There
are numerous examples where the aid receiving countries from the World Bank and
the IMF have suffered problems. There are even cases where the countries
receiving assistance became poorer than they were before financial help (Bryan
T. Johnson, 1996). In fact there are counter examples like Hong Kong and
Singapore which have become one of the better economies without any substantial
aid from the World Bank or the IMF. Also, many reports and researches have
shown that the World Bank and the IMF projects have a very low success rate. Hence,
it would not be difficult to find a failed project aided by these institutions.
One
of the futile projects of the World Bank that I found was the “Feeding Project”
in Bangladesh. The project was aimed at improving the nutrition of the infants,
and hence eradicating malnutrition. Children were registered at a center at
birth, and were weighed every month to determine whether they required feeding assistance
from the project (Taipei Times, 2003). In case of severely malnourished
children, the mothers were called daily, and were educated about the ideal
feeding habits they should follow (Taipei Times, 2003). The project seems to
have a nice cause, and a good implementation method, but the negative influences
on the country are undoubtedly bigger.
In
2003, the World Bank loaned US$ 124.6 million to Bangladesh solely for this
project. Furthermore, a ten year loan deal of US$ 1 billion was on the cards
(Taipei Times, 2003). Regarding the economic condition of Bangladesh, so much
of loan is too much for just a single project.
Similarly, the efforts of the
project had not been significant considering the huge investment. Furthermore, the
major improvements in the nutrition levels of the infants had been due to
improvement in economic condition of the people as a whole, not because of this
project. So, we can say that this project turned out to be just accumulating
huge debt for a weak developing economy.
I
personally think that this huge debt could have been utilized in assorted projects
on education, hygiene and health services, all of which would have had a
positive impact on improving nutrition and health of the infants, along with
developing those sectors. In this way, the burden of the debt would have been
reduced or at least distributed to manifold fields. Thus, the government’s
spending on multiple areas would have reduced, and it would have been easier to
repay the debt.
Keeping
in mind the irregularities in the aid process, I am pretty much skeptical that
such financial institutions could ever be objective, unbiased and responsible
in lending process. Firstly, the major donor countries always have the
stronghold over the decisions of these institutions. So, they can manipulate
the projects in a way that is beneficial to them or in something of their
interest. Secondly, such institutions keep on providing aid to the countries
where the majority of the funds is engulfed by the corrupt officials. Finally,
the terms and conditions of the aid prevent the countries to be economically
independent. The assistances are given for specific purposes and projects only.
Countries cannot grow if they are bounded by debts, which they cannot even spend
in their own way. Therefore, it would be hard for such institutions to be reliable.
References:
Johnson, B. T. (May 16, 1996), The World Bank and Economic Growth: 50 Years of Failure, Accessed:
November 28, 2012, Retrieved from: http://www.heritage.org/research/reports/1996/05/bg1082nbsp-the-world-bank-and-economic-growth
Unknown Author (July 4,
2003), Taipei Times, World
Bank feeding projects failed: report, Accessed: November 28,
2012, Retrieved from: http://www.taipeitimes.com/News/world/archives/2003/07/04/2003057986
