World Bank profits from poor nations

When people think of the World Bank, the image they often see in their minds is one of a global financial institution that provides loans to developing nations to raise their standard of living. That is basically the picture that the Bank’s PR people would like you to see.

The reality is quite different. The World Bank actually profits from poorer countries in terms of net cashflow going into the Bank.

When Inter Press Service asked me to cover the proceedings of the meetings of the Boards of Governors of the World Bank and the International Monetary Fund in Singapore late last year, I jumped at the chance. It was a rare opportunity to enter the “lions’ den”, so to speak, and see first-hand how the movers and shakers of the global financial architecture operate.

What struck me most was the air of Big Brother all around the impressive Suntec convention centre in Singapore. Battened down under a heavy security cordon, the convention centre had plasma TV sets beaming news from BBC, CNN etc – all flashing the same corporate-friendly messages in benevolent sweet-sounding language. The titans of Big Business – the transnational corporations – are indeed the new rulers of the universe.

At the convention centre, men and women in immaculate suits, led by Paul Wolfowitz, the Bank’s president (the same guy who pushed for more aggression against Iraq), spoke soothing words of “poverty eradication” and “good governance”. But there was one thing missing – the poor people, those people the Bank purports to help, were nowhere to be seen, their views unsolicited.

This was the article I came up with:

SINGAPORE, Sep 19 (IPS) – The World Bank receives more from developing countries than what it disburses to them says a new report released Tuesday as finance ministers endorsed a controversial new Bank plan to tackle corruption in developing countries.

The Social Watch Report 2006, released here at the annual meetings of the Bank group and the International Monetary Fund (IMF), stressed the need to reform the current international financial structure. Net transfers (disbursements minus repayments minus interest payments) to developing countries from the Bank and the International Bank for Reconstruction (IBRD), have been negative every year since 1991, the report pointed out.

The IBRD is now not making any contribution to development finance other than providing funds to service its outstanding claims. The International Development Association (IDA), which provides interest-free credits and grants to the poorest developing countries to boost their economic growth, is the only source of net financing from the Bank. Full article