[stop-imf] World Bank Vows To De-emphasize Structural Adjustment, Put More Emphasis On Development

[robert weissman]

World Bank Press Review
August 26
[excerpt]

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World Bank Vows To Put More Emphasis On Development
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The world's largest public lender for development says it is replacing its
controversial "adjustment lending," accused of squeezing scarce resources
from poor borrowing nations, with a new set of rules more attuned to
poverty reduction efforts in developing countries, reports Inter Press
Service.

The World Bank says it is putting more emphasis on what it will call
"development policy lending," the money that accounts for one-third of the
bank's annual lending, around $18.5 billion in 2003. World Bank
Vice-President James W. Adams said the new policy would give borrowing
nations more say in devising their own economic plans and will have a
long-term development focus. "We're moving away from a very prescriptive
list of policies that were part of the early adjustment lending --
focusing largely on fiscal constraints, on trade policy reforms, pricing
reforms -- to a much broader range of issues," Adams said, adding those
issues including health, education and the environment.

Structural adjustment has been particularly controversial in recent years
because it imposed conditions on borrowing nations that forced changes
such as cutting spending for health and education, privatizing public
assets, deregulating the economy and allowing multinational companies to
compete with local firms, leading to loss of local purchasing power and
boosting unemployment. Structural adjustment also came under fire from
some borrowing countries, which accused the bank of prescribing a
one-size-fits-all policy that ignored differences between countries and
regions.

Under the new policy, the bulk of policy lending will come in the form of
loans for certain programs for activities that have already been
completed, rather than for achievements promised. Adams says the new
approach will also give countries more ownership of their economic
development strategies, a long-time demand of borrowing nations and
development groups. Unlike the past approach, "development policy lending"
(DPL) also refers to the importance of vetting the bank's efforts to
ensure that the possible environmental or social effects of its lending
are properly reviewed.