Agence France Presse / Pierre Tran
WASHINGTON, April 17 (AFP) - A crescendo of criticism against the World Bank has forced the beleaguered institution to defend its record of fighting poverty, but analysts say the Bank has been its own worst enemy.
Thousands of protestors, under the banner of Mobilisation for Global Justice, have gathered here to shut down the spring meetings of the Bank and the International Monetary Fund (IMF).
The activists, drawn from nongovernmental organisations, labour unions, church and environmental groups, accuse the Bank of keeping the poor down, shackled by foreign debt and exploited by pro-market policies.
Although the Bank has changed largely for the good under the leadership of president James Wolfensohn, it has had a disappointing record in the area of development, analysts said.
"The World Bank has gone through an important intellectual evolution in the 1990s," said Francis Fukuyama, professor of public policy at George Mason University near here. "It has broadened its understanding of development.
"The question is, why did it take so long?
"It has been very slow and there have been a lot of missteps along the way. It has been excessively rigid and ossified. It's like trying to turn around an oil tanker," he said.
However, Wolfensohn told reporters last week that the Bank had "reached out extensively" to nongovernmental organizations representing people from around the world.
He insisted the Bank was "ready to consult and discuss on any issue with anybody" and committed to encouraging civic society and strong political institutions.
But analysts said the Bank's culture is still half-rooted in the past, with bureaucratic inertia undermining the goal of alleviating poverty.
"Some of the anger out there is because, in many of these countries the Bank and the Fund have so much power to determine economic policy, yet there's been this mystique around what's been agreed, because that has not been up to public discussion," said senior policy adviser Veena Siddarth at Oxfam International, a development organisation.
"They haven't been accountable for many years," she said. "If you are a citizen in Uganda or Malawi or Honduras, you can't find out what your government is agreeing (with the Bank)."
The Bank and the Fund were set up 50 years ago under the Bretton Woods agreement in a bid to build a new financial architecture following World War II.
The Bank lends on a long-term basis to poor countries, while the IMF was created to ensure financial stability and to give short-term assistance for countries in difficulty.
The Bank's directors are drawn from finance and development ministers, while the IMF's board consists of central bankers and finance ministers.
The Bank's lending covers areas such as providing water, building roads and schools and tackling inequality -- tangible issues that ordinary people can understand and benefit from.
The IMF focuses on macroeconomic policies aimed at stabilising prices, encouraging states to control spending and meeting their trade bills. It has recently adopted an explicit link to relieving poverty.
The Bank set a goal of halving the proportion of the world's poorest people by 2015. Some 57 percent of the world's population live on less than an average two dollars a day.
But many analysts believe it has a long way to go.
Some said the Bank fails to tackle poverty effectively because it remains focused on projects and misses the big picture.
"The Bank has a Band-Aid approach that doesn't analyse the effects of macro policies on vulnerable groups and doesn't think about how to deal with it," Oxfam's Siddarth said.
"The (Bank's) staff are eager to talk about projects but they don't quite understand how the fiscal and monetary policies are affecting access to basic services and the health sector."
The Bank has shown it has the ability to change however.
It withdrew support for mega-projects such as the Three Gorges dam in China and the Narmada dam in central India under pressure from environmental groups, which pointed to the huge ecological devastation involved in these programmes.
Although changes have been adopted at the top, the old Bank bureaucratic culture still hinders the fight against poverty, analysts believe.
"In terms of poverty, if you look at its overall record you can't give it a very good grade," said analyst Kevin Morrison at the Overseas Development Council, a Washington-based think tank.
"But I would, however, give it a better grade in recent years than five or 10 years ago."
The Bank needs to undergo a deep reform in attitudes and operations, some said.
"From a development point of view, it would work better it didn't work so much as a bank," Morrison said.
"In the past ... it has been acknowledged that you don't get promoted in the Bank for raising 10,000 people out of poverty with one project. What you get promoted for moving 10 loans of 10 million dollars each.
While Bank officials have acknowledged that has been a problem, Morrison added: "I don't know to what extent that is changing."
The Bank could work more effectively if it targeted lending to countries which had their own poverty reduction programmes as the funding leverages on existing efforts, according to analysts.
In countries such as Botswana, India or China, for example, aid granted on a bridge or education project is interchangeable as it frees up the country's own resources to apply to other poverty reduction projects.:
