Dam wrong

new World Bank book fails to convince critics of large dams

27 November 2008

A forthcoming World Bank commissioned book on large dams stresses their purported economic benefits whilst inadequately addressing serious social and environmental costs. The book is a further indicator of the Bank’s preference for large dams.

The book, entitled Indirect economic impacts of dams: Case studies from India, Egypt and Brazil, sets out to evaluate what the authors feel is an often neglected component of dam projects, their indirect and induced economic impacts. It does this through four empirical case studies that measure the total economic benefits of the dams in relation to their observable direct benefits; and assesses the distributional and poverty reduction impacts.

Blind spots

With only four case studies, the book is significantly narrower in scope than the World Commission on Dam’s (WCD) 2000 report, Dams and Development, which included 10 case studies and 100 technical studies across 125 dams (see Update 20, 27, 47).

Unfortunately, what it lacks in scope is not made up for in depth. By simply addressing the indirect economic benefits of the dams, it fails to fully evaluate their social and environmental costs. Additionally, the dams are hailed as the primary causal factor in cases where positive results can be otherwise explained. For example, the growth in agricultural output around Bhakra in India might alternatively be explained by the industrialisation of that sector. In the mean time, agriculture is suffering due to the adverse effects of the dam such as degrading soils and falling groundwater tables.

Critical voices have been quick to emerge. On his blog, Peter Bosshard of International Rivers claims that the book is a clear example of the biased, politicised research the Bank was accused of in the 2005 Deaton report (Update 54) and is "the parting shot of the Bank´s main large dam crusader, John Briscoe." Briscoe, the Bank´s senior water advisor and a long time advocate of large dams concludes in the last chapter that the results confirm "the transformative role of large water infrastructure".

In a review of the book, Himanshu Thakkar, the coordinator of the South Asia Network on Dams, Rivers and People argues that "this is clearly a biased exercise" and is "not helpful in filling the gap in the Bank´s work." Furthermore, he claims that the studies themselves "are full of inaccuracies, exaggerations and omissions."

Lessons still to be learned

Whilst a spate of new and recently revived dam and water projects suggests that the Bank’s bias towards large infrastructure is here to stay, it is harder to find evidence that the motivation behind these investments lies with their poverty reduction mandate.

Private investors are likely to be the main beneficiaries of a dam in the Democratic Republic of the Congo. Inga 3 will form part of the Grand Inga Dam, a structure surpassing the Three Gorges Dam in China in scale and likely to cost upwards of $80 billion. However, as Washington-based NGO Bank Information Center (BIC) comments, "the development benefits remain unclear since output will be directed towards the expansion of mining operations as well as power exports."

With the Nam Theun 2 hydropower project in Lao PDR (see Update 45, 59, 60) it seems again that the poor are not the priority. In her June report, Damming for development: Lessons from Laos, Shannon Lawrence of NGO International Rivers criticises the project for failing to involve the local population in a process that has so far led to the displacement of upwards of 6000 people. In June, measures were not yet in place to ensure that the needs of resettlers and communities downstream from the dam are sufficiently addressed. Furthermore, "while Nam Theum 2´s engineering deadlines have been met, social and environmental programmes have stumbled ever since construction started".

The Bank’s penchant for supporting large infrastructure projects extends beyond dams. On 1 September the Bank signed an agreement with the government of Egypt for $145 million over four years to finance a new irrigation system. Whereas previously irrigation of the Nile has been under public control, this will be a public-private partnership (PPP) project. Although the project is touted to generate employment, a report by Bank Information Center argues that the introduction of new technologies is expected to limit the amount of new jobs and that "the main beneficiaries will mainly be investors with significant capital". Work is due to start in early 2009, and it is as yet uncertain whether the project will guarantee water access for the poor.