Tribunal finds undue influence of bank on India’s national polices

, by Focus on the global south

New Delhi: The four day Independent Peoples Tribunal (IPT) on the World Bank in India concluded here today hearing numerous depositions indicting the Bank’s policy and project interventions in India.
While the World Bank India office did engage with the IPT and claimed they would make a deposition to respond to some of the evidence against the
Bank,they failed to show up despite provision of adequate space and time by the organisers.

In its preliminary findings, the IPT observed the Bank had an undue and disturbingly negative influence in shaping India’s national policies disproportionate to its contribution, financial or otherwise. While India is the world’s largest single cumulative recipient of World Bank assistance, with lending totaling about $60 billion (Rs. 2,40,000 crores) since 1944, current annual borrowing amounts to less than 1% of the country’s GDP ( In 2005, India’s annual borrowing from the World Bank for new projects was 0.45% of GDP)

The loans however has been used as leverage to bring about important policy changes and impose conditionalities in areas such as governance reform, health, education, electricity, water and environment- many of these with obvious political and social consequences. The loans also legitimize substantial additional funding from a diversity of bilateral and multilateral donors such as the Asian Development Bank and Department for International Development (DFID-UK). The Bank’s loans have caused
extensive social and environmental harm from mass displacement in the Narmada valley to loss of livelihoods of traditional fishworkers in places such as Barwani.
It was noted that such overbearing influence on India’s policy making was in violation of the World Bank’s own Rules of Association, which mandate it to be an apolitical institution that should not interfere in political processes of any member country. Further, the IPT depositions stated that the presence of former Bank officials in senior government positions was unacceptable and involved conflicts of interest.

Vice Chairman of the Kerala State Planning Board Professor Prabhat Patnaik in his deposition cited the example of the Jawaharlal Nehru National Urban Renewal Mission (NURM), which was a World Bank designed project. In the Kerala NURM project, the state government he said was being forced to accept a conditionality to reduce stamp duties to 5% from the earlier 15-17%. To avail a loan of about 1000 crores, Kerala would lose upto Rs.7000 crores
of government revenue.

Vinay Baindur of the Bangalore based Collaborative for the Advancement of Studies in Urbanism (CASUMM) showed evidence of how the Karnataka Economic Restructuring Loan (KERL) resulted in the conversion of a state government and its economy into a corporatised entity meant to generate funds for "private sector and enterprise development". ’The $ 250 million loan resulted in far reaching changes; the closure/privatisation of the public sector, a little short of two lakh permanent employees were forced to take Voluntary Retirement Scheme (VRS) payments. Further, the restructuring process led to a steep rise in farmer suicides; many of those who committed suicide did so because they were unable to pay the arrears in power costs that were suddenly slapped on them on account
of power tariff hikes. "The withdrawal of subsidies for agriculture led to a sharp rise in the costs of cultivation", argued Baindur in his deposition. Jury member and scientist Meher Engineer said that he found the depositions on how the Bank forced inappropriate technology on India such as incinerators especially damning. ’Given the well researched evidence that I have heard it is hard to imagine any role for the World Bank in the environment sector, he said. ’The Bank is pro-rich, pro urban and anti environment’, he concluded.

The IPT was organized by an inclusive platform consisting of over 60 national and local groups such as the National Alliance of Peoples Movements (NAPM), Indian Social Action Forum (INSAF) and Human Rights Law Network (HRLN) in collaboration with the JNU Students Union and Teachers Association. Activists, academicians, policy analysts and project affected communities presented evidence against the World Bank in over 26 sectors from 21-24 September. Jury members included historian Romila Thapar,Writer Arundhati Roy, Activist Aruna Roy, Former Supreme Court Justice P B Sawant, Former Finance Secretary S P Shukla, Former Water Secretary Ramaswamy
Iyer, Scientist Meher Engineer, Economist Amit Bhaduri, Thai spiritual leader Sulak Sivaraksa and Mexican economist Alejandro Nadal amongst others. Read more