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FINANCE: World Bank Careless About Development Goals – Report

Anil Netto

SINGAPORE, Sep 20 2006 (IPS) - Several developing countries are not reaching sustainable development targets fast enough despite numerous international agreements, says a report, launched here amidst criticism that World Bank energy and mining projects were not doing enough to protect the environment and improve the plight of the poor.

The Sustainability Watch 2006 Report, launched by civil service organisations at the annual meetings of the Bank and the International Monetary Fund (IMF) stressed that sustainable development was crucial as about three billion people – almost 50 percent of the world population – now live on less than two dollars a day. This figure was expected to rise by 100 million by 2015 unless implementation of internationally agreed commitments was substantially improved.

The most critical factor is the market-oriented development frameworks, which promote trade liberalisation and privatisation, said Roy Cabonegro, regional facilitator for Asia of Sustainability Watch, a civil society network in 15 southern countries monitoring promises to improve sustainability. These frameworks do not pay serious attention to environmental constraints, especially in the case of planning for land and natural resource use.

The report also identified four other key barriers to sustainable development. Weak governance failed to produce sufficient economic development and social services to catch up with population growth and led to a reluctance to challenge unfair trade liberalisation regimes.

Institutional constraints led to failures in strategies, in proper monitoring of the interaction between poverty, environment and governance, and in civil society participation.

Inconsistent policies, on the other hand, meant that sustainable development principles were often contradicted by other policies that harm the environment.

Many governments also put in inadequate resources to improve sustainable development while loan conditionalities and unsustainable debt further restricted their ability to achieve targets.

“All our environmental indices are going down while economic growth is steadily going up,” Cabonegro told IPS.

Reacting to the report, the Bank’s chief scientist, Robert Watson, said he largely agreed with the findings but implementing the recommendations to overcome the barriers would be difficult. Finance and other ministers needed to be convinced, he said, adding that it was also a major job to convince the private sector.

“We really have to develop the importance of the poverty-environment-economy link,” he stressed, adding that it was crucial to reduce the factors that drive biodiversity loss.

“I am not convinced we can meet the (United Nations prescribed) Millennium Development Goals even with political will,” he warned.

One observer at the launch of the report sharply criticised growth-oriented economic development models. “We are so fixated on growth, growth, growth, when it is precisely that growth which harms the environment,” she said.

In a communiqué on Monday, the Bank’s Development Committee welcomed its own progress in developing a Clean Energy Investment Framework, a response to the mandate from the G8 summit in Gleneagles last year. The framework proposes raising 10 billion U.S. dollars for conventional energy technologies.

The Committee said it had found broad support for promoting energy for development, access to affordable energy for the poor, the transition to a low carbon economy and the provision of assistance to developing countries to adapt to climate change.

But instead of combating climate change, the framework promotes coal-fired power, nuclear power and large hydroelectric projects, complained nine civil society groups in a statement to mark the release of their report. The report, ‘How the World Bank’s Energy Framework sells the climate and poor people short’, was released here on Sunday.

“In continuing to lend for fossil fuel and dam projects, the Bank has consistently missed the social and environment double dividend that renewable energy technologies could bring,” said Peter Bosshard of the International Rivers Network, which works to protect rivers and defend the rights of communities that depend on them.

If the Bank was serious about fighting climate change, it has to first stop subsidising the expansion of the oil industry, said Graham Saul of the Washington-based Oil Change International, which works to expose the true costs of oil and promote cleaner sources of energy.

“You can’t actively subsidise fossil fuels and effectively fight climate change at the same time,” he said. “It’s a disgrace that public institutions like the World Bank are using aid money to prop up oil companies that are already the most profitable companies in the world.”

Other civil society groups have challenged the Bank to prove that its mining projects are reducing poverty and improving people’s lives. It called on the International Finance Corporation (IFC), the private sector arm of the Bank, to report on poverty reduction and development impacts on a project-by-project basis and to invest in other areas if such projects were found not to be benefiting the poor.

Currently, the IFC reports the impact of the projects it finances on an aggregate, institution or sector-wide basis.

What this kind of reporting ignores is that, unlike profits and losses in a financial portfolio, poverty reduction, environmental damage and impacts on individuals and communities cannot be averaged across the IFC’s portfolio, said Nikki Reisch, Africa Programme Manager of the Washington-based Bank Information Centre, which is pushing for public accountability of the Bank’s operations. “A farmer who loses his land near a mine in Peru does not benefit when a small business owner in central Europe gets a catering contract with a mining company.”

Meanwhile, a couple of activists privately complained that the small and closely supervised designated protest area at the foyer of the official venue was a joke. As the annual meetings drew to a close, Bank group president Paul Wolfowitz paid a courtesy call on activists in the civil society room near the protest area.

One of those who had protested in the area earlier, Sandy Krawitz of ActionAid International, took the opportunity to let Wolfowitz know how she felt.

“I told him how deeply upset we were that our economist, Maria Clara Soares, was detained by Singapore for about 30 hours in a room…treated like a criminal and then deported back to Brazil,” Krawitz told IPS. “This is a woman who is a brilliant economist who had been a consultant to Brazil and her treatment was absolutely unacceptable.”

Wolfowitz, listening intently, expressed deep regret and said he did not have much of a say over the choice of Singapore as the venue. But he did give an assurance that things would be different in Turkey in three years’ time, said Krawitz. “We will have to wait and see,” she said.

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