Mortgaging the Earth

Most people take modern economic development for granted, but neither it nor its adverse consequences need be inevitable, according to lawyer and bank consultant Bruce Rich.

This summer marks the fiftieth anniversary for the World Bank, founded by forty-three nations at a Bretton Woods, New Hampshire, meeting. Set up to spur post-World War II recovery and Third World modernization, the World Bank adopted a top-down, centralized approach to growth. Secretive in its planning, elusive in its accountability, and irresponsible in making loans, the World Bank has contributed to economic and ecological disasters, Rich writes.

Converting virgin lands for export-oriented agriculture, ranching, or forestry destroyed rainforests. Further, such World Bank-sponsored projects have resulted in cultural destruction. Members of Brazil’s Kaiowa tribe, for example, are committing suicide out of the despair of having their homelands destroyed.

A former World Bank consultant and an environmental advocate, Rich offers a unique, insider/outsider perspective. Using his experience and extensive research, access to public and leaked documents, Rich details harmful World Bank projects and policies. Obsessed with infrastructure and attracted to power, the bank has displaced millions of poor people and pressured nations to repay questionable debts. Oddly, the bank lately has both blamed borrowers and conceded the inefficiencies of public lending.

“Privately financed projects are typically more efficient,” writes Gregory Ingram, chief author of the bank’s 1994 World Development Report, which criticizes poor nations. Rich argues that private, even small, aid projects can succeed, citing efforts such as Oxfam, which uses low-impact technology and goals tied to local needs that are cultural as well as economic. Yet nongovernmental organizations are only one alternative to a more sustainable strategy. Another is reinventing the World Bank.

The World Bank is bad, Rich says, but perhaps not inevitably so.

It faces “the classic quandary of an interconnected global system: for anything to change anywhere, everything must begin to change everywhere.” Although difficult, reform might be helped by a bottom-up, bottom-line approach to change. According to Rich, “The first step is to halt the source of the problem—money.”