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| July 21, 2000 | atimes.com | ||
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China
World Bank upsets its biggest customer By Antoaneta Bezlova BEIJING - China's decision this month to withdraw from World Bank funding for a controversial poverty-reduction project ended a year-long row between the bank and its largest borrower, but is likely to have deep repercussions for both sides. Beijing considers unacceptable further conditions on the project in Qinghai province, which involves the resettlement of nearly 58,000 poor farmers of mainly Chinese ethnicity on to traditionally Tibetan and Mongolian lands. Human rights activists and pro-Tibetan organizations worldwide have decried the project as one that would dilute the ethnic populations of both indigenous groups. On July 7, China said it would finance the project itself, without the requested loan of $40 million from the World Bank. While many see the bank's departure from the project due to public pressure as a welcome event, this could have a dramatic impact on the indigenous Tibetan and Mongolian population of the project area. China's World bank executive director Zhu Xian said last weekend that China will carry out the implementation of the project "in its own way". This suggests that resettlement may be carried out on a scale greater than envisaged in the World Bank proposal. The number of settlers had already been reduced from 100,000 to less than 60,000 after the bank's involvement in design of the project. The World Bank pullout also means that the project now would be carried out without any monitoring or scrutiny by the outside world. In the future, it could also lead China to take a tougher approach toward the whole question of development and resettlement in Tibetan areas. In a statement released by the Ministry of Finance on July 10, Beijing said that ''any attempt intended to obstruct the implementation of the project will never succeed''. The ministry said "some shareholders" of the World Bank, motivated by political reasons, had trampled on the bank's constitution, raised unreasonable demands and tried to block the project. ''China is firmly against politicizing the business of the World Bank and will never accept any additional conditions attached to a report raised by the management authority of the World Bank,'' the ministry's statement declared. The bank, in fact, has persistently expressed support for the project, despite opposition from its main lenders, the United States and Germany. It approved a $40 million loan for the project last year, but the loan was put on hold while the bank's inspection panel investigated objections to the project from the International Campaign for Tibet, one of the largest pro-Tibetan groups. The three-member independent panel, with members from the Netherlands, Ghana and Canada, was only authorized to consider whether the project had been developed in line with bank's rules. Yet the findings of the panel exposed not only repeated violations of bank policy but shed embarrassing light on the whole relationship between the bank and its largest and most successful client - China. The report concluded that the bank was in violation of seven out of 10 bank regulations when it examined, and decided to back, the loan, including disclosure of information, environmental assessment, policies on indigenous peoples, and resettlement. James Wolfensohn, World Bank president, accepted some of the criticism and proposed significant changes to the project, including the commissioning of higher-level environmental analysis, the upgrading of social assessment and the provision of better documentation. The changes would have cost more than $2 million and led to a further 15-month delay. China rejected the bank's conditions. What deeply affected Beijing were the panel's findings on how divided World Bank staff were over policy and procedures in dealing with China. The panel's report had highlighted the management's tendency to deviate from established policy and procedure and revert to "precedent" with regard to China, which had been described by staff at the bank as "different" from other countries. ''Interviews with some staff were punctuated by the refrain that 'in China things are done differently','' the report revealed. The panel said it ''failed to find any grounds for the view that precedents in a country, or a country's 'social and political systems', can in any way determine what is required by the policies''. For the World Bank, which has lent China more than $25 billion and hailed the country as a glowing success story, the implications are damaging. Indeed, the debacle over the Qinghai poverty-reduction project is likely to have a significant impact upon the relationship between the bank and China in the future. If the criticism raised so far about the bank's dealings with China is ignored in the future, the World Bank's credibility would be at stake. And the fact that World Bank funds will not be used for a project which closely hews to Beijing's aims of demographic restructuring and development of Tibetan areas, may also affect the policies of other global financial institutions toward China when indigenous people's issues are concerned. (Inter Press Service) |
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