The World Bank has helped finance exploitation of oil, gas, coal and other minerals in the developing world, mainly through its private sector lending arm, even though this has rarely advanced the institutions mission of reducing poverty. Indeed, it often makes poverty worse, argues The New York Times in Sundays editorial, according to the World Bank press review Monday.
Three years ago, the banks president, James Wolfensohn, commissioned a panel of experts to investigate how the bank should deal with these extractive industries.
The panel concluded that the bank should stop financing oil projects completely by 2008 and should immediately begin a policy of supporting oil or gas extraction or mining only in countries with a well-established rule of law and effective regulation to ensure projects are well run.
The banks management has already rejected these conclusions, instead promising it will take these issues more seriously when making such investments. The banks board, which will make its final decision this week, is likely to echo that position.
But the management response smacks of business as usual. While it would be unwise for the bank to use the word never, it should embrace most of the reviews recommendations for ensuring that its projects help the poor.
But simply pretending those resources were never discovered is no development strategy. The challenge for the World Bank is to figure out how to help nations in the developing world take advantage of their natural riches, while making sure the poor benefit from them.
Chad, one of the worlds poorest nations, exemplifies why the World Banks presence is desirable in some cases, even absent ironclad rule-of-law guarantees. As a partner in the development of oil fields there, the bank has forced Chads dictator to accept a plan in which revenues are held in escrow abroad and will be directly spent on health, education and road programs.
A revenue oversight committee of citizens is monitoring the process, writes the New York Times.
Kilde: www.worldbank.org
