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        Date: Tue, 27 Jun 1995 11:45:38 -0400 (EDT)
        From: Competitive Enterprise Institute <cei@access.digex.net>
        To: Recipients of the CEI List <cei@digex.com>
        Subject: CEI List: McNamara's W.B. Fiasco
        Message-Id: <Pine.SUN.3.91.950627114500.5678D-100000@access2.digex.net>
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                        "Robert McNarama's World Bank
                     Record Rivals His Vietnam Fiasco."
                               by Paul Georgia
                         Appeared in +Human Events+
                                June 9, 1995
        
                  Robert S. McNamara may have a sequel in the works.
        In his newly released book, "In Retrospect: The Tragedy and
        Lessons of Vietnam," he apologizes for his part in executing
        the Vietnam War and for the tens of thousands of lives lost
        on both sides of the conflict.
        
                  Unfortunately for Mr. McNamara his penance may be
        just beginning.  In 1968 he was named president of the World
        Bank, a seemingly ideal career move for a man making
        restitution.  After all, the World Bank has the noble charge
        of raising the Third World from poverty to wealth. Yet
        despite this mission, the World Bank is responsible for
        serious human rights abuses, environmental destruction and
        economic stagnation.  The misery, destruction and death toll
        that resulted from McNamara's humanitarian service rivals
        that from his service as a warrior.
        
                  Before 1968 the World Bank was relatively small
        and limited in focus.  However, under McNamara's watch the
        bank changed immensely.  Its growth was astounding,
        expanding from 1,574 to 5,201 staff members while lending
        increased from $953 million to $12.4 billion.  Furthermore,
        the bank took on the aura of an important humanitarian
        organization that would work to eliminate "absolute
        poverty."  This was to be achieved through an ambitious
        program to assist Third World governments in "draw[ing] up
        an overall development strategy which will include every
        major sector of the economy, and every relevant aspect of
        the nation's social framework...." The World Bank of today,
        which loans approximately $16 billion per year, is largely a
        creation of Mr. McNamara.
        
        
                   WORLD BANK FOSTERS REPRESSIVE POLICIES
        
                  Referring to the bank's stated goal, critic Bruce
        Rich of the Environmental Defense Fund writes, "Here, then,
        was a vision of global central planning, based on an
        extraordinary presumption: the staff of the World Bank
        would, through visits of a few days or weeks, combined with
        desk research, take the lead in gathering data to prepare a
        development plan for 'every relevant aspect' of a 'nation's
        social framework.'"  Such grandiose thinking is reminiscent
        of communist pronouncements, and like communism, the bank's
        actions have had horrifying consequences for the people they
        were intended to help.
        
                  In the early 1970s, with World Bank aid and
        advice, Julius Nyerere, president of Tanzania, implemented a
        program of collectivized agriculture, known as ujamaa
        villages.  The military drove 13 million peasants (about 90
        percent of the population) from their land, burned their
        homes, loaded them into trucks, and moved them to new sites
        where they were ordered to build new homes.  The result has
        been declining food production and hunger in a country that
        was once able to feed itself.
        
                  In another case the World Bank helped to initiate
        Indonesia's massive resettlement program to alleviate
        overpopulation.  Between 1976 and 1986 the World Bank
        contributed $600 million directly to the project, which has
        already resulted in the forceful relocation of six million
        people to the tropical rain forests, creating environmental
        problems as well.
        
              Furthermore, the Indonesian government, aided by Bank
        funds, plans to relocate to new sites, all 800,000 members
        of the indigenous tribes' people from the island of Irian
        Jaya by 1998.  Resistance to these plans has been met with
        brutal repression by the Indonesian government. Irianese
        villages have been bombed and in East Timor, resistance to
        resettlement has led to the death of an estimated 150,000
        Timorese at the hands the military.  Tragically those who
        survive the relocation are suffering from destitution and
        starvation because the rain forest does not support
        agriculture.
        
        
                LEAVES ENVIRONMENTAL DEGRADATION IN ITS WAKE
        
                  The list of such World Bank funded atrocities is
        long and not limited to human rights abuses.  Another
        casualty is the environment. Both Brazil and Indonesia are
        suffering serious rain forest depletion due almost entirely
        to the slash and burn agriculture methods of the poor who
        were induced to migrate by force or deception.  Both
        countries received Bank money for resettlement programs.
        
                  In Brazil, the Balbina hydroelectric dam project
        was floundering until the Bank provided a $500 million loan.
        This small 250 megawatt dam, which has flooded 4,000 square-
        kilometers of rain forest, has been a tragedy of epic
        proportions.  Because the area to be flooded was not cleared
        of vegetation, decomposition depleted the river's oxygen,
        producing hydrogen sulfide gas and making the water highly
        acidic. Moreover, many of the decomposing plants were toxic.
        The result was the poisoning and complete death of the
        Uatuma river.
        
                  Thousands of people whose livelihood depends on
        the river for fish, irrigation, and drinking water are
        destitute now.  An epidemic of skin rashes, intestinal
        disorders, headaches, and nausea as well as malaria have
        broken out.  After the Brazilian government relocated the
        Waimiri-Atroari Indians away from the reservoir sight, their
        population dwindled from 3,500 to 374.  Those left are
        mostly children.  Absent Bank funds, this debacle may never
        have happened.
        
        
                      BANK BUREAUCRATS SEEK MORE POWER
        
                  The World Bank's record has given rise to intense
        criticism and calls for reform.  However, the Bank's
        previous attempts at reform have proven futile.  One reason
        is the incentives that World Bank officials face.  One Bank
        official has been quoted as saying: "We are like a Soviet
        factory.  The push is to maximize lending.  The...pressures
        to lend are enormous and a lot of people spend sleepless
        nights wondering how they can unload projects."  An internal
        audit done in 1987 concluded that "the drive to reach
        lending targets...is a major cause of poor project
        performance."  World Bank bureaucrats seem to have one
        overriding goal; to expand the size and power of the World
        Bank.
        
                  Perhaps, in his next book, Robert McNamara will
        admit the folly of the World Bank's actions and admonish the
        United States to cease providing 20% of the bank's capital
        base.  Maybe he will explain that our leaders have failed to
        learn from the socialist failures of the World Bank.
        Central planning, international wealth redistribution, and
        coercion cannot lead to economic development.  When
        implemented on a global scale, these principles destroy
        freedom and economic opportunity, just as they do on the
        national scale.  This is the unpleasant, but unavoidable
        lesson of the World Bank.  I for one look forward to Robert
        McNamara's next book.
        
                              ----------------
        Paul Georgia is a Research Analyst at the Competitive
        Enterprise Institute and author of "The World Bank's Trail
        of Sorrows."
        
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