World Bank asked to open up structural adjustment review

by Gumisai Mutume

Washington, 1 Mar (IPS) -- As the World Bank begins revising policies guiding its much-maligned structural adjustment programmes (SAPs), people’s groups are demanding that this be done through public consultation.

Non-governmental organisations (NGOs) that monitor Bank policies have written to the institution’s vice-president for operations policy, Joanne Salop, asking for a transparent review of a policy that has had far-reaching impacts across the world and generated much controversy.  “Failure to carry out meaningful consultation over the new policy could raise serious concerns about the World Bank’s good-faith commitment to participation and further alienate critics of adjustment operations,” warned the NGOs. The groups include the Washington-based Globalization Challenge Initiative, Catholic Relief Services, Friends of the Earth, and members of the global Structural Adjustment Review Participatory Network (SAPRIN), which is assessing the impact of SAPs in eight countries.

The Bank is currently simplifying a number of its internal operational policies. Policies governing information disclosure, involuntary resettlement and forests are under review.

However, a senior World Bank official who did not want to be identified said it was premature for NGOs to raise concerns about the process as the Bank was still conducting internal consultations.

He noted that NGO concerns were based on an initial draft of an internal review document, ‘Adjustment Lending: Retrospective and Implications’, which has since been amended. But the document remains confidential, and  is expected to guide the process.

“They need to give us an opportunity to discuss this internally first before we put it out to public input,” said the Bank official.

“There is so much distrust of the Bank among NGOs,” says Kathleen Selvaggio of the non-governmental Catholic Relief Service, which is leading the campaign.

Selvaggio said: “The NGOs fear that if the Bank controls the process it will be flawed. For instance, how will the Bank determine who will participate?  We want some assurance that the Bank will be willing to listen and will tolerate very diverse positions.”

The Bank is not known for listening to opinions divergent from its own and has of late been targeted by massive street protests by groups demanding to influence its operations.

It is very sensitive about structural adjustment programmes, launched in the 1980s and increasingly blamed for the rising level of poverty in many developing countries.

The Bank is reluctant to open itself to external scrutiny. It was only recently that mounting pressure, forced it to declare itself open to reforms aimed at enhancing transparency and accountability.

But some observers fear that the whole exercise around reforming the adjustment lending operation policies is an attempt by the Bank to redeem the tarnished image of SAPs and re-launch them without meaningfully changing their content.

Already fancy names are being bandied around, such as Poverty Reduction Support Credits and Development Support Loans, to describe adjustment-type lending whose fundamental principles have not changed during the last 20 years.

“They are selling the same snake oil in a different bottle,” says Doug Hellinger of the Development Gap on Alternative Policies, which has been leading a network of NGOs monitoring the impact of SAPs in eight countries, with Bank participation.

The NGOs say that before starting the review process, the Bank should assure them that it would observe a number of general principles. It should set a minimum one-year consultation schedule because of the complexity of the issues and the number of people needing to be consulted.

They want the Bank to ensure that major issues raised are accurately documented and shared and commented on before final submission to headquarters. The Bank should also undertake to respond to each major issue and indicate proposed modifications of the draft policy. It should ensure the consultations involve global and country-level networks of groups that have worked on these issues and also include grassroots organisations.

The executive summary of the discussion document should be translated into at least all the major United Nation’s languages and into local languages in individual countries. Consultations should take place in all the major regions of Bank operation and include both low-income and medium-income countries and also those demonstrating ‘successful’ and ‘unsuccessful’ adjustment performance records.

The SAPRIN network charges that the Bank is often unwilling to respond to research and analyses, which show that the impact of policies like privatisation, trade liberalisation and removal of subsidies, pushed by SAPs, has generally been negative.

“It is not certain that the revision will address the substantive concerns of civil society organisations around the world, nor that the new policy will reflect some of the principles of participation, and national ownership promoted in recent vehicles such as the Poverty Reduction Strategy initiative,” notes the NGO letter.

It is also feared that the policy revision will see the Bank remove the limits on the amounts it can churn out through SAPs from the present limit of 25%.

The Bank considers adjustment lending a cheap way of moving large amounts of money compared to investment lending, which includes loans for projects that often require expensive exercises such as environmental impact assessments.

The Bank pushes adjustment lending to poorer nations through its soft-loan arm, the International Development Association (IDA). The IDA would like to boost lending from $2.3 billion to $3 billion during the 2001 financial year and up to $3.2 billion the following year.