November 9, 2000
Christina Lamb's Nov. 6 article "Foreign aid helps corrupt get richer" contains so many errors about the World Bank that it is hard to know where to start to set the record straight.
The World Bank does not employ 17,000 people, nor does it lend $50 billion a year. It employs fewer than 9,000 and last year lent $15 billion. It does not have a 55 percent to 60 percent project failure rate. To the contrary, according to the independent Operations Evaluation Department, in the past two fiscal years, 81 percent of dollars lent achieved satisfactory results — an impressive figure for an institution that is inherently dealing in risk.
Ms. Lamb goes on to cite Mozambique's cashew industry. She says that the World Bank's advice to drop a tax on cashew nuts cost workers thousands of jobs. In fact, the tax depressed the incomes of about 1 million poor farmers to protect the jobs of about 10,000 higher-paid workers in the processing industry. By reducing the tax, the Mozambique government put more money into the hands of poor farmers. Prices for raw nuts, adjusted for inflation, increased from 10 cents per pound in 1994 to 18 cents this year.
As Princeton economist Paul Krugman has observed, the bank's advice in Mozambique was decidedly pro-poor.
CAROLINE ANSTEY
Head of media
World Bank
Washington
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