Tuesday, October 15, 2013

why does the world bank richly fund those quite capable of funding themselves?

WaPo | The bank’s 30-year engagement with China began soon after the United States restored diplomatic ties with the communist nation in 1979. It is often trumpeted by bank officials as one of their more important success stories. China’s rapid development has been central to the drop in extreme poverty around the world. Bank officials, including Kim, say that they are uniquely positioned to help China with ongoing problems such as pollution and climate change — and that China’s success on those fronts is important to the world.

But as China has become more powerful and sophisticated, the bank’s role there has occupied an increasingly gray area. 

Is the World Bank there because China needs help? Or because loans to China provide a hefty profit that pays the bank’s salaries and administrative costs? Does helping China reduce its carbon use justify bank support for programs that may have damaged industries in other countries? Are Chinese contractors simply more willing than most to work in difficult parts of the world for a cheaper price?
China is the bank’s third-largest borrower, with nearly $56 billion in loans since 1980, and 107 programs underway. In the early years, that included support from the International Development Association (IDA), the branch of the bank that provides low-interest loans or grants to the poorest countries, and whose lending is subsidized by contributions from wealthier nations, including the United States.

That cut-rate lending stopped more than a decade ago when China passed the income threshold set by the bank for IDA borrowers. But some in the United States argue that China — a nuclear power with a space program and $3 trillion in cash reserves — should not get any help from an organization whose money and energy could be better directed at countries with less ability to help themselves.