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2013 | Book

Tiger Talk Read chapter Read first chapter

Foreclosing the Future

The World Bank and the Politics of Environmental Destruction

Author: Bruce Rich

Publisher: Island Press/Center for Resource Economics

Part of: Springer Professional "Wirtschaft+Technik" , Springer Professional "Technik" , Springer Professional "Wirtschaft"

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About this book

World Bank President Jim Yong Kim has vowed that his institution will fight poverty and climate change, a claim that World Bank presidents have made for two decades. But if worldwide protests and reams of damning internal reports are any indication, too often it does just the opposite. By funding development projects and programs that warm the planet and destroy critical natural resources on which the poor depend, the Bank has been hurting the very people it claims to serve. What explains this blatant contradiction?

If anyone has the answer, it is arguably Bruce Rich—a lawyer and expert in public international finance who has for the last three decades studied the Bank’s institutional contortions, the real-world consequences of its lending, and the politics of the global environmental crisis. What emerges from the bureaucratic dust is a disturbing and gripping story of corruption, larger-than-life personalities, perverse incentives, and institutional amnesia. The World Bank is the Vatican of development finance, and its dysfunction plays out as a reflection of the political hypocrisies and failures of governance of its 188 member countries.

Foreclosing the Future shows how the Bank’s failure to address the challenges of the 21st Century has implications for everyone in an increasingly interdependent world. Rich depicts how the World Bank is a microcosm of global political and economic trends—powerful forces that threaten both environmental and social ruin. Rich shows how the Bank has reinforced these forces, undercutting the most idealistic attempts at alleviating poverty and sustaining the environment, and damaging the lives of millions. Readers will see global politics on an increasingly crowded planet as they never have before—and come to understand the changes necessary if the World Bank is ever to achieve its mission.

Table of Contents

Frontmatter
Chapter One. Tiger Talk
Abstract
in saint petersburg it was the most glamorous event in memory, set in an imposing nineteenth-century Tsarist palace. Supermodel Naomi Campbell attended with her billionaire companion, real estate oligarch Vladislav Doronin (known as “the Donald Trump of Russia”). Hollywood megastar Leonardo DiCaprio’s first two attempted airplane flights to Russia encountered emergency delays; he scrambled to find other connections before arriving many hours late. Harrison Ford called in via videoconference. What lured them? They and hundreds of wildlife specialists and government officials were gathering in the former Russian imperial capital in November 2010 at a summit to save the world’s tigers. Indeed, only 3,200 tigers remain alive in the wild, down from over 100,000 a century ago. In the first decade of the twenty-first century alone, the world tiger population declined by 40 percent.1 If the tigers were ever going to be saved, it was now or never.
Bruce Rich
Chapter Two. Present at the Creation
Abstract
the years leading up to the 1992 Rio de Janeiro Earth Summit were increasingly uncomfortable ones for the World Bank, besieged by growing international criticism of the environmental and social impacts of its lending. Large infrastructure projects supported by the Bank, including dams, plantations, mines, and oil wells, became issues of local and global controversy. In poor countries, local communities began to protest development that threatened the forests, fisheries, and agricultural lands on which they depended. Throughout the world, growing evidence of global warming heightened concerns about greenhouse-gas emissions and the destruction of tropical forests.1 Scientists spoke up and civil-society movements grew, with varying degrees of response from national governments.
Bruce Rich
Chapter Three. “I Can Change the Approval Culture to an Effectiveness Culture”
Abstract
it was an astounding scene, unprecedented in the history of the World Bank. Just nine months into his tenure as president, James Wolfensohn was delivering a passionate tongue-lashing to the institution’s top management. Internal surveys, he declared, showed that nearly 40 percent of staff had little confidence in their supervisors. He berated the managers, “They may not trust me, but they don’t trust you. … ”1
Bruce Rich
Chapter Four. High Risk, High Reward
Abstract
The Dalai Lama was worried. Right after meeting with President Bill Clinton on June 27, 2000, he took the extraordinary action of publicly criticizing a World Bank project. The project, he said, should not proceed and “would be the source of more problems” for Tibetans.1 Indeed, the “China Western Poverty Alleviation Project” entailed using $40 million of a $160 million loan to move some 58,000 poor, mainly ethnic Chinese Han and Chinese Muslim farmers into an area traditionally inhabited by some 4,000 Tibetan and Mongol nomads in China’s Qinghai Province. The rest of the loans would provide assistance to two other Chinese provinces.2 The Qinghai component would also involve the construction of a 40-meter-high irrigation dam and two irrigation canals, 29 and 56 kilometers long, to promote agriculture on lands that hitherto had been used for grazing, as well as schools and clinics for the migrants.3
Bruce Rich
Chapter Five. The Logic Was Textbook Perfect
Abstract
Cajamarca is a picturesque colonial town in the northern highlands of Peru. Near the central square, travelers can visit a very old one- room house, built on the foundations of an Inca edifice, where the conquistador Francisco Pizarro held the last Inca emperor, Atahualpa, prisoner for several days in November 1532. William Prescott, in his classic History of the Conquest of Peru, describes what happened next: “It was not long before Atahuallpa [sic] discovered, amidst all the show of religious zeal in his Conquerors, a lurking appetite more potent in most of their bosoms than either religion or ambition. This was the love of gold. He determined to avail himself of it to procure his own freedom.”1 Atahualpa told Pizarro that he would fill the room—some 22 by 17 feet—up to where he could point (around eight feet high) once with gold and twice with silver, if his life would be spared.
Bruce Rich
Chapter Six. Backwards into the Future
Abstract
It was the last week of September 2000 and the streets of Prague were mobbed with thousands of anti-globalization protesters; many were Czechs, but others had come from all over Europe. Thirteen thousand Czech security forces mobilized, reinforced by busloads of police from the provinces. In the ensuing pitched battles the protesters’ Molotov cocktails were met with teargas by the police. The World Bank and International Monetary Fund had come to town for their 55th Annual Meeting.1
Bruce Rich
Chapter Seven. The Brief, Broken Presidency of Paul Wolfowitz
Abstract
As spring came to Washington in 2005, the World Bank once again was a cynosure of controversy, indeed outrage. The outrage was directed not at the Bank per se, but at U.S. President George W. Bush’s nominee to replace James Wolfensohn, none other than Deputy Secretary of Defense Paul Wolfowitz, a major architect of the Iraq war. It was, according to the London-based World Development Movement, a “truly terrifying appointment.”1 Some 1,650 NGOs around the world protested the nomination, and internal polls of Bank employees found 90 percent opposed to the prospect of Wolfowitz as their new boss.2 Wolfowitz seemed to personify the unilateral arrogance of the George W. Bush administration; among other things, under his aegis the U.S. Defense Department had banned countries that opposed the Iraq war (many of them U.S. allies) from bidding for contracts for Iraqi reconstruction.3 Nobel economics laureate Joseph Stiglitz, who had served under Wolfensohn as the Bank’s chief economist, feared that the Wolfowitz appointment would again make the Bank a “hated organization,” and potentially lead to “street violence and demonstrations” against its policies.4
Bruce Rich
Chapter Eight. The Carbon Caravan
Abstract
Once again, a new president of the World Bank assumed office faced with an institution in crisis. The unprecedented forced exit of Wolfowitz left a bitter aftermath, and a new chief executive would have to tread carefully. Robert Zoellick proved himself equal to the challenge. By 2010 he was widely praised in the mainstream Washington press for turning the institution around, praise which only grew through the end of his tenure in June 2012. Writing in the Financial Times, Sebastian Mallaby lauded Zoellick as “the quiet revolutionary who saved the World Bank.”1
Bruce Rich
Chapter Nine. A Market Like No Other
Abstract
History may well judge the Bank’s role in subsidizing global carbon markets as an ill-advised and quixotic foray into the early-twenty-first-century equivalent of the seventeenth-century speculative bubble in tulip-bulb futures. Here the seductive lure was not to purchase a whole house in Amsterdam for the price of a single rare tulip bulb (as was the case at the peak of the infamous Dutch financial bubble in tulip futures), but to unleash a global carbon market whereby businesses in developed countries would pay tens of billions of dollars a year for activities in poorer countries to offset rich-country greenhouse-gas (GHG) emissions. Superficially, it seemed plausible enough; after all, major industrialized country governments were pushing the scheme, and they gave the Bank still more money to help catalyze it.
Bruce Rich
Chapter Ten. Financializing Development
Abstract
Robert Zoellick was proud of his achievements at the World Bank. In 2012, in his last months on the job, he wrote in Foreign Affairs that under his leadership the Bank had made progress in promoting good governance and fighting corruption. He reiterated that “at times the bank must say no to clients that refuse to meet standards on and safeguards regarding corruption, the environment, and governance.”1
Bruce Rich
Chapter Eleven. Dying for Growth
Abstract
A new president would take the helm at the World Bank Group on July 1, 2012. Robert Zoellick was preparing to join Mitt Romney’s presidential campaign, hoping he would be considered as a potential secretary of state or secretary of the treasury. Speculation on likely candidates for Zoellick’s successor at the World Bank included Susan Rice, U.S. ambassador to the United Nations, John Kerry, former presidential candidate and chairman of the Senate Foreign Relations Committee, and none other than Larry Summers, former secretary of the treasury and president of Harvard. Summers’ nomination would certainly have sent a signal—20 years earlier, as chief economist of the Bank, he had argued that the only way to solve environmental problems was through more growth.1
Bruce Rich
Chapter Twelve. What Does It Take?
Abstract
in November 2012, the World Bank with great fanfare released a report entitled “Turn Down the Heat,” urgently warning that the Earth was headed for 4° Celsius (7.2° Fahrenheit) warming in coming decades, with catastrophic impacts. The world, and particularly its poorest populations, faced the prospects of increasing droughts and food shortages, rising malnutrition rates, the flooding of coastal cities, and growing shortages of water in many regions. There was increasing uncertainty about the future of economic development itself. The Bank’s president, Jim Yong Kim, declared that “it is my hope that this report shocks us into action.”1
Bruce Rich
Backmatter
Metadata
Title
Foreclosing the Future
Author
Bruce Rich
Copyright Year
2013
Publisher
Island Press/Center for Resource Economics
Electronic ISBN
978-1-61091-184-9
Print ISBN
978-1-59726-433-4
DOI
https://doi.org/10.5822/978-1-61091-184-9