Aid to East: Don't Forget the Environment

THE United States and over 30 other nations are racing to establish a new $12 billion multilateral development bank for redevelopment of Eastern Europe's tattered economies. The new bank must not, however, be allowed to contribute to further degradation of Eastern Europe's environment. Past experience, particularly involving the World Bank, has shown that many activities supported by multilateral development banks cause grave ecological harm. Reforming multilateral lending procedures for environmental protection has been an uphill struggle.

In setting up the new European Bank for Reconstruction and Development in Eastern Europe, participating nations, like the United States and the United Kingdom, now have the opportunity to do a responsible job from the start. They can declare environmental protection, restoration, and enhancement as primary goals of the new bank and establish procedures to accomplish these objectives. Moreover, by ensuring that the new bank's practices are reviewable by local communities, creation of the bank might in itself further strengthen participatory democracy in Eastern Europe.

The democratization of Eastern Europe has been accompanied by worldwide recognition that centrally planned economies are at least as damaging to the environment as market economies, if not worse. Reports are commonplace of record levels of toxic metals in soils, widespread respiratory disease, dying forests, and surface waters too filthy for even industrial use.

Western nations and industries are rushing to channel economic assistance to Eastern Europe. But if investments are not carefully planned, new Western loans and credits may place new stresses on overburdened Eastern environments.

What needs to be done? The United States, working in concert with European nations that have shown environmental leadership, must insist that strong environmental standards be built into the new bank's statute and by-laws.

In its governing statute, the bank should have environmental protection, enhancement, and restoration stated as fundamental objectives. To be effective, future economic developments in Eastern Europe must be accompanied by significant reductions in pollution. Presently, environmental damage is estimated to lower Poland's gross domestic product by between 10 and 20 percent.

Dramatic increases also are necessary in the efficiency of resource use. The Eastern countries are estimated to consume 2 1/2 times as much energy per unit of gross domestic product and twice as much water when compared to member states of the European Economic Community.

The United States should insist that environmental objectives be translated into environmental practice. The bank should assign environmental responsibilities to an executive vice-president or senior official, hire trained staff to conduct environmental analyses, and require stringent environmental assessments to be performed for sector-specific bank lending policies (for example, energy, agriculture, and transportation) and for individual projects. Timely public access to environmental information must be given an especially high priority. The environmental impacts of prospective bank actions must be fully disclosed to the public before final decisions are made, so that bank officials can have the benefit of the views of affected local communities, communities in neighboring states, and concerned nongovernmental organizations.

Many of the current environmental horrors of the east, often regarded in the past as state secrets, are only now coming to light. It would be a sad irony for the Western democracies to create a new development bank whose decisionmaking was closed to the public.

The new bank should assign high priority to energy efficiency projects (including investments in efficient motors, lighting systems, and insulating materials), and environmentally sound agricultural activities. The bank should not allow production or use of pesticides that are banned or severely restricted in donor countries.

Eastern Europe's severely degraded environment graphically demonstrates the price of unsustainable development practices. It is time for a new beginning in Eastern Europe, by establishing an imaginative bank which is environmentally progressive and which contributes to participatory democracy.

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