Poverty and Funding by International Agencies
The following letter to the Editor of the New York Times following
the street protests in Washington, D.C., against the World Bank on April
18 and 19, 2000.
Last week's street protests in front of the World Bank and the International
Monetary Fund headquarters in Washington, D.C., brought to focus the
lack of sufficient progress in dealing with poverty in most developing
countries. It is true that even after half a century of assistance by
these and other international institutions in areas of agricultural
output, job creation, education, health, and infrastructure development,
amongst others, more people are in poverty now than at any time before.
Admittedly, the protestors are generally correct in their assertions
about the condition of poor nations, but the questions that need to
be asked are, who is to be blamed for this failure, and what fundamental
changes are needed.
It is no secret that billions of dollars have been wasted by many
governments on projects that have yielded little or no benefit to the
intended segment of the society, the poor. Even in countries that have
experienced rapid industrial development in the past decade, the living
conditions in rural areas have improved very little. In India alone,
the rural population now exceeds 600 million people, or nearly two-third
the total population, and their social and economic status has hardly
changed from all the recent reforms instituted by the government. The
situation is not much different in practically every other developing
Under the present arrangement where funds allocated by international
institutions are mostly channeled through national government agencies,
it is not possible to assure the desired outcomes. Corrupt governments
and inefficient bureaucracies are the real reasons for the failure to
surmount poverty. International institutions are in no position to bring
about the much needed internal reforms and fundamental changes in governance
in any developing country.
So, how should international development and lending agencies reform
themselves? Perhaps, the protestors ought to be telling the World Bank
not to fund projects through corrupt governments and inefficient bureaucracies.
Alternately, new ways need to be found to directly involve the private
sector and non-governmental organizations (NGOs), without the crippling
governmental intervention. Also, as it would be expected in the private
sector, projects that fail to meet their milestones should not receive
continued funding. The time has come to demand accountability and performance
on the part of recipients of funds in developing countries.
Abraham M. George is the president of The George Foundation, a
non-profit organization engaged in several projects in India on education
and health in rural areas.