Relations with World Bank have always been good

It was way back in September 1989. I was visiting Washington with rather grand intentions -- to observe the annual meeting of the World Bank and the International Monetary Fund (IMF), twin organisations. The bank can be called the global moneylender. We castigate it, whether we understand why or not. We call it the pillar of imperialism, the root of all evil.

I went there as a delegate of the advocacy organisation, Third World Network. Civil rights representatives had gathered there from all over the world. The Bank-Fund meeting was being held at the Washington Sheraton Hotel. We had stood in front of the hotel, blocking the entrance, chanting slogans -- "Down with the World Bank", "Down with Imperialism" and so on. Those who had come to attend the meeting were mostly finance ministers or high ranking officials of various countries. Many of them were unable to enter the hotel premises with their cars because of our blockade.

Around 30 minutes passed in this manner. Then the police arrived on the scene. They were grim-faced, batons looped to their belts. Some were carrying revolvers. They told everyone to clear the entrance to the hotel. But who listens to them? There was a hot exchange of words, some pushing and shoving. Many of us moved to one side. But some stayed put and sat down in front of the gate. They were all Americans or Europeans. One was a Filipino -- my close friend Professor Walden Bello. The police hauled up 11 of them. They used plastic handcuffs to restrain their hands behind their backs and took them off in police cars. Someone came up and collected one dollar from each of us to pay an attorney and all 11 were released the next morning.

I was young at the time, hot-blooded. I had considered joining the sit-in with the 11 of them, but later thought I may be denied a visa to this country in the future because of this 'crime'. The Pakistani exiled writer Tariq Ali once burned the American flag in protest against the Vietnam War. I heard that later he became an outcast in America. Walden Bello was not affected though, and he is now a senator in the Philippines.

I related this story in order to explain my introduction to the World Bank. I have visited their office several times since, for various meetings. I do not think my diatribe regarding the World Bank has changed much.

The World Bank was founded even before the United Nations. Many of us are of the perception that this is a foreign institution. Actually it is an international institution. Any country can become a member of the World Bank. There is a common belief that this institution is controlled by the US. That is not untrue, but then again, they control the UN too.

Bangladesh became a member of the World Bank even before it became a member of the UN. Not only is it a member, but Bangladesh is an alternative executive director of this institution from the South Asian quota. The executive director post is reserved for India. Many of our secretaries before going on retirement are given this post as a reward or retreat for two or three years. I have no idea what they do there. I have visited the World Bank headquarters several times to attend the GEF (Global Environment Facility) council meeting, but never saw them there. I had spoken to the Pakistan and Indian representatives there on some urgent work and they readily gave me time.

Bangladesh takes loans from the World Bank regularly. The World Bank is Bangladesh's biggest source of foreign loans. As a least developed country, Bangladesh so long had been receiving 'soft loans'. These loans have low interest rates, sometimes not even one per cent. And these are repaid over a span of 40 years. The first 10 years are the grace period, meaning installments on the loans don't have to be repaid then. It is considered that implementation of a project with those funds takes time. And the investments do not pay off immediately. That is why the 10 year grace period is very convenient for the borrower. According to economic theory, we understand that if you borrow Tk 1000, the value of that amount is certainly not the same after 10 years! In that sense, getting a loan from the World Bank is almost like getting money for free. The World Bank doesn't pay commission to any agent.

The World Bank monitors projects very strictly. Many bureaucrats or contractors do not like the conditionalities. There are loans where one is not accountable to the lender. Many friend countries provide us with such loans at high interest rates

The World Bank was quite popular in Bangladesh as a lender. Then a distance grew between the government and the World Bank over the Padma Bridge squabble. Was it a matter of a certain group conspiring to teach Bangladesh a lesson? There surely will be an investigative study on the matter one day and then the truth will be revealed.

It is true that the World Bank and other lending institutions and countries provide loans to unnecessary, even harmful, projects. The project proposals come from our authorities. For example, it was with World Bank funding that the scope was created for shrimp cultivation that would destroy Chakaria Sunderbans. There is another example. The World Bank and Asian Development Bank run on the same lines. They have invested hugely in our rural infrastructure. Most of these projects are of the local government ministry.

A large number of roads, culverts and bridges were constructed under these projects and these are proving to be a thorn on the flesh now. Canals have dried up, rivers have died, boats can't ply down the rivers and canals, canals have become roads and roads have become rivers. It is now being said these culverts and bridges have to be demolished and reconstructed.

Bangladesh recently signed a USD 2.25 billion (USD 225  crore) loan agreement with the World Bank. Our prime minister and the World Bank president were present on the occasion. The prime minister presented the World Bank president with a picture of the Padma Bridge. A picture of this went viral. This was termed as 'sweet revenge', the prime minister's 'victory' over the World Bank, etc. The prime minister said, Bangladesh has never stepped into a debt trap, has never defaulted on loans. She said, "My presence here [at the World Bank] indicates that we have trust in the World Bank." Relations with World Bank have always been good. There was only a hitch in relations over the Padma Bridge.

If our officials working in the World Bank, or the alternative executive directors, wrote about their experiences, we would be enlightened. We would get to know a lot of the inside story. If not, we simply have to believe whatever we hear.

* Mohiuddin Ahmed is a writer and researcher

* This column appeared in the print an online edition of Prothom Alo and has been rewritten for the English edition by Ayesha Kabir