World Bank to go soft on conditions

By Our Special Correspondent

THIRUVANANTHAPURAM, JAN. 9. The World Bank will be withdrawing from the practice of insisting on conditionalities for granting of loans. Instead, the bank would lend on the basis of changes already brought about by the respective countries and States, said the Vice-President of the World Bank Institute, Mr. Vinod Thomas, here on Tuesday.

Addressing a `Meet-the-Press' programme of the local Press Club, he said the World Bank was changing its policy in view of its experience. What is based on coercion could not work for long.

Mr. Thomas said States like Andhra Pradesh now came to the Bank for assistance with the description of what they had done and what they proposed to do on their own to achieve various objectives.

He said Kerala's share among the States in the World Bank lending was low. The Bank was in a dilemma whether an educationally developed State like Kerala needed to be funded for projects like the District Primary Education Programme.

He said Kerala had the educational and ecological advantages and the needed base to join the information revolution. As such, Kerala stood to benefit highly from globalisation. Yet, the reality was different. Kerala would have been considered a miracle for its achievements if its great unrealised potential was not known.

He said that globalisation would be less exploitative as it would be largely information based. Kerala could leap-frog from an agriculture to knowledge-based society. The State could not develop because it missed the agriculture, industrial and electronic revolutions.

He said the World Bank had been giving emphasis for community- based projects. This was because the rate of return on such schemes was better. However, Kerala could not relay entirely on micro projects to achieve its goals. He said civil and political liberties had led to less corruption and wastage. If this was not happening in Kerala, one should ask why.

He said privatisation without a strong regulatory framework would be dangerous. A private monopoly would not be better than a public sector monopoly. Russia landed in trouble with globalisation because the regulatory framework was lacking while China benefited because some sectors were strongly regulated.

The World Bank, he said, had got the image of a bully because it was associated with lending for countries in crisis. Crisis management called for strong action and this is usually painful for the people.

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Section  : Southern States
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