The Multinational Monitor

July 1980 - VOLUME 1 - NUMBER 6


Book Reviews

Food Aid: A Bitter Harvest?

The World Bank and the Poor
by Aart van de Laar
Martinus Nijhoff Publishing
269 pages, U.S.$15.00.

Seeds of Famine: Ecological Destruction and the
Development Dilemma in the West African Sahel
by Richard Franke and Barbara Chasin
Allenhold Osmun, 284 pages, U.S.$19.50.

The Brandt Commission and the U.S. Presidential Commission on World Hunger have issued reports assessing global poverty and hunger and making recommendations for addressing the "root causes" of widespread suffering. Prominent among those recommendations-in what Brandt commissioners have labelled a "programme for survival"-is a massive increase in development assistance from the industrial countries to the governments of the Third World."

But Americans who are concerned with the serious issues raised in these reports have a need to know whether current institutional structures and programs for channeling development aid are adequately confronting the forces that generate poverty. Two new books provide evidence about the design and impact of U.S.-funded programs on the Third World's poor, thus facilitating a more informed judgment.

In The World Bank and the Poor, economist Aart van de Laar has focused on the evolution of policies within the World Bank, the world's largest development lending institution, examining whether the Bank has carried through with its professed policy to reorient its activities toward assisting the indigent in the Third World. His study centers on the changing lending priorities of the Bank group's two major operating entities, the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA), exploring the groups of countries and types of programs that have received the support of the Bank over the past three decades.

Seeds of Famine, by anthropologist Richard Franke and sociologist Barbara Chasin, also presents an assessment of Western-funded development institutions, in this case a regional scheme known as the Sahel Development Program, which is supported by funds from the World Bank, the U.S. Agency for International Development (AID) and European aid agencies.

Few Americans are familiar with the far-reaching impact that the World Bank and USAID have on the development planning of many Third World governments. Fewer still know how such aid agencies are organizationally structured, an aspect crucial to the design and outcome of their projects. Van de Laar's book provides an invaluable overview of the organization of the World Bank Group, explaining the Bank's financing, membership structure, staffing policies and project development processes in a concise fashion.

A better comprehension of these structural features can allow us to get beyond the widely held notion that the World Bank is a "neutral" multilateral institution. We begin to see that the Bank, like much of the bilateral aid from the industrial countries, plays the tune of those who supply it with the money to operate-the private capital markets and national treasuries of the industrial countries.

The political and economic constraints built right into the World Bank's institutional structure become apparent in van de Laar's evaluation of loan allocations to various countries grouped according to average per capita GNP. While one might expect that a shift toward the "poorest" countries would have resulted from the World Bank's widely acclaimed "assault on poverty," van de Laar reveals no such trend.

Van de Laar found that over the nine-year period up to 1978 that IBRD lending to a group of better-off developing countries' (per capita GNP $1000-$1500) had not dropped significantly, even though this measure would indicate more `need.' Nor is it unusual that IBRD lending to 33 countries, with combined populations of over 1 billion in 1975 and all belonging to the lowest income group, rose from a meager 8.9 percent to only 9.6 percent of new commitments.

But van de Laar's method of analysis, placing a disparate set of countries into a group based on a superficial quantitative measure of genuine need, doesn't really serve to clarify the priorities of World Bank lending. For instance, while he identifies one group of 17 'not-so-poor' countries as having made substantial gains in IBRD commitments over the period, we later learn almost incidentally that only four of these 17 (the Philippines, Morocco, Thailand and Egypt) together accounted for almost four-fifths of these larger commitments. All four are, or have recently become, heavily pro-Western regimes and are considered strategically important to the United States, probably accounts for their favorable treatment.

Van de Laar's discussion of the design of World Bank projects reveals a bias toward establishment of autonomous government agencies for implementation of Bank-funded programs. But the Bank's "pursuit of effectiveness," van de Laar cautions, "strengthens the accountability of the government of the autonomous agency to the World Bank and weakens the accountability of the government to the people of the country. In pressing for the limitation of undesirable domestic political influences, the Bank weakens the legitimate political foundations of responsible government ... and by concentrating power in autonomous agencies,, managed by `neutral' technocrats, helps set the stage" for authoritarian government."

In a later chapter van de Laar steps beyond the institutional issues into questions about the effectiveness of the Bank's rural programs in providing benefits for the poor. To his credit he looks not only at the overall trends in allocations toward the agricultural sector-a measure which many superficial analysts of the Bank's programs accept as an indicator of the Bank's "commitment to the poor"-but also delves into the socio-economic impact of a number of Bank-funded rural development schemes, including those promoting land reform and resettlement and increasing small farm productivity through introduction of "green revolution" technologies.

Van de Laar pinpoints the fatal flaw in the World Bank's approach: the lack of recognition of conflicts of interests between the rich and the poor in rural areas. Summarizing from a number of major studies on the impact of the green revolution, van de Laar finds that:

" . . . rural development projects whose target group is the poorer segment of the community will be more strongly resisted than programmes which the rural elite can manipulate to their own advantage by controlling access to rural resources which are provided from the outside. Under such conditions Bank-assisted programmes may well aggravate the plight of the rural poor, however well intentioned they may be."

From The World Bank and the Poor we gain a good sense of just how wide a gap stretches between development rhetoric and reality. But while pointing out the inadequacies of the current structures and approach of the World Bank, van de Laar leaves the reader feeling rather befuddled about what to do about the aid programs Western countries are supporting. Should we work to improve them or try to stop them? What are the alternatives?

By focusing on the actual ground-level impact of development programs, Franke and Chasin's study of the Sahel yields more definitive answers to these questions. For while the Sahel Development Program is channeling mote' development aid per person than any other program in the world, the authors frighteningly conclude that its continuation "threatens the majority of Sahelians."

Seeds of Famine provides an essential historical background for understanding the development dilemma of the region today-tracing the sources of environmental degradation and impoverishment back to colonial intervention by the French who introduced cropping systems which were externally oriented (peanut cash-cropping for export) and which served to destroy the more balanced traditional economic patterns.

Franke and Chasin characterize the approach of Western development agencies guiding Sahelian governments as a haphazard "rush to food self-sufficiency" often dictated by "the ideology of the quick return." What on paper appear like well-conceived projects for increased output of food seem destined to further exacerbate conflicts over land between sedentary farmers and migratory herders.

Similar to van de Laar's analysis, Seeds of Famine shows how a number of projects to raise grain and livestock output end up having differential benefits on different strata of farmers. In many agricultural projects, for instance, no attention was given to issues of land tenure despite evidence suggesting highly skewed ownership of land in project areas. One AID project officer, when confronted with such evidence in an agricultural project in Gao, Mali, stated: "We don't get involved in the land problem; ... This project is strictly technical." Is the Sahel required to repeat the costly mistakes of the "green revolution" in Asia, where increased food production has led primarily to the formation of a new class of rural entrepreneurs, while forcing the small farmer; tenant and sharecropper into the ranks of the unemployed? Seeds of Famine points to such an outcome if World Bank and AID plans are executed.

Seeds of Famine also outlines the broader array of interests which have lured the industrial countries into greater involvement in Sahelian "development." Western-based multinational corporations are heavily involved in mineral extraction projects, especially in Niger and Mauritania, in some cases with the financial support of the World Bank. International private investors have joined in agricultural ventures as well, particularly for the export production of luxury crops.

The involvement of multinational agribusiness has gone beyond investments in luxury and export crop production. Citibank, for example, has backed up a Senegalese government plan to the tune of $30 million for development of a 30,000 hectare high technology rice plantation being planned under a contract with International Systems and Control of Houston, Texas. The 50/50 venture between the Senegalese government and U.S. private capital aims to increase rice output to meet expanding urban demand. Unfortunately for those small farmers in the area who have been growing rice by traditional methods, the government plans to evict them under Senegal's "socialist" land reform and offer them jobs as wage laborers on the plantation. Here, as elsewhere, the rush to develop food production ignores the crucial issues of who controls and who benefits from development.

Franke and Chasin have contributed more than simply an evaluation of development projects: they have illustrated the much broader economic and political context in which aid programs function. This level of analysis is crucial to any evaluation of development in the Third World, and we may hope theirs will serve as a model for other scholars to follow.

The final chapter of their book presents what they have found to be the beginnings of alternative development paths for the people of the region.' Their evaluation of five development projects sponsored by such private voluntary organizations as the British War on Want, Oxfam, and the American Friends Service Committee shows that it is indeed possible for outsiders to promote economic advances while facilitating increased participation of the poor in the direction of the development process. They do not idealize the alternatives, however, pointing out the many difficulties and contradictions that arise whenever new technologies and resources are introduced into an impoverished community.

One project funded by a Belgian-based foundation has supported a major redistribution of land in a floodcontrolled/irrigation area near Timbuktu in Mali. Land which had been controlled by the powerful bureaucrats and local merchants has been parcelled out among families and traditional working groups on an equal share basis only to those willing to work it. The project now faces the challenge of over= coming the exploitative trading practices of Timbuktu grain merchants, a transformation equal in importance to the land reform itself.

These alternative projects, regrettably described only briefly; contrast sharply with all that is presented before them. They prompt the reader to look back and question just what our aid agencies mean by development.

- David Kinley

The author is the coordinator of the Aid Education Project of the Institute for Food and Development Policy in San Francisco. He is co-author together with Frances Moore Lappe and Joseph Collins of the just-released Aid As Obstacle: Twenty Questions About Our Foreign Aid and the Hungry (Institute for Food and Development Policy, S a n Francisco, 1980).


The World Economic Crisis: A Commonwealth Perspective

This recently released report, the result of a year-long study commissioned by the Commonwealth Conference last August in Zambia, focuses on the vulnerability of developing countries in the present world economic order. More so than the Brandt Report, the Commonwealth study relates macroeconomic problems to their actual effects on human lives.

Stressing that a failure to come to grips with economic instability and inequity might lead to starvation for millions of Third World people, the study suggests certain policies that might be enacted to avoid such a catastrophe.

Among its recommendations are liberalizing of trade, financing balance of payments through such institutions as the World Bank, IMF, and OPEC, devising a global energy policy, increasing food production, and standardizing a policy of food relief.

A copy of the report costs 1, and is available by writing:

Commonwealth Secretariat
Marlborough House
Pall Mall
London, England SW14 5HX

Panama's Copper and Canadian Capital

This recent report of the Latin American Working Group (LAWG) examines the impact of the Cerro Colorado project-the world's fourth largest copper mine-on the country of .Panama. Citing potentially devastating effects on the economy, environment and culture of Panama, the LAWG study draws attention to the hazards of foreign-dominated mineral enterprises.

The report documents the role of Canadian private and public investment in the mining venture, noting that Texasgulf, a Canadian firm largely government owned, has the power to make all the important decisions in what was to be a Panamanian controlled project. In addition, the 31-page study reveals the heavy influence of Canadian government export agencies, which are offering $1 billion in credit for the project.

For a copy, send $3.50 to:

Latin American Working Group
Box 2207, Station P
Toronto, Ontario
Canada, MSS 2T2


Global Electronics Information Newsletter

Already known for Pacific Research, the Pacific Studies Center has launched a new publication. Appearing monthly, Global Electronics covers what it views as the archetype of an internationally-divided assembly line.

Although the periodical focuses on semiconductor production in Asia, it also highlights developments in other areas. The first two issues contained information on the electrical equipment industry in Puerto Rico and Ireland, and carcinogens threatening electrical workers in California.

The newsletter hopes to create a worldwide network linking activists and researchers. It encourages readers to send reports and information requests.

For 12 issues, send U.S.$5 ($15 foreign airmail) to:

Pacific Studies Center
867 West Dana Street, #204
Mountain View, CA. 94041

ARC Bulletin

The Anthropology Resource Center now provides a bi-monthly publication about the "current situation of Indian peoples in Brazil." The Bulletin is geared particularly to Indian rights activists in the United States and Latin America, and more generally to progressive academics, environmentalists, and human rights activists.

The latest Bulletin-Number 2 included an article on a World Bank plan to finance a highway through Indian lands, which would jeopardize the existence of 620 Manbiquare Indians, and a discussion of a hydroelectric project likely to expropriate acres of Brazil-nut plantations which traditionally serve as the principal source of income for the Gavioes Indians. In addition, the Bulletin described recent reports and articles relating to Latin American Indians rights.

The subscription price is $5.00 per year. For more information, write:

ARC Bulletin
Anthropology Resource Center
59 Temple Place
Suite 444, Boston, MA 02111


Africa Research and Publication Project

Founded in 1978, this group aims to inform African activists and students residing in the United States, as well as concerned Americans, of events and trends on the African continent.

The Project acts both as a research base and a clearinghouse for information. The organization's files, broken into three categories-multinationals, politics, and countries-are open to the public.

Currently, the Project is coordinating a campaign against Kaiser Aluminum in Ghana, and it is disseminating material about the infant formula issue to Africans here and on the continent. In addition, the Project receives up-to-date reports from its many contacts in Africa, which it then distributes in this country.

For more information, write:

Africa Research and Publication Project
P.O. Box 1892
Trenton, N.1. 08608

Table of Contents