U.S. Urged to Reject New World Bank Focus on Large Infrastructure

Originally published in Inter Press service (IPS)

WASHINGTON, Mar 19 2013 - A group of environmentalists, gender activists and international finance watchdogs are calling on the U.S. government to support calls for the World Bank to step back from a new programmatic focus on large-scale infrastructure, which critics say does little to help alleviate poverty.

The call comes just ahead of a major funding meeting, to be held Mar. 20-21 in Paris, of donors to the International Development Association (IDA), the World Bank’s fund for the world’s poorest countries. In a background briefing released earlier this month outlining priorities for the IDA meeting, the bank includes a new thematic proposal to fund large-scale infrastructural projects.

Almost 100 percent of jobs went to men, not only in building the coal plants and mines but even office jobs, while women lost jobs.

In discussing examples of what it calls regional transformational initiatives, referring to large projects with cross-border scope, the brief notes proposals for large, multi-billion-dollar dams in Africa and South Asia, among others.

“Based on decades of experience, we believe that the complex regional projects that IDA proposes risk undermining important goals of [the current IDA negotiations], including Inclusive Growth, Gender Equality, and Climate Resilience,” states a letter, signed by six U.S.-based advocacy organisations and policy experts and sent to the U.S. Treasury on Monday, a copy of which was seen by IPS.

“We recommend that IDA members drop the special theme of Regional Transformational Initiatives, and that IDA shift its focus on infrastructure solutions that are more effective at addressing the energy needs of the poor and at fostering inclusive growth, gender equality and climate resilience.”

The letter also calls on the U.S. government to “support such a shift in the negotiations”.

Although the World Bank was unable to offer comment by IPS’s deadline, in its briefing paper bank officials note that recent years have seen an increased international push towards these large-scale regional projects. This includes a major policy initiative unveiled at the Group of 20 (G20) countries summit in Mexico last year, itself based on a paper written in part by bank researchers.

“The focus on regional transformational projects arises from the recognition that they have the potential to catalyze very large-scale benefits to improve access to infrastructure services beyond borders and promote joint action to tackle shared challenges,” the bank states, reporting that a World Bank programme has raised three billion dollars for such projects in recent years.

“In particular, it reflects the recognition that the infrastructure deficit in IDA countries is a basic impediment to development and that regional solutions are needed given the large financing requirements necessary.”

The World Bank estimates that electricity-related investment requirements in sub-Saharan Africa alone will triple over the next two decades, to nearly 14 billion dollars.

Back in fashion
For critics, much of the current concern revolves around past experiences in which large, centralised projects were the focal points of international development and poverty-alleviation efforts, including by the World Bank.

“For us, this issue goes back to the 1950s through 1970s, an era when governments hoped for a silver bullet that, in one fell swoop, would allow them to modernise economies,” Peter Bosshard, policy director for International Rivers, an advocacy group and a signatory of the new letter, told IPS.

“After a while, however, people realised that these projects were too complex, and were forced to rely on outside technologies, management and knowhow. In addition to often huge time and cost overruns, the benefits remained below expectations – they didn’t trickle down to the poor – even while social and environmental impacts were greater than anticipated.”

The letter points out, for instance, that while multilateral donors have invested billions of dollars in two dams and electrification projects in the Democratic Republic of Congo, today only six percent of the population has access to electricity.

“Now, for reasons the World Bank doesn’t quite address, these big regional projects have come back into fashion,” Bosshard says. “In other documents, bank staff members have suggested that it’s simply cheaper and easier for the institution to push out, say, a single large loan for a big dam rather than dozens of smaller loans for dozens of smaller projects.”

The letter to the U.S. Treasury notes that large-scale infrastructure projects in the past have failed to create a “significant” number of jobs for locals. (The Treasury declined to comment for this story.)

Yet even when jobs are created, some investigations have suggested that the projects have an inordinately negative impact on women.

“Our studies found a very specific pattern surrounding these projects: almost 100 percent of jobs went to men, not only in building the coal plants and mines but even office jobs, while women lost jobs,” Elaine Zuckerman, president of Gender Action, a Washington advocacy group and a signatory of the new letter, told IPS. She says her office has studied the effects of four World Bank-financed oil-and-gas pipelines.

“Smallholder women, who make up 80 percent of farmers in developing countries, lose their land to bank-financed associated infrastructure,” she continues. “So men get the jobs and women lose access to their income. A good number are even forced to turn to sex work to make a living – we found elevated HIV levels in the aftermath of each of these projects.”

Strengthening climate resilience
Since the last spate of interest in large-scale infrastructural interventions, two important changes have taken place. First are concerns over climate change and a new focus on fostering “climate resilience”, particularly in developing countries; second, small-scale, non-centralised alternative power sources have become significantly more affordable.

“Diversified solutions are increasingly more appropriate because they mean diversifying the risks of a changing climate, while these big centralised projects actually increase climate vulnerability,” International Rivers’ Bosshard says.

“IDA has all of these other important goals, including strengthening climate resilience, but this large infrastructure proposal undermines each of those.”

Still, many of these new technologies face ongoing problems in accessing both credit and trained technical personnel. Bosshard and others suggest this would be a place where World Bank financing could be critical, offering support to “public guarantee schemes, technical assistance programs and a redesign of tax and other incentives that could remove these bottlenecks.”

The IDA negotiations are scheduled to continue to a second round in June, after which each country will be expected to announce individual funding pledges.