Washington, 23 July 1997 (RFE/RL) - The World Bank has acknowledged that, when the republics of the Soviet Union became independent and joined the bank in the early 1990's, the bank itself knew "virtually" nothing about the socioeconomic make-up of these new nations.
The Soviet Union had not been a member of the bank or its sister Bretton Woods institution, the International Monetary Fund (IMF), and ex-USSR societies were unlike any with which the bank had been working.
While the bank says the "structure of these societies, their institutions, their cultures, (and) the wishes of their populations" remain "unknown elements" even now, it has also found that the governments and leaders of these new nations were equally uninformed on many aspects of their own societies.
These conclusions emerge from a new World Bank study of the bank's use of social assessments, started on a large scale only in the past two years, and still considered experimental. The sociological research, coupled with the usual economic analysis, is to help the bank better design, focus and implement the development projects it traditionally finances.
The result so far, it says, shows how vital it is to have the sociological studies in addition to the economic data.
For example, the study says that in preparing the $500 million loan to help Russia adjust its coal industry and reduce the adverse impact it was having on the federal budget, the social assessment "had a profound impact" on the program finally approved.
The social assessment found -- to everyone's surprise -- that non-miners in coal regions were the largest group adversely affected by the coal reform program, not miners. That caused the program to be refocused to the broader community rather than to coal miners who had actually been a privileged economic group.
The assessment found that the human settlements in the coal regions had very diverse characteristics. This may appear self-evident, says the study, but much of the Russian reform agenda had treated the coal sector as a monolith instead of recognizing the local nature of many of the problems.
The assessment also showed that the transfer of social assets from coal companies to local governments was having unanticipated adverse effects on local communities, so the coal subsidies were shifted from the coal companies to the local communities.
The battle over the subsidies was a particularly difficult one, says the study, because it dealt with control of nearly $2 billion in annual subsidies. What swung the weight behind changing the subsidy system, says the study, was the fact that not just the experts and reformers, but the people themselves, wanted the changes.
The assessment also found that the people -- miners and non-miners alike -- didn't trust the coal industry, the government or the World Bank. So the Interagency Coal Commission and the Association of Coal Mining Cities were created to become the vehicles for decision making, with pilot programs to channel funds for the first time to nongovernmental and community-based organizations, as well as to labor unions.
The social assessment also had an impact on a project to rehabilitate the Baku water supply system in Azerbaijan.
The original idea was to provide some pumping stations and spare parts to get the local water company restarted. However, the social study revealed that the high level of water losses the system was suffering was mostly occurring in households. Thus the project was redirected to community-based repair and maintenance for 180,000 households, including the installation of meters to improve financing and encourage water conservation. It also greatly increased citizen participation in the local water company which knew almost nothing of its own customer's preferences.
In Uzbekistan, the bank says, a plan to deal with water supply and sanitation, especially in the areas around the Aral Sea, was changed when local people rated water as only their fourth concern behind income to buy food, cooking fuel shortages and unpaid wages.
Says the report: "As a result, project preparation was stopped, redirected and begun with a wider focus on peoples' concerns, especially the contribution of water to economic activities such as gardening and raising livestock."
The social assessment brought even more dramatic changes to the project. It found that 68 percent of the people didn't like the salty taste of their main water supply. But it also found that the local people would tolerate salinity up to 2,000 miligrams per liter. That is slightly above the World Health Organization's recommended level of 1,500 miligrams, but twice Uzbekistan's own official national standard of 1,000 miligrams per liter.
This finding had "important cost-savings implications," says the bank's study, because it meant that it wasn't necessary to get as low as the official Uzbek standard. However, it also meant that a plan to use more money-saving shallow wells and hand-pumps was out because the resulting water with salinity as high as 7,000 miligrams per liter was unacceptable to the people.
In Turkmenistan, the initial orientation of an urban transport project was toward simply buying new buses and spares. But the social study revealed the present system was in "chaos" with 90 percent of users dissatisfied with service, which was practically nonexistent during the evening rush hour.
The key problem, it turned out, was that bus drivers' pay was so low they were exploiting the public to supplement their income. So drivers salaries' were dramatically raised, fare collectors were added and company officials began riding the buses to check on performance.
At the same time, fares were raised by 2,000 percent to more closely cover costs, along with other improvements in ticket availability. The result, says the bank's study, is that the social assessment made possible real improvements in urban transport more than 18 months before World Bank funds were scheduled to become available.
The transport system couldn't begin to meet the wish expressed by most users to always have a guaranteed seat during rush hours, and there is no money available now to improve the road system in parts of the city, another need for the transport system.
But the study says this shows that the social assessment cannot be acted upon automatically, but must be coupled with the economic analysis to make all programs effective and affordable.