September 19, 2017

You can only be judged on your record

This second Open Letter to Mr Barber Conable, President of the World Bank, follows the earlier Open Letter to Mr Alden Clausen, Retiring President of the World Bank, and Mr Barber Conable, President Elect.

Published in The Ecologist Vol. 17 No. 2–3, March–June 1987.

Dear Mr Conable,

Critics of World Bank policies welcome its new concern for the environment, as expressed in its Development Committee’s Report entitled Environment Growth and Development (10 April 1987) and in your speech to the World Resources Institute (5 May 1987). Before we celebrate, however, we must be assured that your concern is genuine and that it will be translated into the appropriate action. Unfortunately, I cannot help feeling that it may well be a vain hope.

To begin with it is difficult to see how you could have done otherwise than express such concern. Senator Kasten, when Chairman of the Senate’s Appropriations Sub Committee, said that if people knew what multilateral development banks were up to they would “be out in the streets” demanding why their money was “being spent on this kind of destruction”.

Hugh Foster, the alternate US Executive Director of the World Bank, voted against hydroelectric projects in Brazil which he referred to as “pure folly” and “environmental disasters”. Indeed indignation against World Bank irresponsibility is growing so fast in official circles, that If you had not promised to reform your ways you would soon be faced with dwindling financial support that might threaten the very survival of your Institution.

Of course your new concern for the environment may be genuine, but then it is difficult to avoid asking why it has not occurred to you before, that there must be some connection between the escalation of human misery, poverty and malnutrition in the Third World and the progressive degradation of its environment.

If Third World people are poor today, Mr Conable, it is not that they suffer from a shortage of transistor radios, plastic buckets, tinned petfoods and the rest of the rubbish that development is making available, at least to the richest among them, nor is it even that their villages remain to be electrified or that they have no access to piped water.

If they are poor it is above all because their environment has deteriorated, because the rivers from which they derive their fish and their drinking water are now contaminated with agricultural and industrial chemicals, because loggers have cut down their forests causing their rivers to become torrents, their streams and springs to dry up and their weather to change, because their land has been eroded and desertified by large export orientated agricultural undertakings.

As Mrs Rahab W. Mwatha said in her testimony at the World Commission on Environment and Development (WCED) Public Hearing (September 1986)

“We are awakening to the fact that if Africa is dying; it is because her environment has been plundered, overexploited and neglected.”

You must know this, Mr Conable. Your Bank’s role in plundering, overexploiting and neglecting the environment of the Third World has been pointed out to you in innumerable well-written and highly documented studies by such writers as Susan George, Joe Collins and Frances Moore Lappe, Teresa Hayter, Catharine Watson and Cheryl Payer, to name but a few, and also by environmental organisations such as the Environmental Defense Fund (EDF) The Sierra Club, Survival International, Friends of the Earth (FOE), not to mention ourselves here.

It has even been pointed out to you on many occasions by members of your own staff. Indeed yours is the only multilateral development bank to have its own environmental department. What is more it employs several highly competent ecologists. But you have invariably chosen to ignore their warnings and to regard environmental considerations as little more than impediments to the achievement of your real priorities.

As Catherine Watson, who worked in the department writes:

“Project staff treated us like scourges. As far as they were concerned, we were trouble. We could hold up projects and we could impose new costs on projects, insisting, for example, on reforestation – although we did both extremely rarely.”

She eventually left because she saw the Department of Environmental Affairs as but “a token office within the Bank” which could never have any real effect on its policies. As she wrote:

“When our proposals were accepted it was because they enhanced the progressive image of the Bank and cost the Bank little. When our proposals threatened the future of a project, or had major implications for Bank practice, they and we were dismissed as unrealistic and impractical. Reform was possible, but only in so far as it left the Bank’s basis unchanged.”

But this has never prevented your Bank from stating your commitment to environmental conservation. Indeed 17 years ago, Ernesto Franco, a Bank representative, assured government delegates at a planning session for the United Nations Conference on the Environment at Stockholm in 1972, that “before financing future economic aid projects, it would investigate thoroughly any damaging effects on the environment.” (New York Times, 11 March 1970).

Franco further announced that the Bank was taking steps “to assure that the projects financed by it did not have serious adverse ecological consequences” or that if they were likely to, that measures would be taken “to avoid or mitigate them”.

Needless to say such assurances were never respected. In a leaked World Bank memorandum, Proceedings of Operational Policy Subcommittee Meeting (9 March 1984) it was admitted that

“as a matter of routine, environmental issues are not considered, but that they are taken into account in specific instances when environmental consequences are pointed out by the Bank’s environment advisor, the press, or special interest groups in host countries.”

It is also admitted that in any case “the Bank does not have the capacity to conduct sector work on environmental issues on a routine basis” – which World Bank critics know to be the case.

But this again has not prevented World Bank representatives from assuring the world at large of its deep environmental concern. It has not prevented Mr José Botafogo, for instance, then your Vice President for External Relations, to write in a letter to The Times (20 January 1986) that

“more than 1,500 (World Bank) projects, many of them including tropical forests, have included environment protection and environment enhancing measures.”

Nor has it prevented you yourself from talking of

“the Bank’s long standing policy of scrutinising development projects for their environment impact and withholding support for those where safeguards are inadequate.”

My scepticism seems further justified by the emptiness of past World Bank promises to reform other destructive aspects of its policies.


Thus, in the early 1970s, Mr McNamara, at the time President of the Bank, began to realise that your programmes did little for the poor of the Third World and that some programmes were actually making them worse off. This led him, in the autumn of 1976, to announce a “global compact” whose object was to achieve

“the meeting of the basic human needs of the absolute poor in both the poor and middle income countries within a reasonable period of time, say by the end of the century.”

Few have questioned McNamara’s sincerity. The trouble was, he did not allow his concern for the alleviation of poverty to interfere with normal banking priorities. Thus for Mr NcNamara, there was no question of abandoning the Green Revolution, even though, from his speeches at the time, as Susan George notes, he clearly realised how adversely it was affecting poor Third World farmers. The reason for this was clear, the Green Revolution, as he himself stated In July 1974, had notably expanded “the scope of profitable agricultural investment” and had thereby enabled the Bank “to increase its lending for agriculture substantially”.

The question was thus “how to bring the improved technology and other inputs to over a hundred million small farmers”. But this was an impossible goal. The inputs (hybrid seeds, fertiliser, pesticides and irrigation water) are prohibitively expensive. Even the American farming community – the richest in the world – cannot afford them, and has been bankrupted in its attempt to adopt modern technological agriculture. It owes today more than $300 billion to the banks, a sum it cannot conceivably reimburse. How then can poor Third World farmers cultivating their thin and largely eroded lands, possibly afford them?

In any case, once Third World Governments build the necessary dams and associated perennial irrigation schemes, and subsidise, as they have all done, the purchase of fertilisers and pesticides, they will have no option but to export the food thereby produced in order to earn the foreign exchange required for paying the interest on the foreign loans contracted to finance them. Such foreign exchange can never be earned by small farmers who must inevitably be dispossessed and pauperised so as to make way for the export-oriented plantations and livestock rearing schemes that can.

The Green Revolution may well have been a bonanza to the World Bank, Mr Conable and also to the dam builders and the agrochemical industry but it has been a disaster both for the environment and for the rural people of the Third World. As your Bank itself admits in its 1982 Focus on Poverty report, your so-called “rural development programmes” which involve spreading the Green Revolution technology to areas where traditional agricultural methods still prevailed,

“have provided few direct benefits for the landless, for tenants unable to offer collateral for loans and for the ‘near landless’ farmers who find it hard to borrow required inputs and take risks.”

Yet as John Loxley, at one time economic adviser to the Government of Tanzania, notes “these are the very sections of rural society least able to meet the basic needs”, whose satisfaction you have committed yourself to assure.

Your report recommended a more explicitly poverty-focussed orientation. However as Loxley notes, such an orientation could not be reconciled with current banking priority as reflected in the notorious Berg Report, Accelerated Development in Sub-Saharan Africa. So they were simply ignored.

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Urban Housing Programme

Your record on urbanisation or urban housing projects also reveals the total incompatibility between your avowed goals and the satisfaction of your banking priorities. McNamara fully realised the social destruction caused by slum clearance programmes in different parts of the world and sensibly decided to upgrade the slums instead.

The upgraded housing, however, was made available on a commercial basis. As Teresa Hayter and Catharine Watson note, the principle of “full cost recovery” had to be respected, people had to pay for the upgrading otherwise the projects would not be “replicable”. Predictably, the slum dwellers could not pay for the upgrading, and as a result, were pushed out.

The fact is that a large and ever increasing proportion of the poor cannot and never will be able to pay for upgraded housing any more than they cannot and never will be able to pay off the inputs required for technological agriculture. More than half of the inhabitants of the Third World, in fact, live outside the market system. There is no way in which their lot can be improved by bank loans for there is no way in which they will even be able to pay the interest on such loans let alone repay the capital.

Such people you cannot and never will be able to help. All you can do is further impoverish them by financing projects that must deprive them of the basic resources such as the natural forests, the fertile land and the uncontaminated water on which their welfare, indeed their survival, depends and for which the fruits of modern development, even if they could really be made available to them, are no substitutes.

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Tribal Peoples

Another area in which the emptiness of World Bank assurances is only too apparent is in that of your dealings with tribal peoples.

In 1982, the World Bank was seriously criticised for the devastating effects of its projects on tribal people in the Philippines, (see Charles Drucker, “Dam the Chico”, The Ecologist Vol. 15 No. 4) and in Amazonia (see Bruce Rich, “Multi-Lateral Development Banks. Their Role in Destroying the Global Environment”, The Ecologist Vol. 15 No. 1/2). It had to do something to placate public opinion, hence its much heralded publication Tribal Peoples and Economic Development.

In this document, the World Bank undertook not to undertake projects in areas inhabited by tribal peoples “unless the tribal society is in agreement with the project”. It also guaranteed to assure the self-determination of tribal people, respect for their land rights and the maintenance of their ethnic identity and cultural autonomy. These pronouncements were very encouraging. However, as Survival International notes:

“the reality, since then, has been sadly different. Many, perhaps the majority of the Bank’s projects in tribal areas, have been undertaken against the will of the peoples affected (as in the case of the Narmada and the Bodhghat dams). They have led to the rapid takeover of tribal lands and the destruction of identity and autonomy. Some projects have even led to the virtual extinction of whole communities, as among the Surui and Nambiquara in Brazil.” [Survival International News No. 15, 1987.]

How does the World Bank justify this glaring discrepancy between its rhetoric and its action? The answer is that it has not even bothered to. Instead it “has progressively tried to distance itself from its own publication”. Eventually, in September 1986, one of the Bank’s leading lawyers explicitly declared to a Committee of the International Labour Organisation in Geneva,

“that the published policies are not those it observes.”

The Bank’s real policy vis-à-vis tribal peoples, he admitted, is described

“in a confidential document, which is not publicly available.”

In this document, which has been leaked to Survival International, the Bank only talks of “mitigating undesired social effects” – the usual line which in practice means very little if anything at all. As is most abundantly clear the Bank continues to regard tribal people, indeed all people who live outside the orbit of the formal economy, as totally expendable.

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Another area in which the World Bank’s assurances have proved totally empty, is in the field of forest conservation. In your speech you tell us that your bank “is the world’s large single source of financing for tropical forest conservation and development”, that “over the past decade World Bank investments and technical assistance grants in forestry have exceeded one billion dollars,” and that you are “ready to do more”.

Now, most of your forest conservation programmes go under the name of “social forestry”, which is defined by the Gujarat Forest Department as “the creation of forests for the benefit of the community through the active involvement and participation of the community”. This is seen as leading to an improvement of rural environment, to a fall in rural migration and rural unemployment “. . . and to an increase in village self-sufficiency and self-reliance especially with regard to its ‘forest material needs’ “.

This is clearly an admirable idea, but World Bank social forestry programmes do none of these things. To begin with the social forests do not belong to the villagers but almost always to relatively big landowners. Secondly they are not forests, but plantations of fast growing eucalyptus trees, which are of little use to village people, as they produce no fodder for their animals, nor green manure for fertilising their fields. Nor do they provide a suitable environment for game animals, nor do their roots bind the soil together, to prevent erosion. Nor is their timber of any use for making implements.

But even if it were, it would, in any case, never be made available to the villagers, for in order to be funded by the World Bank, these “social forests” must yield a commercial return on the capital invested. This means that they must be sold to pulp mills at a price that villagers cannot conceivably afford.

Worse still the trees which are theoretically planted on wasteland are often planted instead on good agricultural land which once produced food for the villagers. So the “Social Forestry” programmes also increase malnutrition. Even worse still, whereas food production is labour-intensive, the growing of eucalyptus trees requires very little labour after the initial planting period, so social forestry programmes also increase unemployment.

To make matters even worse, the species of eucalyptus planted tend to use up vast quantities of water which reduces water availability to the villagers and, as if this were not enough, many of the displaced workers have no option for earning their living but to strip trees for firewood that can be sold in the nearest urban centres, as a result of which the social forests actually serve to further increase the pressure on remaining reserves. To call such destructive enterprises, “social forests”, Mr Conable, is thus utterly dishonest.

This being so, your threat to further increase your Bank’s finance “for tropical forest conservation and development” is a very alarming one. It is still more alarming when one learns that the World Bank’s Tropical Forest Action Plan is based on the World Resource Institute’s 1985 Tropical Forest – A Call for Action. This plan proposes to save the world’s tropical forests by planting even more eucalyptus plantations and does not even suggest curtailing, let alone bringing to a halt, the massive development programmes funded by your bank and other such institutions, which are the prime cause of tropical forest destruction.

Indeed it is thus clear that the World Bank’s rhetoric regarding its determination to preserve the environment, relieve poverty, protect tribal peoples or preserve remaining tropical forests, has never been translated into the appropriate action. The reason for this does not entirely lie in the perversity of past presidents of the World Bank nor of the present one but in the fundamental conflict between what is often the Bank’s genuine desire to satisfy human, social and ecological imperatives and its requirement, by virtue of being a bank, operating commercially in a competitive economy, to maximise the short-term return on capital.

You tell us, Mr Conable, that “sound ecology is good economics”. Indeed it is, but only if you refer to the sort of economics that involves maximising material benefits over an indefinite period of time which must involve carefully preserving the natural world from which the economy derives its resources and to which it consigns its waste products.

Today’s economics do not make such a policy conceivable. They are exclusively concerned with the maximisation of financial returns in the very short-term which means cashing in the resources of the natural world, as cheaply as possible and at the fastest possible rate. The achievement of such a goal, Mr Conable, clearly excludes the adoption of the “mitigating measures” to which you and your staff constantly refer.

What further suggests the emptiness of your rhetoric, Mr Conable, is your statement that you will “continue to support major investments in energy and infrastructure, industrialisation and irrigation” even though as you yourself imply, such investments have in the past been responsible for such terrible environmental destruction. To imply as you do that by displaying “greater sensitivity” to “long term environmental effects” and by withholding support for projects “where safeguards are inadequate” until presumably acceptable safeguards are provided, you will render them environmentally benign is just wishful thinking.

Consider the Grande Carajas project in which you have invested so much money. It involves converting an area of invaluable tropical forest, the size of England and France combined, into one massive industrial zone. What safeguards can possibly enable you to set up one of the biggest mining and industrial complexes ever conceived of in a tropical forest without destroying it and marginalising its tribal inhabitants?

Consider one of your major infrastructural investments, the Polonoroeste project. You describe it as “an environmentally sound effort which went wrong”. But in what way was it environmentally sound? How could it conceivably have gone right?

You suggest that it could have benefited small farmers but was used instead by loggers, but peasant farmers do not need highways, they produce for themselves and for their families and for sale to local markets. When they produce for export it is nearly always against their will since it is at the expense of producing food crops that they badly need to feed their families and export crops are usually forcibly sold to some government body at but a fraction of their true value.

Still less can a major highway benefit a wilderness area, which it inevitably opens up to every sort of exploitative activity that happens to be economic.

The Colonial powers were never dishonest enough to suggest that the railways, bridges and highways they built were for the benefit of the natives. It was never denied that their object was “to open up” new areas so that our manufactured goods could be made available to their inhabitants and their food and raw materials exported to the metropolis.

In any case it is unlikely that whatever “safeguards” or “mitigatory measures” you envisage will ever be applied. Assurances given by governments to this effect are rarely worth the paper they are written on. The National Parks and Forest Reserves set up in Amazonia by the Brazilian Government to mitigate the effects of destructive development projects for instance, were for short-term public relation purposes only. Thus a substantial portion of the Xingu National Park was lost to make way for the construction of the BR 080 highway in 1971. The Araguaia National Park has also been violated in the same way.

To quote Fearnside and de Lima Ferreira from the National Institute for Research in the Amazon (INPA) “in both cases Brazilian laws guaranteeing the integrity of parks and reserves were simply ignored when the reserves proved inconvenient for road building plans”. In Rondonia, the Guapore Biological Reserve, created in 1982, has shrunk on no less than two occasions to accommodate development schemes.

Presently projected highways will lead to further shrinkages of the reserve and are now almost certain to allow squatters to enter the forest, who will destroy what remains. The Jaru Biological Reserve, set up in 1961, has been even more badly damaged, much of it having been incorporated into the Burareiro Directed Settlement Area, where 500 hectare estates were sold for development as cocoa plantations.

As Fearnside and le Lima Ferreira note, “the reserve has never had a forest guard or staff of any kind, and an undetermined. number of squatters are now clearing within Its boundaries”. Fearnside and le Lima Ferreira provide a long list of highways that have been cut through forest reserves. Even when the latter are not crisscrossed with highways they are reserves in name only. Thus one type of ‘reserve’ can be sold off to private individuals so long as 50 percent of the area is kept under forest, a law that in practice is never enforced, many of such reserves having been totally cleared “with no legal consequences”.

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Irrigation Schemes

Consider too, your major investments in hydroelectric and irrigation schemes. No safeguards or mitigatory measures, however ingenious and however well-intentioned, can do much to reduce the terrible destructiveness of such projects. Nothing for instance will prevent them from flooding vast river valleys where the land tends to be the most fertile and which, in the densely populated Third World, are likely to be inhabited by a large number of people.

Whatever you do, such people will have to be displaced and their lives severely disrupted. As Claude Alvares notes, the million or so tribal people whose lands will be flooded by the dams you propose to finance in the Narmada Valley will be simply sacrificed, and so they must be if the Narmada Dams are to be built. For the cost of resettling them properly, given the terrible shortage of suitable land in the area, would be prohibitive.

Nor can “careful planning and an investment in mitigating measures such as drainage” as your Planning Committee suggests, serve to eliminate water-logging and salinisation, which are the inevitable concomitants of perennial irrigation schemes in the tropics. For one thing it is extremely unlikely that such measures will be adopted. The experience so far is that they almost never are. They are too costly and on the basis of current short-term economic criteria, cannot be regarded as justified. Even when they are adopted they can do no more than slow down the inexorable process of salinisation. As Professor Aloys Michel of the University of Rhode Island Insists,

“water-logging or salinisation, or both problems, will inevitably arise in all but the truly exceptional surface water irrigation system . . .”

Professor Victor Kovda of Moscow University, perhaps the leading authority on the subject, feels the same way. “During many centuries and even millennia”, he writes, “only areas having a free outflow of groundwater as in Tashkent and Samarkand have not undergone salinisation or waterlogging”. In other words, “increasing salinity in irrigated soils on arid lands is practically universal”.

FAO admits that 50-80 percent of the world’s irrigated land is already affected; also that some 10 million hectares of irrigated land – that is about 5 percent of the world’s total – are abandoned each year. Indeed it seems but a question of time before all the land put under irrigated agriculture at enormous human, social, ecological and financial cost, will slowly be transformed into salt-encrusted deserts and eventually taken out of agriculture.

The fact is, Mr Conable, that the only way to avoid the terrible destruction caused by the development schemes that your Bank has so irresponsibly financed over the last 40 years is to stop financing them. There is no alternative. It is not as if these schemes were needed to combat poverty or to improve the welfare of Third World people; they are not. As Alvares shows in the case of the Narmada Dam, such projects only satisfy the short term financial and political interests of a small group of bankers, bureaucrats, industrialists, engineers and politicians.

And this, Mr Conable, brings me to the heart of the matter. The short term interests of such a group are totally incompatible with the long term interests and needs of an increasingly impoverished humanity. You told the World Resources Institute in May 1987 of new policies and new concern for the environment. Will you now signify your genuine concern by immediate cancellation of financial aid for indefensible projects such as the Narmada and Bodhghat Dams and the Great Carajas Project and at the same time reappraise all other World Bank projects using a yard stick which measures the needs of humanity, our children and the biosphere, on whose preservation life itself must ultimately depend?

Only then will you be able to persuade the world that your new concern for the environment is a genuine one.

Yours sincerely,

Edward Goldsmith

Publisher of The Ecologist.

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