NCPA - National Center for Policy Analysis

World Bank Loans Leave Peasants Dispossessed

August 15, 2000

World Bank officials say that in making loans to Third World countries, they have tried to follow a Hippocratic oath of their own -- to do no harm. But critics say they are doing harm aplenty: giving companies the means to seize the lands of poor and illiterate peasant farmers and boot them into an unstable and insecure future they are not prepared for.

  • A $530 million loan to India to start, expand or modernize two dozen open-pit coal mines has started the expulsion of 10,000 adults from their lands and homes.
  • Critics charge that in Peru a World Bank-financed gold mine has added little to the local economy, while pushing poor farmers from their lands.
  • In, Lesotho, critics allege, the bank hasn't done enough to help those displaced by a series of dams.

While the bank often demands that developers assure the well-being of peasants kicked off their lands, the responsibility for following through is usually left to borrowing governments and state-owned companies -- which frequently have dismal records in this regard.

In the case of the India coal project, many peasants resisted settlement or floundered after losing their farms. Peasants charge that the amounts offered for their lands are puny, and some resorted to lawsuits and civil disobedience. But eventually the bulldozers arrived under police protection and leveled everything.

Founded in 1944 to rebuild a shattered Europe, the U.S.-dominated bank now focuses on Asia, Africa, Eastern Europe and Latin America. The bank is owned by 181 member nations and has a world-wide active loan portfolio of $116.4 billion.

Source: Michael M. Phillips, "Can World Bank Lend Money to Third World Without Hurting Poor?" Wall Street Journal, August 14, 2000.


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