New World Development Report Repackages Old Ideas

By Kanya D’Almeida

WASHINGTON, Apr 11 (IPS) – With over 1.5 billion people living in countries blighted by
incessant or recurring violence, the World Bank’s annual World
Development Report (WDR), with this year’s focus on how
conflict derails development, was anxiously received Monday by
scores of development agencies, governments and NGOs all over
the world.

But many progressive economists say the document does not
stray far from the neoliberal policies that have maintained
a global status quo of inequality.

“Though the World Bank stresses the need for stronger
institutions, this rhetoric is not always in line with
actual policy,” Mark Weisbrot, economist and co-director of
the Washington-based Center for Economic and Policy Research
(CEPR) told IPS.

“In South America, for example, a lot of governments are
trying to do the right thing but don’t have the
administrative capacity and that’s something the World Bank
could actually contribute to,” he said. “The problem is that
the World Bank is part of a consortium with the
International Monetary Fund and so they end up generally
supporting policies that reduce the capacity of governments
by focusing on aid from the outside.”

“Though I agree with the World Bank’s priority to engage
with civil society, this needs to be combined with broader
economic reforms. For example, of the 51 countries
classified as Least Developing Countries 40 years ago, only
three have graduated. So this shows you what a structural
problem we are dealing with,” Weisbrot added.

The WDR 2011, entitled “Conflict, Security and Development”,
is essentially the brain-child of World Bank president
Robert Zoellick.

Addressing the International Institute of Strategic Studies
in 2008, he first highlighted the grave impacts of what he
calls “fragile states”, institutionally, politically and
economically weak nations that are an international
impediment to the Bank’s twin goals of sustainable growth
and poverty-alleviation.

According to the WDR, children living in fragile states are
twice as likely to be undernourished and three times as
likely to be out of school; no low-income ‘fragile’ or
conflict-ridden country has yet achieved a single Millennium
Development Goal (MDG); and poverty rates are 20 percentage
points higher in countries affected by cycles of violence
than other countries.

Civil conflicts cost the average developing country roughly
30 years of GDP growth – all undeniable indicators that
exhaustive changes in the global system are required in
order to overcome downward-spiraling conditions for over 17
percent of the world’s population.

In a positive step forward, the WDR this year adopted a
unique compilation methodology, prioritising pre-existing
local research and national data while generating its own
broad conclusions and recommendations.

“We realised that the international community has to do
things differently,” Nigel Roberts, co-director of the WDR,
told a press conference here Friday.

“Violence in the 21st century is fractured, intense,
complex, entrenched and hard to remove, so national efforts
are required over and above solutions imported from the
outside; knowledge of how to deal with violence lies with
local practitioners, not with Western agencies and
international academic institutions,” he said.

The report enumerates four basic tenets that must be
urgently addressed if cycles of violence are to be halted
and lasting progress brought into states that have endured
several generations of terror, political repression and
economic injustice: improving institutional legitimacy;
investing in citizen security, justice and jobs; adopting a
multi-tiered national-cum-regional approach to change; and
being mindful of a changing global landscape where emerging
middle-income countries and regional institutions must be
empowered to play a much greater role in defining the 21st
century agenda.

Poignantly, Justin Lin, the chief economist of the World
Bank, proclaimed, “Bread and freedom is not a question of
either/or. Each is a prerequisite for the other and we must
strive simultaneously for both.”

Various economists and policy heads note that such grandiose
plans, re-packaged for a new year, do not stray from the old
neoliberal agenda, whose methods have been tried and failed,
largely to the detriment of the very populations they
supposedly seek to fortify.

“In the last decade the World Bank has been trying to
reverse its disastrous neoliberal stance of the 1980s and
early 1990s by focusing more on human development,” Omar
Dahi, a professor of development economics at Hampshire
College, told IPS. “However, it is still an open question
whether they have abandoned the neoliberal model at the
macro level with its focus on trade liberalisation and
reliance on foreign investment.”

“This model is no longer tenable,” he stressed.

“The current focus on institutions is a welcome departure
from mere focus on integration (i.e. trade and financial
liberalisation) but institution building is a difficult
process,” he added. “Take Egypt, where the elite capture of
the state prevented any meaningful attempt to reform or
produce independent institutions, for example – this is
where supporting grassroots organisations can be helpful
since they act as both an alternative development model that
does not rely on the paradigm of growth as well as acting as
checks and balances on the performance of the state.”

“I stress the need to empower labour and peasant
organisations – cooperatives rather than NGOs,” Dahi said.
“The former are ones that are truly representative of the
working and poor class whereas many NGOs usually reflect the
opinions of a very few people, no matter how well
intentioned those people are.”

While espousing support for strong democratic institutions,
the WDR also fails to acknowledge that the World Bank’s
executive board – its most powerful decision-making body –
is dominated by the five richest donors, currently the
United States, Japan, Germany, France and the Britain United
Kingdom.

“This is a moment for the World Bank itself to be
democratised so that developing countries can have a larger
say in the way it operates. They cannot push for good
governance when they are an example of authoritarian
governance,” Dahi told IPS.

In response to the report’s discussion of terrorism, Daniel
Gorevan, a spokesperson for Oxfam International, said, “One
issue that the report fails to address is the impact
international assistance focused on short-term military or
security objectives may have on exacerbating violence.”

“We’re seeing a worrying increase in the level of
militarised or politicised aid. That’s problematic,
especially if this assistance doesn’t address the root
causes of conflict and puts communities or aid workers’
lives at risk,” Gorevan added.

“Since 2001, there has been a growing trend of aid being
used to win ‘hearts and minds’ in conflict but it is often
poorly conceived, ineffective, and in some cases has turned
beneficiaries and aid workers into targets for attack. Aid
directed to short-term political and military objectives
fails to reach the poorest people. It also fails to build
long-term security either in fragile states or, ultimately,
for donors themselves,” he concluded.

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