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IFI governance

News

World Bank “pushing big dams” across Asia

20 January 2006

In recent years the Bank has returned to support large-scale hydro, which it financed to the tune of $449 million in 2005. Recent examples from Pakistan, India and China reveal a lack of public confidence in the Bank’s assertion that it has “learned from its mistakes”.

“Forging consensus”

The Bank announced that it will support the controversial 3600-megawatt Kalabagh dam in Pakistan, once President Musharraf has “achieved consensus”. The IMF has also approved the project’s feasibility. This forms part of a larger Bank-endorsed plan to build three dams by 2016 to develop agricultural and industrial growth, and generate inexpensive hydroelectric power as outlined in the recent report Country water resource assistance strategy: water economy running dry. There has been strong opposition to Kalabagh, including from the political parties of three provinces (North West Frontier Province [NWFP], Sindh and Balochistan). According to protestors at a protest rally in NWFP, Sindh province will lose out on the water supply from the Indus river, and areas of NWFP province will face submergence and regular waterlogging.

Quantifying benefits

Canadian NGO Probe International points out that the World Bank gave China’s second-largest hydro project, the Ertan dam, a satisfactory rating on the resettlement of 46,000 people despite serious lack of data. A 2005 report by the Bank’s Operations Evaluation Department (OED) (recently re-named IEG) stated “resettlement appears to have been successful”. However the same report said that it is “impossible to quantify the degree of progress [on resettlement at Ertan] or the extent of the income shortfall of those resettled” because no income data was collected from resettled households. The $2.2 billion dam, now in its eighth year of operation received more than $1 billion in loans and a decade of assistance, the biggest ever loan package extended by the Bank

Indian northeast not for sale

Nearly 20 peoples’ organisations from India’s northeast demonstrated at a two-day consultative meeting on water resources in the region, held by the Bank and the ministry for development of the north-eastern region. Under the Civil Society Initiative Against International Financial Institutions (CSIIFI), the organisations opposed a plan proposing massive hydro developments and demanded that the Bank move out of the region. The plan, which proposes the construction of 116 dams, is alleged to give no consideration to the traditional rights of local and indigenous people over their land and failed to consult civil society groups. In October 2005 the then senior water advisor for South Asia, John Briscoe announced the Bank’s decision to “increase water lending to India from $200 million a year to about $1 billion a year for the next four years”. Details are contained in the draft report India’s water economy: bracing for a turbulent future. The report has been heavily criticised both within India and internationally. Himanshu Thakkar, coordinator of the South Asia Network on Dams, Rivers & People, said “the Bank’s advocacy is not informed by a credible review of the state or performance of India’s water storage facilities”.

Large hydro solves climate change?

During the climate summit in Montreal, the Bank rebuffed criticism that it has failed to “take a leadership role in creating a new framework for clean energy and development”, as agreed at the G8 summit by claiming that it had more than doubled its investment in renewable energy and energy efficiency (RE & EE) over the past year. It then contradicted itself in a report in December 2005 which reveals that 60 per cent of its supposed support RE & EE is in fact for large hydro projects. Patrick McCully of NGO International Rivers Network concluded: “Instead of pushing the much needed rapid scale-up of investment in new sustainable energy technologies, the World Bank is returning to its bad old ways of pushing big dams. This will neither help the climate nor deliver the affordable decentralised power systems needed to reach the 1.6 billion people without electricity.”