Arranology

Archive for December 10th, 2006

The World Bank Report: What Does it Really Mean?

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I don’t know what to call this: Ironic? Naive? A joke?

Despite an intensified campaign against poverty, World Bank programs have failed to lift incomes in many poor countries over the past decade, leaving tens of millions of people suffering stagnating or declining living standards, according to a report released Thursday by the bank’s autonomous assessment arm.

“Autonomous” in this case has to be translated as “clueless, out of the loop”. You see, what the “autonomous assessment arm” is criticizing happens to have been the goal of the World Bank from the beginning.

Among 25 poor countries probed in detail by the bank’s Independent Evaluation Group, only 11 experienced reductions in poverty from the mid-1990s to the early 2000s, while 14 had the same or worsening rates over that term. The group said the sample was representative of the global picture.”

Achievement of sustained increases in per capita income, essential for poverty reduction, continues to elude a considerable number of countries,” the report declared, singling out programs aimed at the rural poor as particularly ineffective. Roughly half of such efforts from 2001 to 2005 “did not lead to satisfactory results.” During that period, new World Bank loans and credits aimed directly at rural development totaled $9.6 billion, or about one-tenth of total bank lending, according to the group.

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[T]he study found that growth has rarely been sustained, exposing the most vulnerable people — the rural poor — to volatile shifts in their economic fortunes. Per capita income rose continuously from 2000 to 2005 in only two in five of the countries that borrowed from the World Bank, the study reported, and it increased for the full decade, from 1995 to 2005, in only one in five.

The study emphasized that economic growth is, by itself, no fix: How the gains are distributed is just as important. In China, Romania, Sri Lanka and many Latin American countries, swiftly expanding economies have improved incomes for many, but the benefits have been limited by a simultaneous increase in economic inequality, putting most of the spoils into the hands of the rich and not enough into poor households, the study concluded.

“But..but…but…that’s what we wanted to do!”Indeed.

In a terrifying and important new book, Confessions of an Economic Hit Man, John Perkins, who for 30 years negotiated a lot of those deals in Third World countries while working for an international consulting firm on behalf of the World Bank and the International Monetary Fund, lets the cat all the way out of the bag – making poor countries poorer was precisely what the WB and IMF intended to do – and for very good reason, at least from their perspective.

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Written by Mick

December 10, 2006 at 10:33 am

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