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dam-l LS: WB Admits Dam Building is Wrong (sort of)



World Bank admits to past errors, sees solutions
03:38 p.m Sep 15, 1999 Eastern

By Mark Egan

WASHINGTON, Sept 15 (Reuters) - After over 50 years of seeking to reduce
poverty and disease and educate the poor, the World Bank admitted on
Wednesday that many of its past policies were misguided and it needed help
to succeed in the future.

The bank's annual World Development Report painted a bleak picture of a
developing world which has fallen even further behind rich nations despite
the efforts by the World Bank and others to make the world a better place
to live.

It also said that in many ways the bank had failed in its mission to
improve conditions of poverty, disease and poor education in the developing
world and admitted that it can no carry the burden alone if its ideas are
to work.

``Simple solutions -- investments in physical and human capital, for
instance, and unfettered markets -- will not work in isolation,'' the
report said, admitting its past focus had been misguided. ``Governments,
the private sector, civil society, and donor organisations need to work
together in support of broad-based development.''

But the report remained optimistic for the future, laying out a new policy
for the future which builds on the knowledge gleaned from past successes
and failures.

The bank attributed much of its past problems to seeking out a ``magic
bullet'' which would solve the woes of the world's poor.

``The conceptual frameworks for development of the past 50 years ... tended
to focus too heavily on the search for a single key to development,'' the
report noted. ``When a particular key failed to open the door to
development in all times and places, it was set aside in search for a new
one.''

**As an example, the report said projects like building dams -- something
the World Bank was prolific in during the 1950s and 1960s -- can carry
hidden costs and harm communities through population dislocation and other
cultural and environmental problems. **

It also said ``trickle-down economics'' -- the practice of cutting taxes
for the rich hoping it would benefit the poorer in society -- does not
work.

But whatever policies were used over the past 50 years, one thing is
certain: poverty continues to rise. Today 1.5 billion people live on an
income of less than $1 a day, up from 1.2 billion people in 1987. The
report forecast the numbers living at that lowest of incomes would reach
1.9 billion by 2015.

The gap between rich and poor has also widened. Between 1970 and 1985 the
average per capita income for the world's poorest countries dropped from
3.1 percent of incomes in rich countries to just 1.9 percent.

``The fact is that we are not winning the battle against poverty, poverty
is increasing,'' World Bank Chief Economist Joseph Stiglitz told reporters.
``But I think we do have within our reach the ability to improve people's
lives,'' he added.

Learning from past successes and failures, the bank said a more
``holistic'' approach was needed to formulating development strategies.

``In some areas the most effective way to improve educational outcomes for
children may not involve increased expenditures on books or teachers but
instead may involve building a rural road or a bridge across a river to
facilitate access to schools,'' the report said as an example.

The bank's new approach attempts to embrace a more comprehensive approach
which could be adapted for each country. The approach includes the
development of a sound economy but also building stronger legal systems,
banking sectors and other aspects of a nation's fundamental structures.

 Copyright 1999 Reuters Limited.