24 September 2002

Africa: World Bank/IMF to Meet Amid Protests From Many Quarters.

Washington, DC — The World Bank and IMF Annual Meetings that begin in Washington this week, will again take place behind heavy security fences and police lines designed to protect delegates from chanting protestors intent on disrupting their proceedings.

But many of the critics are also becoming increasingly adept at pressuring these institutions on the inside, sometimes through member governments who can exert substantial influence on their operations.

This year some of the most vocal critics argue that the bank and IMF are doing too little on issues such as debt relief, poverty reduction and education in Africa.

Others complain that both institutions, and particularly the World Bank, spend billions of dollars on projects that produce no concrete, visible results.

The Fund and the Bank disagree. They have generated hundreds of reports documenting specific results in Africa on issues ranging from river blindness and HIV/Aids to trade and economic integration.

The IMF, officials noted this week, provides hundreds of millions of dollars in lending to Africa and has opened regional Technical Assistance Centers in Dar es Salaam and Abidjan. It has plans to open three more centers designed to build local capacity for economic and financial management.

Officials here in Washington this week also focused attention on the World Bank's key role in building a climate for investment in Africa, underscoring its support for projects related to Nepad and its pro-active challenge to the HIV/Aids pandemic.

The bank has pledged to spend $1 billion addressing the HIV/Aids crisis in Africa over the next few years. In 2002, the bank's International Development Association (IDA) is providing a record $3.8bn in zero interest, long-term development loans to Africa. is devoting substantial resources to regional based infrastructure development and is specifically focusing on education initiatives.

But in a world of declining overseas development aid, the World Bank has also joined the IMF in focusing greater attention on promoting private capital flows to Africa. According to its recently released annual report, the World Bank will devote more than $1bn this year on programs focused on economic management, financial and private sector development and trade and integration issues.

Another $850 million of the funds allocated for Africa this year will go toward public sector governance issues - themes which are often considered essential precursors for foreign investment.

The biggest African World Bank projects in 2002 include a $450m program to promote private sector development in the Democratic Republic of the Congo, a $220m loan to support a road building program in Ghana and a $183m program to provide 25 villages in Tanzania, situated, along the Songo Songo Gas pipeline, with access to electricity and clean water. These sums do not include an additional $462m provided by the World Bank's International Finance Corporation to private sector investment in Africa or the political risk insurance provide by the Multilateral Investment Guarantee Agency which has an Africa portfolio totaling $792m this year.

The impact of these programs, however, is the subject of much debate. Conservatives, including some officials within the U.S. Treasury Department, argue that money is spent on projects that have few measurable results. Money is expended for building schools, health clinics or laying down water pipes for safe drinking water, but few people ever go back to count up how many new students have been enrolled, how many additional people have access to medicines and how many more people have access to water.

The Bush administration insists that this approach has to change. The U.S. is now reportedly threatening to withhold 20 percent of the U.S. contribution to the IDA facility until it adopts a "performance-based" approach to disbursement of aid resources that ties the provision of assistance to particular results such as more students in schools, more medicines disbursed in clinics or more people with access to safe water.

The U.S. also believes that these programs are best implemented when governments contract out the provision of services to either private companies or non-governmental organizations.

Other critics such as Demba Moussa Dembele, the director of the Forum for African Alternatives in Dakar, reject the efforts to further privatize provision of essential government services.

Past privatization efforts in Africa have done nothing to help the poor, he told this reporter, in an interview with allAfrica. He sees no reason to believe such a strategy would work in the future.

In the last decade the World Bank has provided more than $20bn in no interest, long term loans to Africa with very few results. "Never has poverty been so high as it is today in Africa," argued Dembele. "They have brought poverty and have destroyed our economies."

It is true that both the absolute number and the percentage of people living in extreme poverty in Africa has risen in the last decade, according to the World Bank's own figures.

Dembele is not alone in his criticism of the projects of the World Bank and its subsidiaries. In Chad a member of parliament joined more than a hundred civil society groups in protesting the Chad-Cameroon Pipeline project that is partly funded by the World Bank, citing environmental and other concerns.

In Uganda, a large dam project has virtually ground to a halt after a complaint by civil society groups resulted in an investigation that uncovered corruption in the contracting for the project.

And in Lesotho the courts have just convicted for bribery related to winning contracts, one of the major western companies involved in the huge dam building Highlands Water Project.

Bank officials argue, nonetheless, that they cannot be held primarily responsible for these problems, which are ultimately the responsibility of governments and many other actors. Indeed, several officials this week indicated, on condition that they not be identified, that the bank is itself often involved in efforts to pressure local governments to be more transparent, to address issues of governance and to spend more money on addressing poverty related issues.

They point out that the bank has learned from its mistakes and that new programs such as the Poverty Reduction Strategy Paper process have resulted in dramatic increases in spending on social services in several African countries.

World Bank officials add that they have been responsive to criticism, pointing out that the debt relief initiative has changed several times as a result of pressure from civil society groups that are part of the Jubilee movement.

But the biggest changes may come as a result of pressure from the U.S. government, which is the largest single contributor of resources to the bank. Officials at the meetings that begin this week in Washington will be considering a draft version of the World Development Report for 2004 that relies on "performance-based" aid disbursement programs advocated by the U.S. government.

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