Focus on the Global South- India - The World Bank on Trial.

The World Bank in India

Since 1949, India has been one of the World Bank’s favourite clients. Historically, it has borrowed more money from the World Bank than any other country; currently, it ranks in the top four, along with China, Russia, and Indonesia. Unlike many borrowing countries, India has also been faithful in paying off its loans -- thus providing the World Bank with an assured, steady return of funds. Without a few reliable clients such as India, the World Bank would be hard pressed to continue its operations.

In its early decades, the World Bank emphasized infrastructure projects. It lent money for dams, canals, railways, highways and other large construction projects. These generally required foreign expertise, so the loan money was largely used to hire foreign multinational firms to build infrastructure. In India, the most infamous of these projects are the Sardar Sarovar dams on the Narmada; these eventually became such a political liability that the World Bank jettisoned them. However, it continues to finance infrastructure -- in fact, it has recently recommitted itself to “high risk, high reward” projects in the vein of Narmada. But in recent years, a far greater share of its lending goes towards policy change.

For decades, the World Bank and its sister institution, the International Monetary Fund (IMF) have pressured borrowing countries to adopt policies that they believed would foster economic growth. These neoliberal policies were a standard package that varied little from country to country; they are also known as the “liberalization, privatization, and globalization” approach. In essence, they push countries to privatize public assets; reduce regulation and state controls on multinational corporations; re-orient their economies away from self-sufficiency and towards exports; weaken labor and environmental standards; and do away with other barriers to concentrations of wealth.

While India accepted large quantities of money for projects, it generally avoided large- scale policy changes until the 1990s. By then, it was heavily dependent on oil imports; when he first Gulf War caused oil prices to spike, India found itself short of foreign reserves to continue importing oil. It turned to the IMF for help, and got it -- but with strings attached. Bowing to external pressure as well as a restive, upwardly mobile, middle class, India began adopting neoliberal policies wholesale.

The World Bank has approved wholeheartedly of the results. India’s once-meagre foreign exchange reserves are now second only to China’s. Economic growth rates are around 8 or 9% per year. The stock exchange is booming, and Indian corporations are becoming global players. For the World Bank, it is the long-awaited vindication of their neoliberal faith (Latin America, Africa, Eastern Europe, Russia and Southeast Asia having all produced spectacular failures with the same policies). What’s not to like?

The Invisible Debate

There is another set of facts that present a less rosy picture. The availability of food rains has fallen to its lowest level since 1973; malnutrition is correspondingly on the increase. Pollution of industrial areas is growing steadily worse. Slum clearance and urban renewal projects are displacing tens of thousands of the poorest urban dwellers. Personal indebtedness is skyrocketing -- farmer suicides being the most obvious symptom. Landlessness, always a problem, is growing. The new economy’s voracious appetite for natural resources has set it on an increasingly violent collision course with adivasis and other rural peoples; increasing numbers are joining the Naxalites or other armed resistance movements. While neoliberalism has generally done well for the wealthy and the urban middle classes, it has also had huge costs. But those costs are generally borne by the marginalized and the disenfranchised, and in particular the poor, and so they quite simply are not recognized.

When India embarked on its neoliberalization project in the 1990s, it occasioned a good deal of furious debate: in the press, in Parliament, in academia and in chai shops. The pros and cons, the winners and losers, were toted up, argued back and forth. Now, that debate has fallen silent. It is as if the debate were settled, no longer worth arguing; or even as if neoliberalism were simply a historical inevitability. Indeed, this is exactly what Margaret Thatcher claimed when she coined her infamous acronym, TINA: There Is No Alternative. It was a transparent attempt to close off debate about this most controversial set of economic policies. At the same time, in the U.S., Reagan’s advisers attempted to do the same thing more subtly by claiming that neoliberal policies were not “political” issues; they were simply “good management.” Nothing to debate here, move along, move along.

The World Bank has all along had its own means of closing off debate: it has attempted to monopolize the conversation about how poor countries should develop. Its staff and consultants publish hundreds of articles and reports annually; it funds even more studies by outside researchers; it has a well-oiled public relations machine; it runs a mini-university, the Economic Development Institute; and it encourages staff exchanges to spread its gospel to other institutions. Perhaps most importantly, it employs some 10,000-development experts -- by far the largest, best-paid and most-prestigious positions in the field of development economics. But unlike a university, the World Bank does not tolerate diversity of opinion within its ranks; its publications are not peer-reviewed; it suffers no external audits. In recent years, it has attempted to formalize this dominance of the debate by enthroning itself as “the Knowledge Bank” -- the single source for all information, knowledge, and theory on developing countries’ economies.

What this means in practice is that alternatives to the Bank’s neoliberal agenda are not merely rejected; they are never even considered. When New Delhi took a World Bank loan to design improvements in its municipal water supply system, there was no debate about what the priorities should be or which of the various models should be employed. The entire design of the project was handed over to PriceWaterhouseCoopers, an international consulting firm and one of the World Bank’s pet contractors. PWC, unsurprisingly, returned a blueprint for privatization, without any mention of alternatives. Not content to dominate the consulting firms and borrowing governments, the Knowledge Bank is reaching further upstream, into universities, to ensure that its ideology is taught as fact throughout the field of economics.

What you won’t find anywhere in the Knowledge Bank are the voices of India’s poor and marginalized. You will have to come to New Delhi to hear them. They will tell you of World Bank policies that have robbed them of farmlands, forests, and homes; emptied their savings, ruined their health, broken up their families; stripped them of their access to clean drinking water, health care, and education; and brought them into conflict with the local moneylender or multinational corporations. Their stories, individually and collectively, are another reality, in direct conflict with the sunny assessments the World Bank likes to tout. In New Delhi, they will return themselves to the spotlight: the poor, in whose name all this development happens, will raise their own voices once again.

To find out more about the Independent People’s Tribunal on the World Bank in India, visit
http://www.worldbanktribunal.org and http://worldbankout.blogspot.com/