Multinational Monitor

JUNE 2000
VOL 21 No. 6


The World Bank's Revolving Door: Share Program Exchanges World Bank and Corporate Employees
by Charlie Cray

Warning: World Bank Policies Destroy Forests. Internal Report Documents Bank Contribution to Deforestation
by Korinna Horta

Death by Overwork: Corporate Pressure on Employees Takes a Fatal Toll in Japan
by Darius Mehri


The Fight for Water and Democracy
an interview with
Oscar Olivera

Damming Laos, Damning the Poor
an interview with Witoon Permpongsacharoen

Unhealthy Policies from the World Bank
an interview with Dr. Vineeta Gupta


Behind the Lines

Close Down the Masters of Reinvention: The Case for a World Bank Shut Down

The Front
Radiation: Children at Risk

The Lawrence Summers Memorial Award

Names In the News


Unhealthy Policies from the World Bank

An Interview with Dr. Vineeta Gupta

Dr. Vineeta Gupta is the general secretary of Insaaf International, a Punjab, India-based organization working for economic, social and political rights, in particular for the marginalized and vulnerable sectors of society, especially women. A medical doctor by training, Dr. Gupta's active involvement in human rights started as a volunteer in 1986 with the People's Union for Civil Liberties. Dr. Gupta has investigated and reported numerous cases of corruption in government and World Bank-funded projects, custodial deaths and torture, and other human rights violations.

Multinational Monitor: How extensive is the World Bank's involvement in India?

Dr. Vineeta Gupta: The World Bank is involved everywhere you look in India. Even the smallest villages are affected. For example, under World Bank pressure the government has privatized electricity in some states, and there's pressure to privatize other public service sectors, including drinking water. They are also working to cut down subsidies in food and other things.

The World Bank's reach goes far beyond the projects and sectors in which it is directly involved. For example, the Bank approved India's $272 million integrated rural water supply and environmental sanitation project in 1995. A pilot project was launched in the Bhatinda district in two villages -- Kotshmere and Goniana. After there was a change in state government, the new government announced it would provide free electricity to rural areas. In response, the World Bank stalled the project. There is lot of controversy about providing free electricity to farmers, because this policy tends to benefit only richer farmers. Nevertheless, we do not want the World Bank to twist our arm in order to dictate domestic policies. The World Bank tried to use the funding for this project to force policy on unrelated projects. That's just one example of the World Bank using its leverage to create policy.

MM: Can you describe the World Bank's involvement in the health sector?

Gupta: The World Bank is privatizing the health sector in the whole country in a very systematic manner in the name of helping the poor. They are doing this through various state Health Systems Development Projects (HSDPs). The Bank is undermining the state's assumption of responsibility for providing basic health care to its citizens. The poor and women are the worst hit by these projects.

For example, in the state of Punjab, the World Bank-funded parastatal Punjab Health Systems Corporation (PHSC) was established by the state government in November of 1995. PHSC started operations in 1996. Under pressure from the World Bank, PHSC twice tried to increase user fees, but the public outcry was immense and they had to withdraw it both times. The Punjab government has still increased user fees in other ways. For example, doctors used to treat poor people for free. Now every patient has to pay a minimum 10 rupees admission fee. The user fee proposed by PHSC was even more, but due to political pressure the government has slowed down the fee hike.

Other charges for operations and tests, etc. are based on the category of the admission, and they are increasing the costs of treatment in each category. Poor patients can produce a yellow card, an identity card which gives them rights to utilize treatment benefits without payment. But the government has limited the number of yellow cardholders. There are a lot of people -- beggars, migratory laborers and illiterates -- who don't even know the yellow card exists. Meanwhile, there are many rich people who have yellow cards. There is a black market for yellow cards.

These state health corporations were created to address the existing problems in the state run services, but the same set of bureaucrats head these corporations. For example, the secretary of the state health department is also the chairman of the parastatal corporation. There are now two medical systems -- a civil system and a private/corporate system. This has created much confusion among the providers and the patients/beneficiaries as to the demarcation of responsibility, service provision and even between the personnel of the state health department and the corporation. The doctors are the same: one day they work for the corporation and the next they're working for the state health department. There are many cases in the courts where months are spent arguing whether the responsibility is the corporation's or the state-run program's.

MM: How would you describe the World Bank's oversight of the health sector?

Gupta: There is no oversight. The World Bank has heard reports of corruption in the health care corporation but doesn't do anything about it.

I have personally made much effort to contact the World Bank team visiting our area to inspect the corporate hospitals, but I was not allowed to meet with them. It was a guided tour controlled by the healthcare corporation and, as expected, the team went back "satisfied." The World Bank team inspections are nothing but a whitewash. They are "satisfied" as long as their agenda of piling more and more debt on us is served so that they can dictate their policies to us.

MM: Privatization usually means you're selling something and taking in money. Why did India need a World Bank loan to privatize the health care system?

Gupta: It is supposed to be to a five-and-a-half-year assistance loan to the state to put in place a coherent approach to establishing a cost-effective and sustainable health system. They asked for money to renovate the buildings, buy equipment, provide medicine and impart new training. I have been to some of the trainings. All they do is have tea and then leave. It's a sham.

Both the World Bank and politicians in India supported the formation of health corporations as a tool to help the poor and women, who are in fact most affected by these corporatized privatization and user fee policies. There are media reports that there has been a 20 to 40 percent decline in patients since the user fees were imposed. This is because poor people are unable to afford the charges.

I can give you one example that moved me deeply. I was going home from the hospital one night when I saw a very poor woman delivering her baby in a rickshaw. She had been to a private clinic, but they did not take her. Private clinics do not take the poor because of their inability to pay, the potential for litigation, cost of medicines and so forth. So she went to the state corporation hospital. When I worked in the hospital, we used to take these people, even if they were totally poor. But now you have to either pay right at the time of admission or produce a yellow card. She didn't have either, so she was turned back to the street. This kind of thing happens while many beds remain empty.

MM: When the funds come in from the World Bank, who decides how they are spent?

Gupta: It's done through reimbursement. The government spends the money and the World Bank reimburses them. How they spend the money is another problem. There is no transparency or NGO oversight. We keep calling them and writing them for appointments, but they never answer. The money goes through the managing director, who is not only the chairman of the corporation, but also a key player in the state health department.

The expenditures and supplies are not at all based on need and the waste is extensive. In the district of the chief minister the hospital bed capacity was increased from 40 to 100 beds, although many of the 40 beds were always empty. There are numerous well-publicized reports where disposable syringes were supplied without any injectable medicines, where disposable surgery masks and caps were supplied to centers with no surgical facility, where intravenous infusion sets were supplied without intravenous fluids, x-ray machines were installed at places where there are no radiographers, and where nearly-expired medical goods were purchased in quantities far greater than required. The list is endless.

MM: What kind of corruption have you found related to the World Bank's involvement in the health sector?

Gupta: Six hundred million dollars have come into to India for the World Bank's reproductive and child health (RCH) Program. Much of that ends up in the pockets of bureaucrats and politicians. They don't spend it on what they should.

Often substandard and unneeded goods are purchased from dubious companies, often in collusion with unscrupulous health officials. For example, a corruption case was registered against Dr. Jassi, the health director, and others for purchasing goods in violation of the rules. Dr. Jassi is a key political player in Punjab. Soon after the allegation came out in the papers, he was given a promotion to the department that controls all investigations in the state, so he now controls his own investigation.

In another case, we studied the supply and utilization of a lab chemical "Glycerol GR." We obtained a sealed bottle from the hospital supply, which had no authorization number on the label and only a post office box number identifying the company. It had no expiration date.

A warning was clearly written on the bottle: "for lab use only." It was supplied to places that didn't even have a laboratory. We conducted interviews in many district hospitals in Bhatinda, Faridkot and Muktsar, where we found that not a single doctor knew how to use it. They had it confused with another glycerol used to treat cerebral edema, and were giving it orally to patients. Until it was splashed all over the newspapers.

We did a study on commission-based purchasing versus need-based purchasing. Blood sets near the expiration date were purchased in much greater numbers than needed. We purchased just one bucket from the dealer, at a lower rate than the authorities reported from purchasing in bulk. The health officials show the purchase rates below the printed rates, but far above the rates we proved were available. The margins they get are shared by the purchasing authorities with the dealer. We produced the bills to show the higher authorities what was going on, but nothing was done. When our report came out, these blood sets were quickly loaded into trucks and sent to private institutions, where they were given without payment.

There are also people in positions for which they are not qualified, because they pay bribes to get the position. For example, a very corrupt doctor who failed eight times in anesthesia was still appearing for exams and served as head anesthesiologist in a district hospital. There is a price tag for every posting.

We had these problems before the World Bank got involved, but the vast sums involved in the World Bank loans made the problem worse. Huge World Bank loans are given out without any accountability and transparency in expenditure. The money is easy to pocket and there is no oversight.

Last time I was in Washington, D.C., I had an interview with Mr. Tawhid Nawaz, who is the World Bank's senior economist for health, nutrition and population in the South Asia Region. I handed him newspaper reports about corruption and other scandals in the Punjab Health Systems Corporation. But they did nothing. He said, "Well, you know, we can't interfere in your country's domestic matters." I pointed out to him that the Bank has a corruption policy posted on their web site, but he said corruption was a country's internal matter.

We recently developed a project called "The World Bank Accountability Project: The Role of the State and World Bank in Punjab Health Sector Reforms" to document the quality of health services, evaluate the allocation of funds, analyze the effect of combining state and corporate services, and investigate the obstacles faced by the urban and rural poor, especially women, in accessing health services. So far we have not been able to finance the project.

MM: What should the World Bank be doing for India instead?

Gupta: First, the World Bank should stop interfering with our domestic policies. They've created a huge mess. They should just leave. People affected by dams and other projects of the World Bank should be compensated. Second, there should be a thorough and honest investigation of all World Bank projects and stringent punishments should be given to corrupt officials. The money pocketed by them should be recovered.

Mailing List


Editor's Blog

Archived Issues

Subscribe Online

Donate Online


Send Letter to the Editor

Writers' Guidelines