If so, there will be intensified fights in many locations. A rumoured Bank loan for infrastructure in SA, for instance, will become immensely controversial given the Bank's propensity to privatised, low-quality, high cost-recovery, ecologically-insensitive, gender-blind provisos such as mass pit latrine provision in my city, Johannesburg, which has (dolomitic) soil like Swiss cheese.
World Bank project lending was and remains disastrous, nearly uniformly. The only solution after two decades of trying to reform the Bank on project lending, is a shutdown. Our township comrades from Soweto and Alexandra even tried to get the Bank's Inspection Panel to stop its lending for a series of Lesotho dams, which represent Africa's largest ongoing public works project ever. The Inspection Panel experience was a disaster, only proving that reforming the Bank on project loans is a dead-end strategy. Maybe the occasional Sardar Sarovar or Arun project can be halted, but only by mass popular protest.
Aaron says:
> i concur. there was an interview with stiglitz in a recent edition of the
> Multinational Monitor (?/00) where he made a fairly convincing point that
> ties into the above (if anyone has a different opinion, i am all ears).
> he said that countries have a fairly set amount of capital available for
> investment. by using only internal funds for development, they are
> depleting this capital reserve. however, external development loans (WB) do
> not diminish the available present native capital which could be used for
> schools, health care, etc. thus they could invest WB funds in addition to
> native capital...assuming that the WB loans are invested in a manner that
> would allow the debt plus interest to be repaid with comfort.
That assumption rarely holds.What are the hard currency funds the WB lends into a local central bank used for? Who is controlling hedonistic impulses by local elites, in the form of imported luxury goods? Who is considering carefully the options for debt rescheduling or even repudiation of inherited odious debts? Who is monitoring whether expensive capital-intensive machine imports are appropriate given overabundant unutilised labour and the related costs of parts-replacement, servicing, etc associated with the machine imports? Who is considering imports of raw materials and whether local substitutes could be developed?
In the case of the Southern African countries I know pretty well, the answer to these questions is: yet more elites who don't give a damn about "development."
Last month, I asked one of Stiglitz's colleagues about this subterfuge around what S termed (as I recall) a "zero-sum" development finance option, i.e., that imported funds were necessary because of limits on local sources. As if state spending wasn't feasible, or credit creation via other well-tested mechanisms. The colleague said Stiglitz had never really got around to thinking about this in any depth.
When you do think about it, it undermines the justification for a WB, eh.