessment of a nation's economic health-and into national decision-making-the World Bank has adopted a new accounting approach that measures natural resources as wealth (The Economist, 9/23/95). The new program measures the value of a country's natural resources not only on the basis of their ability to generate income but also on their overall contribution to society. Consequently, economic growth that depends primarily on the consumption of irreplaceable natural resources would be viewed as depleting wealth rather than creating it.
The World Bank will be playing a key role in the UN's action plan to help countries achieve the sustainable development goals set out in the most recent series of global conferences on population, social development and women's rights. The Bank has agreed to chair an interagency task force on "the enabling environment for people-centered sustainable development" (UN press release ORG/1207,10/17/95). The task force, one of three organized by the UN's Administrative Committee on Coordination, will focus on macroeconomic policies, poverty eradication, external debt relief and international trade issues. The IMF, UNDP, UNCTAD and UNICEF will also participate.
The Global Environment Facility (GEF), jointly administered by the World Bank, UNDP, and UNEP, funds projects addressing global warming, biodiversity conservation, ozone depletion and protection of international waters. Specifically, it functions as the interim financing mechanism for the climate change and biodiversity conventions and supports the Montreal Protocol on protecting the ozone layer. Following a three-year pilot phase, the GEF received a $2 billion replenishment in 1994 to be used over a three-to-five-year period. By July 1995, only eleven projects, totaling $103 million, had been financed from the replenishment (Mainstreaming the Environment, p. 8). At the October 1995 meeting of the General Assembly's Second Committee, the delegate from India complained that procedures for GEF project approval are too complex, taking almost two years to complete. Noting that the replenishment was at only a minimum acceptable level, he declared that "the time has come to deliver results on the ground on a large scale if the GEF is to make any impact and retain any credibility as a source of funding" (Statement, 10/31/95).
The 1996 meeting of the CSD again considered innovative mechanisms for funding sustainable development, such as global taxes and user charges, but these have been strongly resisted by many governments-including the United States. Official development assistance to developing countries has remained relatively low in recent years and is not likely to increase. The average percentage of GNP contributed by donor countries is 0.3 percent, the lowest since 1973 and substantially below the 0.7 percent set as a target in Agenda 21 (E/CN.17/1996/4,2/22/96). The CSD (Commission for Sustainable Development) also considered measures that governments could take to support sustainable development policies within their own borders, including such economic instruments as carbon taxes, the elimination of damaging subsidies (e.g., for use of fuel, water, pesticides, and fertilizer), conservation trust funds, user fees and tradable pollution permits. "Green" investment funds are yet another way to encourage the channeling of private investment into environmentally sound activities.
Although some developing countries are attracting private capital from abroad, many have not been able to replace dwindling foreign aid with direct financial investments. The World Bank reported that in 1995 capital flows from industrialized countries and international agencies to developing countries totaled $230 billion, seventy percent of which was private (New York Times, 3/21/96). Much of that investment went to China and newly industrializing economies in East Asia and Latin America; ("Sub-Saharan Africa is being left in the dust," ibid.).
From A Global Agenda: Issues Before the 51st General Assembly of the United Nations, (excerpt from Environment and Sustainable Development, by Gail V. Karlsson). Copyright 1996 by the United Nations Association of the United States of America. Published by Rowman & Littlefield Publishers, Inc.
