World Bank Official Looks Back 50 Years And Also Looks Ahead
TAKING stock this month of its first 50 years as the globe's most important financier, the World Bank is setting new goals for the decades ahead.Skip to next paragraph
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As the biggest source of development funding - now doling out roughly $20 billion a year - the bank has supported about 6,000 projects in 140 countries with more than $300 billion in financing. Bank forecasters project that it will make roughly $200 billion in fresh money available in the next decade alone.
Armeane Choksi, a World Bank vice president who chairs the committee to commemorate the institution's anniversary, is at the center of what he and his colleagues call ``a reorientation'' from the bank's past. The World Bank was founded in 1944 to help the world recover from the social and economic ravages of World War II.
Among the bank's top priorities for the next century:
* Financing economic reforms and poverty reduction.
* Helping the poor contribute to economic growth by offering expanded programs for education, health care, nutrition, and family planning.
* Protecting the environment.
* Stimulating the private sector.
* Reducing the role of government.
Mr. Choksi notes the ``huge surge of financial flows going mostly to about 20 countries.'' The World Bank, he says, ``would very much like to see a broader distribution'' of those investment funds. But for that to happen, more developing countries would have to undertake greater economic reforms.
Governments that are clinging to failing policies will prove to be among the bank's toughest challenges. ``When developing countries make budget cuts,'' Choksi says, ``they reduce public expenditures [for the poverty-stricken]. You don't see [poorly run, government-owned] airlines or hotels or inefficient steel plants closing.''
``Big labor and big business have vested interests in the status quo.... It is very difficult to eliminate ... these `anti-poor' policies,'' he adds.
Choksi insists that despite these entrenched approaches, the bank will prevail on governments that are interested in new loans. ``When we discuss fiscal reform, a very important part of our discussion is preserving social-sector expenditures and ... reallocation of expenditures,'' Choksi says.
The bank will also take aim at borrowers who are pursuing reckless monetary policies. ``Tremendously high inflation is a tremendous regressive tax, creating visible cleavages between rich and poor,'' Choksi warns. ``Bringing inflation down is a fight against it.''
Choksi says he hopes that dispensing advice and technical assistance that is more ``country specific'' will better channel bank loans. In helping guide governments through the transformation of state-owned enterprises into privately held firms, ``there is a menu [of options],'' he says. ``We encourage countries to explore new avenues to privatize the manufacturing sector, airlines, tourism, infrastructure, telecommunications, and power. Simply because industries are large doesn't mean they should be run by governments.''
THE bank will not be timid about taking on government ``clients'' to push for change on behalf of the poor, Choksi says. ``You need strong leadership and political commitment for any kind of reform,'' he says. ``There will be great difficulty in reallocation of money from higher education and hospitals to basic education or public health. All of our studies of India, Asia, and Latin America indicate that the rich benefit from these huge subsidies.''
Blasted by critics who blame it for helping governments implement policies that have led to ecological degradation, the bank now factors environmental considerations into its loan decisions; it also fashions finance projects for pollution cleanup. Choksi, who concedes that the bank made some very environmentally costly mistakes in the past, says he is hopeful about a more responsible future role.