World Bank


"...the World Bank's stated mission [is] "Fighting poverty with passion and professionalism"... the poverty-fighting bit is the public relations campaign of the World Bank under Wolfensohn and not its real purpose... many powerful corporations have benefited so handsomely from Bank policies and project around the world...

"During the long years of the Cold War, if you ruled a country, had your hand out, and promised to kill communists (or anybody you called a communist) you were in good shape for clinching a big loan from the Bank... Even boring dictators like the faceless juntas in Argentina got lots and lots of loans... two-thirds of its history, the World Bank did not reveal much about its lending... In Central America, the Bank plowed through pristine wilderness to build huge dams that silted up and never worked right. In Africa whole towns were cleared away for highways that went nowhere and then fell apart. In Asia, multi-million-dollar irrigation projects watered swampy wetlands... the Mobutus of the world made off with the proceeds.

"Since few of these undertakings were wise investments... the debt accumulated in the Bank's client countries... To stave off the looming epidemic of national bankruptcies, the Bank devised its structural adjustment loans (SALs)... these loans only made the problem worse...

"The issues of governance, corruption, labor standards, and human rights remained out of bounds, however, where they remain to this day...

"Sociologists often emphasize a subtlety that continually escapes the Mallabys and the Wolfensohns: Poor countries are always run by rich people! Why the Mallabys never notice this is beyond me...

"The same people who have been handing over the wealth of their countries to rich First Worlders in exchange for a commission of their own since Columbus first bought an Indian chief for Queen Isabella. Economic growth does not change this. And as the rip-off becomes bigger and broader, the ranks of the poor grow larger too. When the poor grow restive and boring and communist, rich people in poor countries secure themselves with the Mobutus, the Suhartos, and Banzers [basically right-wing fascists], so beloved of the World Bank...

"...the truth about the Uganda caseis instructive. The $530 million Bujagali dam project there was partly funded by the private-sector finance arm of the World Bank through a loan made directly to the Virginia-based AES Corporation. The corporation's founder, Dennis Bakke, was a charismatic chief executive with whom--according to Malloaby--Wolfensohn enjoyed schmoozing. AES won the contract to build the dam without a competitive bidding process and the agreement between the Government of Uganda and AES was secret. When an independent review conducted by the Prayas Energy Group opened the agreement, it concluded: "The World Bank's Bujagali dam project in Uganda is excessively expensive. The Power Purchase Agreement of the private project is not in line with international standards, and entails massive extra cost for Uganda. The World Bank has gien poor advice to the Ugandan government, and has misled the public about the cost of the project." The deal would increase Uganda's debt burden and produce energy that few locals could afford...

"In the Bujagali deal the real issue is corruption and not, strictly speaking, environmental damage, although that too is ugly...

"...NGOs acted in the same way that the FBI did when it went after Al Capone: The agency put Capone away for tax evasion because it couldn't get him for murder and racketeering. Same with the NGOs: Because there are no meaningful safeguards against conflict of interest, human rights violations, or corruption at the Bank, the NGOs stopped Bujagali for environmental violations" (Gabriela Bocagrande. "That Other Dubya." Texas Observer, 1/7/05: 12-13, 32).


"Last summer, in the lull of the August media doze, the Bush Administration's doctrine of preventive war took a major leap forward. On August 5, 2004, the White House created the Office of the Coordinator for Reconstruction and Stabilization, headed by former US Ambassador to Ukraine Carlos Pascual. Its mandate is to draw up elaborate "post-conflict" plans for up to twenty-five countries that are not, as of yet, in conflict. According to Pascual, it will also be able to coordinate three full-scale reconstruction operations in different countries "at the same time," each lasting "five to seven years."

"Fittingly, a government devoted to perpetual pre-emptive deconstruction now has a standing office of perpetual pre-emptive reconstruction...

"But if the reconstruction industry is stunningly inept at re-building, that may be because rebuilding is not its primary purpose. According to Guttal, "It's not reconstruction at all--it's about reshaping everything." If anything, the stories of corruption and incompetence serve to mask this deeper scandal: the rise of a predatory form of disaster capitalism that uses the desparation and fear created by catastrophe to engage in radical social and economic engineering. And on this front, the reconstruction industry works so quickly and efficiently that the privatizations and land grabs are usually locked in before the local population knows what hit them...

"The World Bank and the International Monetary Fund have been imposing shock therapy on countries in various states of shock for at least three decades, most notably after Latin America's military coups and the collapse of the Soviet Union. Yet many observers say that today's disaster capitalism really hit its stride with Hurricane Mitch. For a week in October 1998, Mitch parked itself over Central America, swallowing villages whole and killing more than 9,000. Already impoverished countries were desparate for reconstruction aid--and it came, but with strings attached. In the two months after Mitch struck, with the country still knee-deep in rubble, corpses and mud, the Honduran congress initiated what the Financial Times called "speed sell-offs after the storm." It passed laws allowing the privatization of airports, seaports and highways and fast-tracked plans to privatize the state telephone company, the national electric company and parts of the water sector. It overturned land-reform laws and made it easier for foreigners to buy and sell property. It was much the same in neighboring countries...

"Now the bank is using the December 26 tsunami to push through its cookie-cutter policies. The most devastated countries have seen almost no debt relief... Rather than emphasizing the need to help the small fishing communities--more than 80 percent of the wave's victims--the bank is pushing for expansion of the tourism sector and industrial fish farms. As for the damaged public infrastructure, like roads and schools, bank documents recognize that rebuilding them "may strain public finances" and suggest that governments consider privatization (yes, they have only one idea)...

"As in other reconstruction sites, from Haiti to Iraq, tsunami relief has little to do with recovering what was lost...

"In January Condoleezza Rice sparked a small controversy by describing the tsunami as "a wonderful opportunity" that "has paid great dividends for us"... If anything, Rice was understating the case" (Naomi Klein. "The Rise of Disaster Capitalism." The Nation, May 2, 2005: 9-11).


Colby Glass, MLIS