Courtesy of:
American Lands Alliance
726 7th Street, SE, Washington, DC 20003
www.americanlands.org
Headquarters: Washington, DC
Established: 1944
Membership: Approx. 181 countries
Staff: Approx. 9,500
President: James Wolfensohn
Functions: Lending money and funding projects in needy countries for the stated purpose of economic development. Loans are conditioned on fundamental changes to the recipient country's economic and social policies.
What is the World Bank? The World Bank is the successor to the International Bank for Reconstruction and Development (IBRD) founded in 1944. The World Bank, the International Monetary Fund and the General Agreements on Tariffs on Trade (predecessor to the World Trade Organization) are known as the Bretton Woods Institutions.
Over the years, the World Bank has experienced "mission creep" ‹ changing its organizational purpose as it activities become obsolete. The Bank was originally charged with making loans to rebuild the infrastructure of war-torn Europe. With the arrival of the Marshall Plan, the Bank shifted focus to the developing world. Today, the World Bank ‹ comprised of the IBRD and the International Development Association (IDA) ‹ is the world's largest source of development assistance, providing nearly $30 billion in loans annually for projects and for "programs to help governments change the way they manage their economies."
The Bank requires countries to make fundamental changes in their economic and social policies in exchange for its loans. The extensive adverse impacts of these conditions, as well as the social and environmental damage caused by Bank-funded mega-projects, have led a broad coalition of environmental, labor, women's, human rights, economic justice and other groups to oppose World Bank policies.
Conditionality/Structural Adjustment Programs Loan conditions come in the form of Structural Adjustment Programs (SAPs) designed to ensure that recipient countries are more hospitable to foreign investors and pay back their loans. SAPs include requirements that governments relax restrictions and regulations on trade, investment and business activity and reduce spending. Government spending cuts are most often made in environmental protection, provision of basic services such as health care and education, and worker protection. Rather than creating financially independent nations, the Bank begets a spiral of dependence in which countries become so indebted that they spend most of their money to pay-off loans rather than to encourage development. Of the $16.8 billion the World Bank disbursed to Sub-Saharan Africa from 1990-1995, nearly two thirds was returned to the Bank as payments on earlier loans. Furthermore, the 52 poorest nations in the world pay the same amount in debt service as they spend on health and education combined.
U.S. Government Influence Over the World Bank
The U.S. government has tremendous influence over World Bank policies because it is the largest contributor to the Bank's resources. This contribution gives the U.S. government veto power over the Bank's most important decisions. The U.S. Congress controls the flow of U.S. money to the Bank. Therefore, YOU can use your influence with your Representatives to push for fundamental reforms (or de-funding) of the Bank.
How World Bank Policies Destroy Forests
Funding of Mega-Projects, Structural Adjustment Programs and Debilitating Debt.
World Bank funding of mega-projects for transportation, energy, agriculture, and other purposes has been characterized by a near complete disregard for social and environmental impacts. The result has been massive deforestation, soil erosion, desertification and displacement of indigenous populations. Deforestation has occurred in some of the world's most biologically rich and endangered forests including the rainforests of Brazil, Indonesia and Malaysia. The projects have contributed to the very cycle of underdevelopment and instability that they are supposed to alleviate.
The Bank's focus on export-led growth emphasizes cash crop production which has led to the clearcutting of millions of acres of ancient forests and dislocation of indigenous populations. The results are identical for the Bank's massive transmigration schemes that force poor people from densely populated areas to tropical forest regions. To attract foreign investment, the Bank encourages increased subsidies to foreign timber corporations, while the debilitating debt experienced by most recipient nations makes it nearly impossible to fund environmental protection programs. The combination of increased subsidies to timber corporations and reduced environmental spending means unsustainable logging in the world's most endangered forests.
In 1991, under intense pressure from citizens groups, the Bank adopted a new forest policy. In an internal review of the policy released this year, the Bank found that it had failed to implement its own policies, failed to protect forests and failed to help the poor. The forest policy was largely ignored by Bank staff even though the report found that liberalization and globalization have been major pressures on forests. While the 1991 reforms marked a step in the right direction, the Bank has a long way to go to protect forests from its own policies.
CASE STUDIES
Brazil: A $443 million Bank loan to the Polonoroeste project built a 90-mile highway that destroyed rainforests across the Amazon, attracted an influx of over 400,000 settlers in to the rainforests, and spurred exponential deforestation in the state of Rondonia.
Chad/Cameroon: In partnership with three of the worlds largest oil companies, the Bank is funding a multibillion dollar oil project planned for completion next year that includes drilling over 300 oil wells in southern Chad and a 600 mile pipeline through ecologically fragile rainforest areas in Cameroon, including an area that is the home of a Pygmy minority.
Indonesia: A Bank-funded transmigration program destroyed nearly 25,000 square miles of tropical forests and moved 3.5 million people into the forests between 1976 and 1986.
Malaysia: $152 billion in Bank loans to Malaysia between 1968 and 1982 promoted the clearing of 1.3 million acres of tropical forest land for export agriculture.
WHAT YOU CAN DO
American Lands is working with a broad network of citizens groups to raise awareness about the devastating policies of the World Bank and its partner institutions the IMF and the WTO. Here are just a few of the ways that you can get involved: (1) Come to Washington, DC April 10 - 17 2000 for American Lands' Congressional Lobby Week and be a part of the international convergence on the IMF/World Bank. (2) Join our International Trade and Forests E-mail List Serve. (3) Learn more! contact Antonia Juhasz at antonia@americanlands.org or (202) 547-9230.
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American Lands Alliance
726 7th Street, SE, Washington, DC 20003
www.americanlands.org