WORLDBANK - SUSTAINABLE DEVELOPMENT ? (@Vaggi 1993,Wiederstein 1994)

In the 1944 Bretton Woods conference, some industrialized Western countries decided to set up two institutions - the International Bank for Reconstruction and Development (IBRD) and the International Monetary Fund (IMF) in order to avoid currency
instabilities ruining World economy in the 30s. Both institutions are based in New York and operating since 1946, the World Bank is concerned for long-term development and the IMF for short-term currency stability. For some years mainly operating in
postwar Europe (as an instrument of "containment" against communism) the World Bank has evolved to become the world's biggest investor in development projects (24 billion US $ in 1993). Nevertheless in recent years there have been several criticms on
World Bank policies:

- undemocratic design: the World Bank is designed as a stock company, that means each country has a certain number of shares proportional to the amount of capital paid in. So the bank is de facto controlled by economically potent countries (US ca.
20%, Europe 30%, Japan 10%). Small countries are bound into voting groups which have to settle down on an unanimous vote (otherwise the voting group's vote is counted as abstention).
The stock company design means also that the World Bank is not bound to publish all information available on projects undertaken.
- debt crisis: although World Bank credits sometimes have a lower interest (IDA credits) than commercial bank credits,
they (and interests) have to be paid back. In the 80s, this has led to the situation that most developing countries spend more money on
clearing their debts than they received as fresh credits: World capital transfers have been from the developing countries to the developed countries since 1983-84 (155 billion US $ between 1984-90). In the context of this "debt crisis" Mexico was the
first country to declare bankruptcy (moratorium to debt payments) in 1982. Since then, some debts have been alleviated, but the debt prpblem is still very severe in most Latin American countries, the Philippines and Nigeria.
- austerity politics: this includes the above-mentioned World Bank, the IMF and the GATT (also founded shortly after World War II). To become member country of the latter, and to receive further IMF/World Bank payments
(many developing countries become dependant on after the debt crisis), most developing countries
have to marketize their economies, which means reduction of the state sector, privatization of state enterprises as well the removal of state subsidies on basic foodstuffs. These measures can be very painful for (especially urban) poors in these
countries. Liberalization (e.g. of Laos timber industry, which is demanded in exchange for a 5 million $ credit) can also be very harmful for natural environments.
- type of projects: as common to most development projects, money often isn't spend very efficiently and sometimes even harmfully. An example of very ambivalent or even harmful spending are huge dam projects, accounting for some 10% of the
entire world bank spending in the 80s. Huge dam projects in China include Sichuan's Sanxia and Henan's Xiaolangdi. Although in this project with a World Bank participation of 30%, the number of persons to be relocated (170,000)
is "only" one tenth of the Three gorges project, most of the money goes to German, Italian and French construction companies (it is World Bank policy that World Bank projects must have international tendering).

So many environmental groups demand a redesign of the bank's design and credit policy as well of IMF's an GATT's guidelines.