Among the ravines and abysses of the nearly barren mountains of Eastern Qinghai, China, live 57,775 impoverished farmers who have won the development lottery. From an estimated 60-BOrn other poor Chinese farmers, they have been selected for a new start in life under the World Bank's Western Poverty Reduction Project.

These volunteer pioneers will be resettled further west in Qinghai province, on what the Bank describes as "adequate farmland", in Dulan, with the help of $81 m for resettlement and irrigation systems.

According to bank documents, they are to move within one year, settle down in two, "eliminate the condition of inadequate food and clothing within three years and extricate themselves from poverty". They will raise cashmere goats, sheep and chickens and produce enough wheat, barley, rape seed and sunflowers to feed themselves with a little to spare for sale in local markets.

But the project, which is due to go to the Bank's board on June 8, has generated so much controversy that even the US Treasury has expressed concern and says it is studying the details.

In the forefront of the critics are Tibetan support groups, who say Dulan - which China has formally deemed to be in a Mongolian and Tibetan minority nationality autonomous area - was traditionally part of Tibet. And the transplant of Chinese settlers into land claimed as Tibetan has also alarmed the Dalai Lama who sees it as one more attempt to eradicate the Tibetan national identity.

"No Chinese government in history has succeeded in colonising the Dulan oasis," says Gabriel Lafitte, research officer for the Australia Tibet Council. "It would require modern technology, much capital and the supply of much cheap labour, and until recently the only one of these three key requirements available was the cheap labour."

The labour is available from the network of prison labour camps in the neighbourhood. According to Kate Saunders at the Tibet Information Network in London, prisoners have long been made to toil there on agriculture and industrial projects in the region. World Bank officials say they have a letter from the Chinese authorities promising that no inmate labour will be used in the project, but Harry Wu, a prominent exiled dissident, says the Bank is funding several projects that could have supported or benefited from prison labour.

Environmentalists have their own complaints. Dana Clark of the Centre for International Environmental Law says the Bank has intentionally mis-categorised the project to avoid having to present an in-depth environmental assessment which would require many stages of approval. "The Bank has a bad history on resettlement projects," she said. "They never learn from their past mistakes."

Bank officials say they have learned and this project will prove that. Mark Wilson, East Asia sector lead of rural operations, says the scheme will not only help erase poverty, but it will allow for a recovery of the environment in these mountainous regions.

He characterises the project area as "adjacent" to Tibet, with Mongolians making up almost 55 per cent of the population, Han Chinese 37 per cent, and Tibetans only 5 per cent. Most of the newcomers will be Chinese, but more than 3,000 Tibetans will be included in the group. "We are very sensitive to minorities and indigenous groups, Mr Wilson said.

Eleven of the 21 primary and secondary schools to be built in the region will be for minorities so that they can preserve their language and culture, he said. "Thoroughfares" have been negotiated for the nomadic Mongolians and Tibetans who herd on the land, he said, and they will be eligible for housing.

But Mary Beth Markey, director for the International Campaign for Tibet, insists the World Bank "did not do its homework". The settlers will be moved to a territory defined for centuries as the "Tibetan plateau", where Chinese once came only as traders, she said.

"I'm not saying poverty alleviation isn't a good thing. But this is an area where there is enormous concern about preservation of the culture. You already have a situation where the culture is degraded. Is the World Bank going to come in and drive the last nail into its coffin?"

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Last updated: 21-May-99