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  The Stratfor 21 Sep 06
The World Bank at a Crossroads
Extracts...

The Influence of Activists

In recent years, the impact of activists has become evident in the mountains of new rules the Bank applies to loans for projects in developing countries.

These rules represent an attempt to sue for peace with critics in the nongovernmental organization (NGO) community and donor governments -- primarily in Europe -- who argued that, in ignoring the environmental and social consequences of its lending, the Bank had fallen out of step with its members' values and perspectives.

A particular friction point has involved criticisms of the Bank's lending for major infrastructure and extractive projects.

From the Bank's standpoint, these loans strengthen the foundations of growing economies, but ecologists and human rights campaigners believe these projects have brought to developing countries the types of problems that donor countries are learning to regret.

The Bank's critics tend to fall into two distinct groups -- ideologues and opportunists on one side, and realists and idealists on the other.

The realists and idealists sincerely oppose the ecological, social and/or human rights issues that can be associated with projects the Bank funds. These critics have battled over lending for dams, mining and extractive projects for more than 20 years. They do not argue whether the Bank has a legitimate role to play in developing countries; rather, they claim that in supporting certain projects, the Bank does not help to improve the plight of the poor as a whole.

The second group of World Bank opponents are ideologues and opportunists. The ideologues oppose the Bank on grounds that it is an agent of Western capitalism and Western governments. Opportunists are those who use the ideologues' arguments and rhetoric with the goal of gaining political or personal power.

On the whole, both the ideologues and opportunists frequently have stood with the realists and idealists, often (usually intentionally) becoming indistinguishable from them.

But the key difference is that activists in this second group were only marginally concerned about the issues raised by Bank lending; their focus instead was either on the political and ideological implications of the bank's continued influence or on winning power for themselves.

In response to the increasing calls for change from both the idealist and ideological camps, the Bank, under former President James Wolfensohn, embarked on a series of reforms to address many of the social and environmental questions being raised.

Wolfensohn created departments that were staffed by career activists to work closely with NGOs on questions about the social and environmental implications of the Bank's lending. Activists were invited to participate in hearings, and their concerns began to be taken into consideration.

Once Wolfensohn's reforms took effect, government ministers seeking loans from the Bank were surprised by the details they were asked to provide about environmental and social implications of the project at issue.

These ministers learned the game: They had to work with credible NGOs on the ground and to win their support in order for the project to go forward quickly and easily. Without the consent of local, credible NGOs, the project would be subject to numerous reviews at the World Bank.

And though such reviews did not necessarily mean withdrawal of the Bank's funding, they could be expensive, time- consuming and, often, require changes to the project to address the same concerns NGOs would have raised.

In this environment, the ideological critics found themselves in a bind. Their decade- long criticisms over implications of Bank lending for environmental (or human rights or indigenous rights) issues were being addressed in practical terms.

The second group did not really want environmental and social impact statements so much as they wanted a platform for criticizing the institutions.

Thus, as the Bank surrendered to mainstream critics and acted on the issues at hand, the ideological activists turned to a more traditional, populist set of arguments.

Populist opposition was not hard to build.

In many countries, the World Bank is viewed as a vehicle of neoliberal imperialism, and saying that a project is a "World Bank project" can hurt the project's champions politically.

This was evident in the recent controversy over a paper mill in Uruguay, which was heavily criticized by Buenos Aires for the pollution it would bring to Argentina. The Argentineans made much of the fact that the paper mill was a Bank-funded project -- calling it a World Bank "operation."

While it is true that the Bank provided free consulting for the project, it was not a key player in its construction or operations. Still, the argument that it was Bank-supported became a significant part of the political battle over the mill.

Populist sentiments against the Bank climbed further when Paul Wolfowitz, a neoconservative with a reputation as an "architect of the Iraq war," was named as Wolfensohn's successor in 2005.

Wolfowitz has maintained the reforms that Wolfensohn put in place, and he continues to seek the support and guidance of NGOs. But ideological critics of the Bank have seized upon his background and current office as proof that the Bank is an aggressive, imperialistic instrument of Western, and particularly American, foreign policy.
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