By Pratap Chatterjee
WASHINGTON, Oct 13 1995 (IPS)

Oxfam and World Bank chiefs put aside longstanding differences this week to forge a tactical alliance to save the Bank’s soft-loan arm, the International Development Association (IDA).

The two sides made an unprecedented joint public appearance Wednesday, causing unease among some non-governmental organisations (NGOs) who worry about the precedent.

World Bank officials say they want to discuss and compromise with their critics on even the most basic issues, particularly in light of the global assault on international cooperation and aid.

But some activists worry that the Bank’s strategy may be one of divide and conquer — embracing those NGOs which are prepared to stand with the agency against larger, anti-aid forces, and marginalising those who insist on retaining a confrontational posture.

“Oxfam has sold us out. We ought to be protesting them in addition to the Bank,” said Randy Hayes, the head of Rainforest Action Network (RAN) in San Francisco.

Another NGO activist who preferred not to be named noted that the issue will be brought up at a retreat next week for non- governmental groups just outside Washington.

“This threatens to divide what has been a broad coalition,” she said of Oxfam’s appearance with the World Bank.

The press conference included Oxfam International’s Stewart Mills and new Bank president James Wolfensohn, who has spent much of his four months in office wooing NGOs. It also featured InterAction, a coalition of U.S. humanitarian and development groups, and Abdou El Mazide N’Diaye, president of the Forum of African Voluntary Development Organisations (FAVDO).

Wolfensohn, a vigorous and charismatic former investment banker, won loud applause from Oxfam and other NGOs when he committed himself to working out a plan for reducing the growing burden of multilateral debt on some of the poorest developing countries.

This has given some NGOs some hope that, under Wolfensohn, the Bank may be more susceptible to major reform than in the past.

Oxfam’s Wallis used the press conference to stress that funds from the World Bank’s concessional lending arm, the International Development Agency (IDA), was in trouble.

“Not only is IDA and the future of the whole multilateral system under threat, but bilateral aid is also threatened in many countries,” he warned. “We’re no longer dealing with aid fatigue. We’re in danger of facing potential terminal sleeping sickness.”

Indeed, lawmakers in the U.S. Congress are to decide next week on U.S. contributions to IDA for next year, which provides no- interest loans to the world’s poorest nations.

President Bill Clinton has asked for 1.386 billion dollars for IDA for 1996, but the Republican-led Congress, determined to slash foreign aid, is not expected to approve more than 775 million dollars, if that. That cut could have a domino effect because each of the other 31 donors has the right to reduce its own contribution proportionately.

Wolfensohn has warned that the six billion dollars in new loans IDA should be approving over the next year could be halved, and he has welcomed the NGOs’ solidarity in the fight to preserve the agency.

But some NGOs are not certain this is a worthy cause and would just as soon see IDA go down the drain. They note that about a third of IDA money go to funding structural adjustment programmes (SAPs).

Bank-funded SAPs, which are aimed at attracting foreign investment and reducing government deficits, have often led to cuts in education and health spending, according to the NGOs, who have argued that the burden of these reforms has fallen most heavily on the poorest and most vulnerable sectors in these countries and on their environmental health.

In the four months since he became Bank president, Wolfensohn has been coy, to say the least, about his views on SAPs. Wednesday was no exception.

“We should at some point have a seminar to discuss what means structural adjustment, because I have very carefully read the literature. …And I have told you there are many, many views of what (it) is. We are ready to listen, we are ready to talk,” he said.

Some activists, however, criticise IDA’s role in pushing structural adjustment on its client countries.

“This is unacceptable. We cannot criticise the Bank (on IDA) and then sit down and (make an) appeal for (it) at the same time,” said Heffa Schucking, an activist from Urgewald, a German environment and development group.

Even one Oxfam staffer, who spoke to IPS on condition he not be identified, expressed concern about Oxfam’s rapprochement with the Bank. “We are taking a big gamble and we don’t know whether it will backfire.”

But Bank officials insist that these dissenting voices are in the minority. They point out that Oxfam belongs to the ’50 Years is Enough’ coalition, the anti-Bank campaign with the greatest international profile.

A release distributed by Bank staff at a ’50 Years’ protest outside the Bank meeting here Tuesday noted that “Most NGOs in the practical business of helping the poor are seeking increased opportunities for debate and operational collaboration with the Bank.”

Whether or not that assessment is correct, it is weighing heavily on some NGOs.

“I personally am very skeptical about IDA and its effect on people, especially in Africa,” said one U.S. lobbyist associated with the 50 Years Campaign. “But our counterpart agencies in the field say that until they see another source of concessional assistance on the horizon, they say we shouldn’t undermine IDA.”

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