The World Bank's environmental and social requirements for approval of infrastructure projects are among the strictest in the world, says Ian Johnson, the institution's vice-president for sustainable development.

Ian Johnson. -

The World Bank celebrates its 60th anniversary this year, at a time when debate is heating up about the role of the Bretton Woods institutions in promoting development and when demands to democratize their processes are intensifying.

The Bank's vice-president for sustainable development, Ian Johnson, spoke with Tierramérica during the meeting in New York of the U.N. Commission on Sustainable Development. Following are excerpts from that dialogue:

– During the 1990s, official development assistance continued to decline. In terms of water and sanitation, only five billion dollars came out of the 15 billion dollars in official aid annually. What are your thoughts on this? – It needs to increase. Otherwise I think it’s very hard to see how we can meet all of the Millennium Development Goals and achieve sustainable development.

– Environmentalists are skeptical about the role of the private sector in global efforts for sustainable development. What is your position on the matter? – Let us just take water and sanitation. Investment in those areas at the moment is now around 15 billion dollars a year in developing countries. That probably has to double. That funding is not going to come from a single source. It's got to come from the public sector, private sector, non-governmental organizations can play a role, but also needed are foreign direct investment, local direct investment and development aid.

– What can be done to persuade donor countries to double the funding level? – I think we have to increasingly make the case that we are a much smaller world than we were 20 or 30 years ago. We are a much more connected world than ever before. And we have a moral duty; it strikes me, to figure out how we are going to live happily ever after on the planet. It's also true that if we don't provide the kind of resources that help poor countries get richer, then poor people will be landing on the doorsteps of the rich countries very, very quickly.

– Global military expenditures now exceed 900 billion dollars a year. Does this indicate growing imbalance in spending priorities? – James Wolfensohn, World Bank president, has been very clear on this. He shakes his head in disbelief. How can we think of a world in which we are so closely connected, where we are willing to spend 900 billion dollars on destroying one another? It surely should make some people wake up and say, if we can spend 900 billion on military and defense, surely we can spend a hundred billion on development, on water, on education. It's not just an economic issue, it's not just a social issue, it's a moral issue — the moral issue of our age, I think.

– Several environmental groups have criticized the World Bank for funding projects that can cause environmental damage, such as big hydroelectric dams, which also cause massive displacement of indigenous populations. Is there any sign that the Bank might change its funding policy in this regard? – We have seen a major policy shift over the years. We have some of the toughest environmental and social due diligence of any organization in the world. It doesn’t mean that we do everything perfectly. But we do try to ensure social and economic responsibility. We even have an independent watchdog inside the Bank. Do we go as far as some people would like us to go? No.

– Why not? – One of the reasons is that developing countries do need infrastructure. You cannot grow your economy if you don’t grow energy as fast as economic growth. You need infrastructure, you need roads, you need railways, you need power plants, there’s no doubt about that.

– At what price? For example, the Nam Theun dam in Laos, supported by the World Bank, reportedly displaced about 120,000 people. – That figure is an exaggeration. There are cases where governments, not the World Bank, decide that in the interest of development, there may be some negative effects whether it is financed by the Bank or not. Whenever that occurs, we have the strictest due diligence, we consult the affected people, and we talk about alternative livelihoods for those who are displaced. That doesn’t mean it will always meet every body’s perfect objectives. But in many cases it moves governments towards environmental and social responsibility.