June 21, 2000
After considerable delay, the Management of the World Bank is today (Wednesday) expected to recommend that a controversial project to resettle nearly 58,000 poor farmers in Qinghai province should proceed subject to certain conditions. This is despite what is understood to be a highly critical report on the project by the Bank Inspection Panel, which began investigating the project nearly a year ago. The Management response, originally due to be finalised on 12 June, will now be distributed to the Bank Board of Executive Directors for consideration. Full details of the Management recommendations and the Inspection Panel report will only be released to the public after a decision has been made by the Bank's directors.
According to sources both inside and outside the World Bank, the Bank Management will be recommending to the Board of Directors that the controversial "Component C" of the China Western Poverty Reduction Project (CWPRP) should not be cancelled merely on the basis of the findings of the Inspection Panel Report. Although the Inspection Panel Report is understood to have been a scathing critique of the project, confirming that there were significant violations of the Bank's own policy guidelines, a compromise package has been worked out between the Bank and the Chinese government to enable the project to proceed. This establishes new conditions which will need to be fulfilled before the Bank releases the agreed US$40m loan. The Executive Directors of the bank are expected to meet, along with Bank President James Wolfensohn, on 6 July to "consider" both the Inspection Panel report and the Management's response.
The Bank Management response falls far short of the demands of an ongoing international campaign against the project, which has called for its unconditional cancellation. "We want accountability, not an action plan", states the International Campaign for Tibet (ICT), the NGO that requested the Inspection Panel investigation. ICT calls into question the validity of any new compromise with China over the project, stating that although the Board originally approved the project in June 1999 on the basis of assurances by China of greater transparency and "unfettered access" to the project area, these assurances "have been shown to be false".
Denying that the Bank Management have made any "deals", World Bank spokesperson Peter Stephens told TIN yesterday (Tuesday) that having gone through the Inspection Panel report in "enormous detail", the Bank Management have "proposed a number of significant changes and improvements to the project". Declining to provide further detail at this stage, he added that "the approach that we recommend will provide for high levels of transparency, environmental analysis and independent social assessment". Sources familiar with the report indicate that the Bank's new conditions will include the establishment of a Washington-based, independent and international commission and the implementation of new environmental and social impact assessments in the project areas. This could involve another 15 month delay before money is released for the project.
The World Bank has been accused of failing to demonstrate a commitment to its stated policy of accountability and transparency, a commitment which has been stressed repeatedly and emphatically by Bank President James Wolfesohn. The Inspection Panel report and the Management's recommendations will only be made public up to three days after the Board makes its decision. This has led to criticism that open discussion of the IP report has been made impossible, despite a Bank regulation that: "The [Inspection] Panel will seek to enhance public awareness of the results of investigations through all available information sources." (IP Operational Procedures: Article 57). Amongst other calls for the Inspection Panel report to be released, sixty members of the US Congress yesterday sent a letter to the World Bank President, urging him to release the report "before, not after, decisions affecting their [the stakeholders'] lives are made".
The Inspection Panel investigation into the project, the first of its kind to be agreed to following Board approval of a loan, was launched in response to claims made by the Washington-based International Campaign for Tibet that the Bank had violated its own procedural guidelines on the environment, resettlement and disclosure of information. The project, for which the Bank Board of Executive Directors voted, over a year ago, to grant a US$40m loan, is a major poverty alleviation scheme which includes the relocation of 57,775 poor farmers from eastern Qinghai province - mainly Han and Hui Muslim Chinese - west to Dulan county, in Tsonub (Ch: Haixi) Mongolian and Tibetan Autonomous Prefecture.
Delays in Management response
According to Bank procedural regulations, the Management were due to finalise their response to the Inspection Panel report and submit it to the Executive Directors within six weeks of receiving the report (Inspection Panel Operational Procedures: Article 54). This time limit expired on Monday 12 June. That afternoon, the Bank Executive Directors agreed to delay the Management's response for a further week "in response to a request from the Chinese government". A World Bank statement released on 12 June added that China had asked for the delay "to allow some additional discussions with Management". There is no clause in the Inspection Panel Operating Procedures allowing for such a delay, but according to sources within the Bank, it is within the Board of Executive Directors' powers to make such decisions. Although it is apparently unusual for the Board member (in this case China) to request such a delay, the Bank would be likely to grant such a request. As a bank spokesperson put it on Monday, the Board of Executive Directors would not want to "use timing as an instrument to work against the interests of a Board member".
The second delay to the submission of the response was called for by Bank President James Wolfensohn. According to a source within the Bank, Wolfensohn had requested time to make a final review of the response before it was circulated to the Executive Directors. Campaign groups have accused the World Bank of political motives for this delay - the Dalai Lama, who arrived in Washington on 19 June, had a scheduled meeting with US President Bill Clinton yesterday (20 June) and there are suggestions that the World Bank may have decided to wait until the Dalai Lama left the city today (21 June) before submitting the Management response. There have also been allegations that the Bank has decided to wait until the Dalai Lama has completed a second visit to Washington (1-3 July) and for the end of a major Tibetan cultural festival in central Washington (23 June - 4 July) before holding the Board meeting to consider the project, which is expected to take place on 6 July. Sources within the Bank state that 6 July is a likely day for the Board meeting because the Bank President will be able to attend.
Controversy over the resettlement project has not only sparked off an international protest. It has provoked a strong response from the Chinese authorities, who recently accused the Dalai Lama of making "every attempt to thwart the developed countries and the World Bank from providing aid programs to Tibet" (Tibet TV, 30 May 2000). That China, who had previously regarded opposition to the project as "interference in [China's] internal affairs" (Xinhua 24 June 1999), has now agreed to the new conditions proposed by the Bank Management is an unprecedented development and one that indicates how important the project is to the Chinese government.
The Qinghai resettlement project has also caused unprecedented divisions between the other Bank Board Members and even among the Bank's Management. The controversial nature of the project and the sensitivities involved when dealing with China, the World Bank's largest borrower, are clearly indicated by the length of time that the Inspection Panel took to evaluate the project (nearly one year). The project has proved to be a major and expensive embarrassment to the World Bank, necessitating the involvement of Bank staff at the highest level, to an unprecedented extent, ever since international attention was first drawn to the project in April 1999.
FAIR USE NOTICE: This page contains copyrighted material the use of which has not been specifically authorized by the copyright owner. Global Policy Forum distributes this material without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. We believe this constitutes a fair use of any such copyrighted material as provided for in 17 U.S.C íŸ 107. If you wish to use copyrighted material from this site for purposes of your own that go beyond fair use, you must obtain permission from the copyright owner.
