October 23, 2017

Worshipping at the altar of economic pragmatism

The World Bank has suspended, on environmental grounds, a loan of $256 million for the Polonoroeste [road building and rainforest clearing] Project in Brazilian Amazonia. But the Bank’s President, Alden W. Clausen, continues to “worship at the altar of economic pragmatism”.

Published in The Ecologist Vol. 15 No. 4, July–August 1985.


The World Bank has agreed to suspend, on environmental grounds, a loan of $256.1 million to Brazil to fund the highly destructive Polonoroeste Project in Amazonia. This is truly wonderful news, for, as Bruce Rich of the Natural Resources Defence Council (NRDC) notes, “it represents the first time the bank has ever halted disbursements for environmental reasons.”

Much credit is due to Bruce Rich and the NRDC who are largely responsible for making the World Bank come to its senses on this issue; and to Senator Kasten, Chairman of the Sub-Committee of the Senate Appropriations Committee responsible for financing multilateral development institutions.

The World Bank claims to have taken this decision as early as March. However, it is generally agreed that their hand was forced when Senator Kasten was shown the shameful answer of the President of the World Bank, Alden W. Clausen, to the very important letter addressed to him by Bruce Rich and a host of other leading environmentalists from all over the world, asking him to stop further funding for the Polonoroeste Project.

Senator Kasten wrote to Clausen, told him how shocked he was by his derisive reply and insisted that he invite his critics to a discussion of the environmental implications of the Polonoroeste Project on which the World Bank had already disbursed $178.3 million, after which discussion, Clausen clearly decided to suspend the funding.

There are many reasons however why It may be premature to celebrate. To begin with, the funding has not been cancelled; it has only been suspended until such time as the World Bank receives the necessary assurances from the Brazilian Government that all the appropriate measures have been taken to minimise the environmental impact of the scheme and to safeguard the rights of the local Indians.

Readers of The Ecologist will know only too well that such assurances are not worth the paper they are written on. Indeed the way the Brazilian Government has totally failed to implement past assurances of that sort has been well documented in a recent issue of the journal, Environmental Conservation.

Clausen is well aware of this, but he is, nevertheless, likely to take such assurances as an excuse for going ahead with the loan.

One must remember that in 1977, the World Bank suspended another loan, that time to the Government of the Philippines for the financing of the construction of four large dams on the Chico River.

In this issue of The Ecologist, we publish an article by Charles Drucker of Friends of the Earth in San Francisco, which describes in some detail the full iniquity of this, unfortunately only too typical, World Bank project.

In this case, it must be noted, the funding was not suspended for environmental reasons, but because the project, if it had gone ahead, would have given rise to a veritable civil war.

Indeed, the Kalinga, Bontoc and Kankanai people who inhabit the area that was to be flooded, simply refused to give up their ancestral lands and sabotaged efforts to build the dam. This led to a very brutal response on the part of the Government. The military was introduced. The head of the opposition to the dam, a Kalinga tribesman called Macli-ing Dulag, was gunned down in his house by a squad of soldiers, while other anti-dam protesters were hunted down by the military and forced to go underground.

In spite of this repression, opposition to the dam grew and there were more and more armed confrontations and more and more casualties.

It was under these conditions that the World Bank suspended its loan. It must be noted that it has not been definitely cancelled. Indeed, there is every reason to suppose that Mr Clausen is simply waiting for conditions in the area to settle down so that the loan can go ahead without earning him too much outside criticism.

There are at least three good reasons why this appears to be so.

  • To begin with the World Bank, horrifying as it might seem to the outside observer, continues to finance irrigation works downstream which could never be fully made use of unless the Chico dam were actually built.
  • Secondly, the National Power Company of the Philippines recently wrote to us. That corporation had heard that we proposed to publish Charles Drucker’s account of the Chico Dam In Volume II of the Social and Environmental Effects of Large Dams and asked if we would be interested In publishing a “more balanced view”. That organisation would clearly not have taken the trouble to make that kind of offer If the project had been scrapped.
  • Thirdly, all sorts of other destructive projects threaten the Cordillera where the 500,000 tribesmen live, including a massive 200,000-hectare logging operation to be conducted by the Collophil Resources Corporation (CRC). Plans are also afoot to exploit its important gold and copper deposits.

These massive schemes and the industrial and urban development associated with them, badly require the electricity that the dam would provide. It also appears that Mr Marcos and his business associates have a considerable financial Interest in these ventures and they are not the sort of people to allow a few hundred thousand primitive tribesmen to stand between them and the millions that are at stake.

This being so, it is thus not surprising that Mr Marcos’s army launched (June 27 1984) a major assault on the Chico Valley. T28 planes bombed the Kalinga village of Bugnay, while helicopter gunships and mortars were made use of in attacks on neighbouring villages. An old man in the Kalinga village of Ngitant is said to have remarked: “it is like the Japanese invasion all over again”. [Survival International Urgent Action Bulletin/PHIL/3/Jan85]

A Survival International Press Release (June 27th 1985) informs us that:

“several communities are under siege-like conditions surrounded by troops who are intent on capturing the ringleaders of tribal resistance. Bugnay, in the Kalinga-Apayao region, has been surrounded by troops of the 1st GHO Battalion since 19 April.”

The tribesmen have sent a petition to President Marcos in which they complain of the way the military has taken over their area:

“We are hindered from roaming our own forests for game. We can no longer freely tend our fields . . . If this continues, Mr President, we will surely starve.”

To send such a petition to Mr Marcos is clearly a waste of time. He is interested in one thing only: that the land be cleared of its obstinate inhabitants so that all his schemes may go ahead. If he is willing to murder their leader, bomb their villages, mount a veritable military operation against them why should he be any more scrupulous about starving them to boot?

In any case many are already leaving the area to join the New People’s Army, whose eventual victory might offer some hope of their retaining their lands, while others are drifting off to the slums of the closest cities to join there the throngs of the victims of other large-scale development schemes.

Now it would seem again to the outside observer that the Chico dam is no longer something which a serious and responsible banking institution could conceivably support. Indeed, to do so would be to be party to the whole catalogue of crimes committed by Mr Marcos and his business associates against the inhabitants of the Cordillera. It must be remembered in this context that even the US Government has now recognised the full horrors of Mr Marcos’s dictatorship to the extent that it has recently announced its refusal to supply his army with further armaments.

Clearly, the World Bank to have any credibility whatsoever, must definitively cancel its funding for the Chico Dam and any other large scale projects in this sensitive area.

In reality, the time to celebrate must surely be when the World Bank has totally changed its priorities and has officially recognised that the only way to assure the welfare, indeed the survival of Third World people, is to put an end to the systematic destruction of their societies and their environment, by the sort of large-scale schemes that it continues to finance.

Unfortunately, the decision to suspend further funding for the Polonoroeste Project in no way Indicates that there has been such a change in priorities, it merely suggests that the World Bank wishes to remain on good terms with the Appropriations Committee of the American Congress.

For us to believe that such a change has really occurred, Mr Clausen would have to announce that he has definitely cancelled the loan for the Polonoroeste Project, for the Chico Dam and for other equally, if not even more socially and environmentally destructive, projects that he still continues to fund, such as the Narmada Dam in India and the Transmigration Programme in Indonesia.

However all this is being a little Utopian. Mr Clausen, in the discussion following his key note address to the 18th Annual Conference of the Society for International Development (SID) held in Rome of July 1985, made a highly significant announcement. He said:

“I have no ideology, I only worship at the altar of economic pragmatism”.

This, to one brought up on the aberrant values of our industrial society, may seem to be a perfectly reasonable thing to say but few people have really considered what it implies.

To “worship at the altar of economic pragmatism” is to believe that it is the God-given right to put all resources that a man or an institution may possess to the best economic use – which, in fact, means to assure that it gives rise to the maximum financial return.

To do this means that nothing can any longer be done because it is desirable on social, ecological, aesthetic or spiritual grounds. It can only be done because it is economic, and, unfortunately, as can easily be demonstrated, none of those things that must be done in order to prevent the transformation of our planet into a wasteland full of starving people are in any way economic.

“To worship at the altar of economic pragmatism” is, in fact, to refuse, on ideological grounds, to take that action which everybody knows to be absolutely essential to prevent that transformation, which is already well under way from being completed.

Thus, America is considered today to be the breadbasket of the world. More than half the world’s cereal imports are derived from it, yet as it is now well established (see James Krohe, The Ecologist Vol. 14 No. 5/6) most of its agricultural land, some of which is considered to be the most fertile in the world, will, on current trends, be turned into a semi-wilderness within the next 30 or 40 years.

The reason is that ecologically sound farming is not economic. But is it not in the farmer’s interest, it might be asked, to spend the requisite money on soil conservation? The answer is ‘no’. In the words of Earl R. Swanson and Earl O. Heady,

“an adequate soil conservation plan – as defined by meeting soil loss tolerance levels for 20 years into the future – would increase annualised private net farm income by only about one percent – it is only natural that farmers don’t always find that soil conservation competes with other more profitable Investments that can be made in the farm business.”

In other words, soil conservation is not economic.

But surely they must be forced to conserve their land, because it belongs to posterity? Unfortunately not. If one “worships at the altar of economic pragmatism” as do those who govern America today, then one must accept that farmers have a sacred right indeed a sacred duty to do whatever is economic even if this means progressively transforming their land into a desert.

The same is true at the level of the nation state: that is why B. B. Vohra’s programme for restoring the fertility of India’s land in order to prevent the mass starvation with which that country is faced has never been implemented even though Mrs Gandhi, at the time, agreed to do so. Unfortunately, such a programme would not be economic.

Nor is a serious reafforestation programme, even though everybody knows that it is alone capable of preventing the further drying up of much of the tropics. It is only economic to finance plantations of fast growing exotics that provide few ecological benefits and that have to be cut down and sold for cash as soon as they have reached maturity 10-15 years later, in order to assure their economic viability.

We can continue this catalogue indefinitely. What is certain is that if economic pragmatism is to govern policy in the Philippines then clearly the Cordillera must be cleared of its inhabitants who are an impediment to the economic development of that area. If it is not, then, in terms of today’s current wisdom, the government would be failing in its duty to its citizens, by depriving them of all those economic benefits that would be made available to them, were the resources of the Cordillera to be put to the best economic use.

Lester Brown, in considering the current crisis in Africa, where practically the whole continent is threatened with starvation, writes:

“Narrow economic criteria, such as the rate of return on project investments, are no longer adequate. The continuation of a ‘business as usual’ approach to Africa by the international development community is to, in effect, write Africa off.”

– to sacrifice it, in fact, “at the altar of economic pragmatism”.

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