Saturday, October 6, 2007
‘Privatisation puts too much wealth in too few hands’ - Isabel Guerrero
The World Bank’s new Country Head Isabel Guerrero admits failures and flags the need for changes in a candid conversation with SANKARSHAN THAKUR
http://www.tehelka.com/story_main34.asp?filename=Bu131007PRIVATISATION.asp
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TEHELKA: Tell us, Ms Guerrero, why does the World Bank continue to be such a bad word in India?
Guerrero: I understand why you ask that but I really don’t know, I am trying to understand that, I want to. I have been having lots of conversations, meeting people outside the Bank, from civil society, from the NGO sector, in order to get a sense. We have also done some perception surveys — as you come in, it is a great time to define your agenda, and a lot of that could be based on perceptions outside; those guide me at least in understandinghow effective we can be.
So what do these findings tell you?
Some of the sense that I get is that there is some misinformation. The Bank has advanced a lot in the last 10 years, although it still has a long way to go
What kind of misinformation?
Well, we had sessions in which we were told that we are lending huge amounts of money, that we are a big part of India’s debt, that we were very expensive, that we run governments (laughs) — things like that.
Lots of people do think the World Bank hugely influences government.
As a perception that is probably true but I think most of that is popular perception, not the reality. People don’t realise that we are a very small part of each programme. To give you a sense, in the Sarva Shiksha Abhiyan, we are only 10 percent of the total funds. Then, on the costs, we are supposed to be very expensive. But to give you an example from last year, the lending was $3.8 billion. Of that 1.8 billion was from the IBRD (the International Bank for Reconstruction and Development), which offers more commercial terms. So, on average, the cost of the loans was 2.25 percent, which is very low compared to other sources of funding. India also has a very very low percentage of debt. India is a very large country, we are really small in India.
There are issues about your opposition to subsidies, privatisation issues. People get very agitated about them. There was a tribunal held recently at JNU at which many of these allegations were brought forward. I know you have stock answers on these, but can we go a little deeper…
On subsidies, there were three clear areas in our poverty report. One had to do with empowerment, another with subsidies to the poor and the last to do with the droughts. On subsidies, we think they are a very good thing, they should be available to the poor in a transparent way. Subsidies to the rich in a country that has so many poor? I do not think that is a good thing. Give them to the poor. If you don’t it will go against social cohesion.
Water? Privatisation?
That is big, and world-wide. When your children and my children are grown up, the wars are going to be about water. At least in Latin America and I am sure in India too, water has a huge religious meaning. It is mother, it is soul, source of fertility, life. The meaning of water in the collective conscience is very important and therefore one has to be very careful in getting into it. It’s a lightning-rod issue, you touch it and phew!! The Delhi Jal Board issue was, I think, not well-handled from the Bank‘s side. I had a similar situation in Bolivia and in both cases the same thing happened. The Bank was accused of having pushed the privatisation of water, and in both cases it had not happened. In Bolivia we had reports alerting the government not to privatise water —you do it and tariffs are going to go up 400 percent —and it happened. Yet we were not heard. We made mistakes with the Delhi Jal Board, but it was impossible to be heard that we were not pushing for privatisation. So, we have learnt a lot from this, we have.
Read more on the following link :http://www.tehelka.com/story_main34.asp?filename=Bu131007PRIVATISATION.asp
http://www.tehelka.com/story_main34.asp?filename=Bu131007PRIVATISATION.asp
------------------------------------------------------------------------
TEHELKA: Tell us, Ms Guerrero, why does the World Bank continue to be such a bad word in India?
Guerrero: I understand why you ask that but I really don’t know, I am trying to understand that, I want to. I have been having lots of conversations, meeting people outside the Bank, from civil society, from the NGO sector, in order to get a sense. We have also done some perception surveys — as you come in, it is a great time to define your agenda, and a lot of that could be based on perceptions outside; those guide me at least in understandinghow effective we can be.
So what do these findings tell you?
Some of the sense that I get is that there is some misinformation. The Bank has advanced a lot in the last 10 years, although it still has a long way to go
What kind of misinformation?
Well, we had sessions in which we were told that we are lending huge amounts of money, that we are a big part of India’s debt, that we were very expensive, that we run governments (laughs) — things like that.
Lots of people do think the World Bank hugely influences government.
As a perception that is probably true but I think most of that is popular perception, not the reality. People don’t realise that we are a very small part of each programme. To give you a sense, in the Sarva Shiksha Abhiyan, we are only 10 percent of the total funds. Then, on the costs, we are supposed to be very expensive. But to give you an example from last year, the lending was $3.8 billion. Of that 1.8 billion was from the IBRD (the International Bank for Reconstruction and Development), which offers more commercial terms. So, on average, the cost of the loans was 2.25 percent, which is very low compared to other sources of funding. India also has a very very low percentage of debt. India is a very large country, we are really small in India.
There are issues about your opposition to subsidies, privatisation issues. People get very agitated about them. There was a tribunal held recently at JNU at which many of these allegations were brought forward. I know you have stock answers on these, but can we go a little deeper…
On subsidies, there were three clear areas in our poverty report. One had to do with empowerment, another with subsidies to the poor and the last to do with the droughts. On subsidies, we think they are a very good thing, they should be available to the poor in a transparent way. Subsidies to the rich in a country that has so many poor? I do not think that is a good thing. Give them to the poor. If you don’t it will go against social cohesion.
Water? Privatisation?
That is big, and world-wide. When your children and my children are grown up, the wars are going to be about water. At least in Latin America and I am sure in India too, water has a huge religious meaning. It is mother, it is soul, source of fertility, life. The meaning of water in the collective conscience is very important and therefore one has to be very careful in getting into it. It’s a lightning-rod issue, you touch it and phew!! The Delhi Jal Board issue was, I think, not well-handled from the Bank‘s side. I had a similar situation in Bolivia and in both cases the same thing happened. The Bank was accused of having pushed the privatisation of water, and in both cases it had not happened. In Bolivia we had reports alerting the government not to privatise water —you do it and tariffs are going to go up 400 percent —and it happened. Yet we were not heard. We made mistakes with the Delhi Jal Board, but it was impossible to be heard that we were not pushing for privatisation. So, we have learnt a lot from this, we have.
Read more on the following link :http://www.tehelka.com/story_main34.asp?filename=Bu131007PRIVATISATION.asp
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