Infrastructure update: Wolfowitz "watching for arrogance"

Kathy Sierra, Bank vice-president for infrastructure, struck a conciliatory tone with CSOs, opening this meeting by saying that the Bank "intended to learn the lessons of the past". Over the next few years, the Bank will increase lending for infrastructure at the rate of $1 billion per year, until the portfolio reaches 40 per cent of total Bank lending. Emphasis, said Sierra, will be on global issues - especially a "low-carbon future", regional projects, sub-national lending and community-driven development.

On the role of the private sector, Sierra said that the "hope that the private sector was the panacea was naive." The Bank would be pragmatic on subsidies, and thinking was evolving on fiscal space for spending on infrastructure.

Sierra said that new president Wolfowitz felt that the Bank had been wrong to get out of infrastructure in the 90s. However, he warned Sierra that he would be "watching for arrogance" in anticipation that infrastructure people might "look for technical fixes".

Peter Bosshard of NGO International Rivers Network opened for the CSO side, stressing a number of points:

• The Bank has failed to appreciate the vested interests in infrastructure;
• Failure to consult with CSOs, especially on options assessment;
• Need to focus on infrastructure for the poor, such as rural electrification and irrigation;
• Efficiency investments should be emphasised over 'bricks and mortar';
• Environment must be mainstreamed.

On the question of corruption, Sierra responded that the Bank needed to broaden the discussion to the specifics of each sector. She said there was "a lot of work to do" and raised the possiblity of co-hosting a workshop on the issue. She said that the infrastructure progress report had done a "lousy job" discussing access for the poor and the importance of operational maintenance, but she assured participants that these issues were prominent in her staff's plans. She admitted that in the past, much of the effort in mainstreaming the environment had been only in rhetoric, but that, especially in high-profile cases, the Bank would be "spending a lot more effort".

Other discussion points included:

• On following up the G8 climate change plans: the Bank will look at financing instruments to help countries which are key carbon contributors, support new technology adoption, and adaptation efforts.
• Jamal Saghir, head of the Bank' water department, said there was a need to move to "small towns", typically ignored between large urban development and community efforts. There was no more blueprint for reform in water and there were fewer benchmark conditions than in the energy sector. He was unsure how much demand there would be for a new risk mitigation measure.
• On transparency: disclosure of power purchase agreements remains controversial. No policy on disclosure of REDIs (a new standardised Bank assessment of infrastructure called 'recent economic developments in infrastructure'). The Bank would like to make more progress on transparency of host government agreements by encouraging governments to go further. Saghir promised to hand over a list of all dams in the pipeline.
• On the sequencing of government reforms (whether before or during infrastructure investments), Sierra felt that the Chad-Cameroon pipeline project "has it about right".
• The Bank had not changed its policy on support for nuclear power, but were "getting a lot of questions about it".

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Published: 27 September 2005 , last edited: 27 May 2010

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