By Tanim Ahmed*, NewAge, November 5, 2007. Dhaka, Bangladesh
IT IS only natural that, after the publication of the World Bank’s flagship annual World Development Report on agriculture, its president would indicate the bank’s interest to be more involved in the sector. The finance and commerce adviser to the military-driven interim government, AB Mirza Azizul Islam, said as much at a press briefing that followed his meeting with Robert B Zoellick on Saturday. The intended involvement would understandably hinge on the findings, recommendations and conclusions of the development report that provide valuable pointers to the direction that the multilateral lending agency would like to pursue.
There is little doubt that agriculture remains the most crucial sector in developing countries, which, needless to say, are agriculture-based economies and typically have the largest segments of their populations engaged in the sector. In the case of Bangladesh, agriculture currently contributes just over a fifth of the GDP but employs over half the labour force. At least a third of the population is dependent on this sector for their livelihoods. Since most of the rural poor, who are among the most marginalised and deprived, are engaged in agriculture, it is intuitively posited that a sustainable agriculture which is profitable would benefit them and contribute to reduction of poverty and the ever-widening disparity. It would, however, be important to ascertain how exactly investment in agriculture would lead to poverty reduction and human development. The development report does not touch upon the issue and suggests that any improvement of agricultural commerce, in whatever form or mode, would lead to poverty reduction, without clearly establishing the link between agricultural growth, suggested mode of innovation and transformation and poverty reduction.
Most controversial is perhaps the unquestioning support to fully exploit the benefits of biotechnology and genetically modified organisms that the development report provides. To strengthen its case the report draws upon the experience of Bt cotton without mentioning the devastating effect it has had on the livelihoods of thousands of farmers in India. The Deccan Development Society, which works with grassroots farmers, has convinced the government of Andhra Pradesh, an Indian province where farmers had been the worst hit, to kick out Monsanto that had developed and marketed the seeds of Bt cotton. There were reports of angry farmers vandalising the local offices of the biotech multinational. None of it was mentioned in the report, though.
Such omissions, however glaring or minute, which contradict a foregone conclusion, as internal reviews and external research prove, are largely by design rather than by default. The nagging suspicion among the critics of the multilateral lending agencies that their research was not entirely reliable became all the stronger when Joseph Stiglitz had to leave his position of the chief economist of the World Bank, which also claims to be the world’s knowledge bank, after a difference of opinion with the US Treasury about the contents of another World Development Report, Attacking Poverty, in 2000. That report turned out to be one that had been used for several years to decide upon the right policies for poverty reduction. There have been several other untimely exits of senior researchers who did not quite toe the line, including William Easterly and Ravi Kanbur.
Robin Broad’s article on how the World Bank ensured ‘paradigm maintenance’ through its research was a severe blow to the credibility of this bank’s research. ‘Research, Knowledge, and the Art of “Paradigm Maintenance”: The World Bank’s Development Economics Vice-Presidency (DEC)’ was published in the Review of International Political Economy in August 2006. Broad, a professor at the School of International Service at American University, concluded, after a ‘look inside’ the department concerned and two dozen interviews of current and former staff of the bank, that ‘through its research, the World Bank has played a critical role in the legitimisation of the neo-liberal free-market paradigm over the past quarter century and its research department has been vital to this role. As activists working on the World Bank explore which parts of the Bank should be eliminated or reformed, they should look closely at the Bank’s research department as well as its external affairs department which disseminates broadly this less than objective research.’
She refers to the much-cited work of David Dollar that apparently ‘exemplifies the “paradigm-maintenance” role.’ It basically posited that it was empirically proved that countries committed to liberalisation, privatisation and the free market — in others words, the firm believers of the Washington Consensus — achieved higher growth than those who were averse to globalisation and the free market. Broad describes six mechanisms – hiring, promotion, selective application of rules, discouraging dissenting views and manipulation of data – by which the development economics vice-presidency performed in the role of perpetuating the imperialist hegemony.
Soon after came the damning blow by way of an internal evaluation of the World Bank’s research between 1998 and 2005 headed by Angus Deaton, a professor of economics at Princeton University. This evaluation slated two articles by Dollar, including the one that Broad discusses, as being flawed and concluded that the lending agency had placed undue importance on just one paper to advocate policy setting. The other paper that this panel criticised was one which concluded that aid is more effective in countries with good policies. Through interviews of previous and current staff of the World Bank the panel found that research which challenged the agency’s goals or operations was actively discouraged and subjected to endless reviews. The panellists also said conclusions of some of its flagship publications, such as the World Development Report, were negotiated earlier and the entire exercise was conducted to prove those conclusions. The panel rightly observed that these publications, although based on flawed research, were disseminated by the World Bank with much zeal and enthusiasm and have a direct bearing on decisions that policymakers take across the world. Its publications go on to form the opinion of an inordinately large number of development practitioners, bureaucrats and politicians who would then sincerely act as tools that further agency’s agenda on their own.
When Mirza Aziz was asked about the people’s tribunal on Saturday on the lending agencies — announced on the same day as the arrival of Zoellick — he pointed out that these organisations provided almost half of the development budget. His questioning manner suggested that the finance adviser would only be convinced with robust analyses of the economic effect of halving the development programmes of the government. One, however, wonders if he had the same attitude during his meeting with Zoellick or Thomas Rumbaugh when the IMF delegation visited Bangladesh in September. It is painfully clear that the finance adviser and his colleagues running the government would unquestioningly abide by a certain agricultural policy that the World Bank suggests despite the contradictory opinion from local economists and experts as they have in the case of the precautionary monetary policy prescribed by the International Monetary Fund. Surely, Mirza Aziz did not ask for a robust analysis of the agency’s conclusion.
Furthermore, to maintain this intellectual hegemony, the World Bank has begun to produce a far higher number of publications on development and poverty reduction since the introduction of the poverty reduction strategy paper. Besides providing the guideline for its preparation, the World Bank ensures that its agenda is fully reflected by the ‘home grown’ poverty reduction strategy by ensuring that an academic who is within its fold is charged with authoring the report. The volumes of publications are merely pointers of how to devise development policies.
While the poverty reduction strategy of Bangladesh is supposedly ‘home grown’ and while the decisions to privatise public sector jute mills or increase of fuel prices were also taken by the incumbents, they typically resemble exactly what those agencies had prescribed or would have prescribed. Although there are numerous studies, research and practical examples from other countries that have industrialised and developed by not following the prescriptions of the lending agencies, decision makers hardly take them into cognisance.
That the international financial institutions only look to further the corporate interests of large multinationals based in countries that drive these agencies has been pointed out repeatedly. For instance the Asian Development Bank provides funds for infrastructure, roads and highways because it would only increase the demand for cars in Bangladesh. Provided that an overwhelming proportion of the cars in Bangladesh are manufactured by Japanese companies, Japan would naturally be interested in helping such a market to build more roads.
Although the WB president appointment is typically linked with the foreign policy interests of the lending agency, such matters are hardly questioned around the world. It is due to the hegemony of knowledge that these agencies together create and perpetuate through the popular media.
One of the goals of the People’s Tribunal on WB-IMF-ADB is to point these out and create a general awareness among the people so that they raise such questions. It is this myth of omnipotence in development research that the tribunal would want to deconstruct through presentation of cases with exhaustive and convincing evidence as was mentioned during its announcement. People in other parts of the world are increasingly questioning these lending agencies. They are being rejected from Latin America after years of persecution through the neo-liberalist paradigm that eventually ensure annihilation of the marginalised communities and prevalence of large capital increasing disparity, which is quite visible in Bangladesh too. These agencies are faced with strong opposition in East Asia where countries engage in serious negotiations. The IMF prescriptions have already elicited an unprecedented note of protest from the top business bodies and chambers of commerce in Bangladesh. Organisers of the tribunal rightly believe it is time to send a clear message that the policies imposed upon the government will be questioned and challenged.
*Tanim Ahmed can be reached at: firstname.lastname@example.org