The World Bank should focus on promoting economic growth rather than social policies as the route to reducing poverty, the Banks internal watchdog said. The report by the Banks Operations Evaluation Department – an independent unit that analyses the Banks lending – criticizes the emphasis placed on education and health spending under James Wolfensohns leadership.
Coming two weeks before Paul Wolfowitz takes over as president, the report calls for broad changes in the way the Bank works. The record suggests that more attention should be paid to the growth agenda. Just getting spending up in the social sector is not enough for poverty reduction, said acting OED director Ajay Chhibber.
The report calls on the Bank to re-focus its efforts on infrastructure projects and urban and rural development. It said the record shows the private sector has not provided adequate financing for infrastructure projects.
Jim Adams, the Banks vice-president responsible for country operations, welcomed the report, saying:
– It is the OEDs job to use its bully pulpit on the way we should go forward. It is the OEDs job to be critical on what the Bank does. Adams said the increased focus on growth and infrastructure projects was something the Bank had taken on board over the past 18 months.
Poor countries have demanded more lending for power, road, water and telecommunications projects. The report suggested the Banks focus on social spending reflected the desires of donor countries.
The OEDs Annual Review of Development Effectiveness is based on analysis of Bank projects over the past 15 years. The report suggested that education and health projects failed to reach the poorest people and said there had been inadequate assessment of the impact of those expenditures.
Adams said the Bank did not apologize for its focus on health and education spending, but added that there was room for great improvement. – You cannot deal with all the issues on day one. What the report says, correctly, is that we should now focus more on the quality of those projects, he said.
The report also highlighted “inconsistencies” in the way countries were treated, saying that richer post-conflict ones received up to nine times more assistance as poorer post-conflict ones.
It pointed to the high level of support for Bosnia-Herzegovina, East Timor, and the West Bank and Gaza in the 1990s compared with Africa. Iraq is also set to receive heavy support from the Bank, when its security situation allows.
Deputy Assistant US Treasury Secretary Tony Fratto said that “the report underscores the need for the World Bank to focus on economic growth as the most effective way to raise people out of poverty, and that we need to measure results at every level to understand and improve the effectiveness of programs.”
Fratto said that while improving health and education is important, “creating growth through the private sector is the only way to permanently raise living standards. The report acknowledges that the World Bank does not bear the sole responsibility of poor growth in regions such as sub-Saharan Africa and places some blame on corruption for impeding growth.
But the Bank should develop better ways to determine whether aid is actually being used for its intended purpose, the report said.
Jim Adams said a separate World Bank report finds that the success rate of its projects has increased from 15 percent in 1993 to 63 percent today. Adams said the Bank has also recognized the need to increase spending on bridges, dams, ports and roads and will spend 1 billion dollar (5,8 milliarder DKR) more on those projects this year.
As for Africas failure to grow, Adams said the region has been plagued by conflict and countries that do have good policies in place, such as Uganda and Mozambique, are able to grow.
Still, the internal audit stressed that the emphasis on poverty reduction in the poorest countries has shown few proven results and there is a need for greater assessment and accountability.
Kilde: www.worldbank.org
