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World: Bank Joins Partnership To Review Loan Conditions

Washington, 15 July 1997 (RFE/RL) - In the process of privatization, says a noted political and human rights activist, the most susceptible people in society - children, women and the elderly - are often swept aside and there is created in the country both high unemployment and lower wages for the vast bulk of people.

At the same time, says the activist, after years of dictatorship, the government has grown corrupt, there is uncertainty and a complete lack of confidence.

The words spoken were not about the countries of central and eastern Europe and the former Soviet Union specifically, but about the situation world-wide as it is seen by some non-government groups who feel the policies of the International Monetary Fund (IMF) and the World Bank, and the conditions they apply to loans, are actually causing many of the problems.

Argentine Senator Graciela Fernandez Meijide, a prominent Latin American human rights activist, made her comments at World Bank headquarters in Washington Monday at the launching of a new initiative to review the impact of international lending policies on local people and civil society and recommend changes.

What makes the effort unique is that the World Bank is joining with an umbrella group of more than 500 citizens' groups from around the world and the governments of seven countries to conduct the reviews. The seven nations which agreed to participate are Hungary, Bangladesh, Ghana, Mali, Uganda, Zimbabwe and Ecuador.

Doug Hellinger, Coordinator of the umbrella global civil society network, known as SAPRIN, says the aim is to "give voice to those who have been excluded from economic policy making and to give government's greater flexibility to respond to the needs of their own people."

Hellinger, in opening remarks to the two-day conference launching the project, said it still seemed strange to many of the private groups which have been critical of bank policies to now be invited inside to work together. He credited Bank President James Wolfensohn who, upon accepting the job two years ago, made an unprecedented effort at opening the bank's operation to public scrutiny and to involvement with local people.

But in welcoming the participants in the project, Wolfensohn said he was not prepared to cede the "moral high ground" to the private groups. The bank made some serious errors in the past, he said, but it has done many things right and most of the people who work at the bank, including himself, care deeply about alleviating poverty and ending injustice and inequality.

Wolfensohn has dramatically changed bank operations to invite far greater participation by local non-government groups and private citizens directly impacted by bank-financed projects.

But the World Bank by itself cannot solve the problem on its own, said Wolfensohn. Nor can governments or private groups. "It has to be done in a three way partnership - that is a partnership with civil society in its broadest sense, and with the governments," he said.

Said Wolfensohn: "I'm concerned about the 100 million people who are being added to our planet every year, I'm concerned about the three billion people who live on under two dollars per day and the 1.3 billion people who live on under one dollar a day, their exponential growth, the reduction in equity and the increase in poverty we have to arrest."

Over the next 12 to 18 months, a national steering committee composed of private groups, the government and the bank, will be set up in each country to coordinate the review. They will hold public forums, conduct field investigations and pull together every aspect of bank-supported projects and how they have affected the citizens and economy at all levels in each country.