FROM July 1 onwards, companies will be
able to call a single number at the World
Bank's (WB) Washington Dc headquarters to enquire about possible loans,
political-risk insurances or credit guarantees for business projects in developing countries and the former Soviet
bloc. These services for private companies are offered by the International
Bank for Reconstruction and
Development - the core institution in
the WB group - and two affiliates, the
International Finance Corporation (IFC)
and the Multilateral Investment
Guarantee Agency (MIGA).
WB officials hail this streamlining of
procedures as vital to "build up a thriving private sector" in the aforementioned countries., But critics are worried
that it may result in lower environmental and social standards. In 1994, the
core W13 group lent approximately us $2
billion a year to several governments for
private sector projects. The 1FC provided
us $2.9 billion in loans and equity
investments, while the MIGA issued us
$1.6 billion in political-risk and related
insurance for 155 projects.
Until now, companies have found it
very time consuming to apply for services at the W13 because eligibility criteria
and compliance procedures vary from
one affiliate to the other. Currently,
there are about 20 private sector projects that receive aid from more than
one WB affiliates. Most involve infrastructure and natural resource extraction, like road and pipeline construction
and mining ventures.
One recent example of such activity
is the Maqui Maqui gold mine in northern Peru, which receives IFC financing
and insurance from MIGA. The Hub
thermal power project in Pakistan is
seeking help from three WB affiliates.
Reportedly, the WB is also reviewing a
number of more complex projects
involving two or more countries, like a
natural gas pipeline from Bolivia to
Brazil, an oil pipeline from Chad to
Cameroon and a dam in Laos that will
supply electricity to Thailand.
Environmental and social NGOS,
however, have expressed concern that
the simplified procedures adopted by
the WB may result in lower ecological
standards. "The (WB) environmental
guidelines and capacities regarding private sector lending are very modest. Yet,
the private sector lendings of the WB
have potential environmental impacts
both in a positive and negative sense,"
says Peter Bosshard, an activist with the
Switzerland-based Berne Declaration.
'@iSome NGos believe that we should
only work on matters that directly affect
poor people, like nutrition and education, The thesis that we are defending is
that these services cannot happen in a
vacuum. We need to promote schemes
that boost economic growth," said
Bernard Pasquier, an 1FC staffer.
Activists who attended the meeting
pointed out that the WB needs to ensure
that its review process is completely
Itransparent' to communities affected
by projects under consideration. "We
emphasised that we appreciated the
opportunity to talk with them, but that
it would be important to broaden their
interaction with other groups, particularly those outside of the us," says Andrea Durbin of Friends of the Earth.
The Global Environment Facility
(GEF) of the WB recently offered a grant
to protect the forest cover of the Nakay
plateau in Laos at a time when the 1FC
and the International Development
Association - which is an offshoot of
the WB - were considering funding for
the Nam Theun ii dam, which would
flood the very same plateau. The issue
was resolved to the utter dissatisfaction
of environmental groups, as the GEF voluntarily withdrew the Nakay plateau
project from its environmental protection plans.
officials of the IFc and the WB are
now attempting to avoid any kind of
future conflicts by preparing joint country assistance plans. So far, eight countries have been selected for a pilot project, which is slated to begin in the
autumn of the year 1997. This pilot project would include countries like the
Cote d1voire and Mexico, followed by
Brazil, Egypt, Indonesia, Kazakstan,
and Poland. India also figures in the list
of the selected countries.