World Bank Loans to Andhra Pradesh: Financing bloodshed and impunity?

3 February 2004

Human rights activists in Andhra Pradesh have strongly objected to World Bank plans for a new economic reform loan to the state government. In a statement issued 13 December, K.G. Kannabiran, the National President of the People’s Union for Civil Liberties, and K. Balagopal, a leader of the Human Rights Forum, describe the widespread social injustice, violence, and police brutality in the state. They argue that approval of the planned loan, known as APERL 2 (Andhra Pradesh Economic Reform Loan 2), meant to finance structural adjustment and economic liberalisation will both exacerbate social conflict and be equivalent to an endorsement of state brutality.

Andhra Pradesh is the most unequal of India’s four major southern states and has had a long history of conflict and violence. Since the 1970s, Maoist guerrilla movements, known in India as the ‘Naxalites’, have been active in large parts of the State, fighting for social justice through revolutionary change. The movements’ violence has been met with massive state repression, including extrajudicial executions, torture, sexual assault and illegal detentions. India’s National Human Rights Commission is currently investigating over 200 cases of police killings in Andhra Pradesh.

Meanwhile, in keeping with the Indian government’s move towards liberalisation of the economy in the 1990s, the Andhra Pradesh government has been taking major steps to open its economy and cut back state expenditure. A major part of this programme has been the reforms encapsulated in a consultation document called Vision 2020, drawn up in the mid-1990s. The economic reforms have been granted generous financial support by the World Bank. APERL 2 is the second installment of a loan meant to support the implementation of Vision 2020.

granting the loan will only facilitate the growth of authoritarian systems of governance

The reforms have meant a drop in health and educational expenditure, the erosion of workers’ rights, and a collapse in the state’s agricultural support and marketing systems. An internal DFID report from December 2000, cited in The Guardian (7 July 2001), described Vision 2020 as “confused”, “unfocused,” and “inconsistent” and noted that it says “nothing about providing alternative income for those displaced.”

In their statement, Kannabiran and Balagopal describe the government’s approach as “market fundamentalism”, arguing that “[the government believes] resources such as land, forests, water, and nature in general are to be put at the disposal of those who can invest… this can have a disastrous effect on livelihood opportunities.” Forest communities, landless labourers and small farmers are all suffering from policies that privatise government support systems and grant big landowners and large corporations carte blanche over land and forest exploitation. Further, state rollback has meant that health care has been taken out of the reach of the poor; the statement quotes the death of hundreds of children from a 2003 encephalitis outbreak as a typical example.

This market fundamentalism, say the authors, is accompanied by government support for police impunity and brutality in its efforts to repress the Naxalite movement. Pointing out that “a meaningful and effective policy of handling the Naxalite phenomenon can only be a policy that will address [social] deprivation”, the authors say that the government of Andhra Pradesh “has never had such a policy.” Instead, it has engaged in brutal and unconstitutional acts such as the killing of prisoners in police custody, the use of paramilitary gangs to intimidate, assault and murder social activists and human rights workers, and widespread and institutionalised torture of prisoners and detainees. State brutality has triggered further violence from the Naxalite movements.

In such conditions, the statement says granting APERL 2 will only “facilitate the growth of authoritarian or tyrannical systems of governance.” Instead, the statement says that the Bank and the Andhra Pradesh government are accountable to the international community and to the people of the state for promoting true and socially just forms of development. There has been no official response from the World Bank to the statement. The loan comes up for consideration by the Bank board 10 February, and it remains to be seen if the objections raised in this statement are taken into consideration.