New Bank adjustment policy a step backwards

28 May 2004

The Bank has released a revised draft of its controversial 1992 structural adjustment policy. Comments can be filed until the end of June and a final policy is to be submitted to the Board for approval soon after that. The previous policy was criticised as embodying the ‘Washington policy consensus’ giving no regard to the social and environmental impacts of adjustment operations. The new policy does not use the term ‘adjustment lending’, preferring ‘development policy lending’.

Analysis by Bank Information Centre of the draft’s content points out its failure to address the issue of policy conditionality. The treatment of social and environmental impacts and the need for stakeholder consultations “fall short and actually lag behind standards already in place for certain types of Bank adjustment lending”.

References to the need for staff to consider environmental and social impacts of programmatic lending do not make it an express requirement to avoid or mitigate negative social and environmental impacts. The operational procedures for determining negative impacts remain unclear and therefore unlikely to be effective.

UK NGO Forest People’s Programme sent a letter to the Bank’s senior adviser on safeguard policies Steven Lintner describing the draft as “extremely disappointing”. They point out that it appears to do little to protect forests, contrary to assurances given to the Board and other participants during the forest policy consultations. They have called for the policy’s withdrawal and substantial revision.