Books

Good intentions run awry

Masters of Illusion — The World Bank and the Poverty of Nations by Catherine Caufield; Macmillan; Price: Rs.280; 432 pp

-

It’s a painful truth which nationalists will be loathe to admit. Given the hare-brained communist-inspired socio-economic experimentation of post-independence India, the nation would have dissolved into chaos and anarchy but for the steady and continuous disbursement of long-term loans to this country by World Bank institutions. The subject or quantum of contemporary India’s massive foreign debt estimated at $100 billion (Rs.45,000 crore) is seldom discussed and debates about the deployment of this huge annual inflow of foreign aid are few and far between.

But it’s an indicator of the nation’s international credit rating that over $50 billion of the country’s foreign debt is owing to the International Development Authority (IDA), the soft-lending affiliate of the World Bank which provides long-term interest free loans (charging only an administrative fee of 0.75 percent) to countries whose credit ratings render them ineligible for loans from commercial banks.

The World Bank Group of institutions with its head office in 1818 H Street, Washington DC (the US is the largest shareholder/ subscriber to the capital of the Bank (17 percent)) comprises the International Bank of Reconstruction & Development (the formal name of the World Bank), IDA, the International Finance Corporation (which lends to private sector corporates around the world) and MIGA (Multilateral Investment Guarantee Association — which protects foreign investment abroad). All told the World Bank has lent a massive aggregate sum estimated at $300 billion in its 57-year history mainly to the developing nations of the third world.

But it’s important to note that the bank is a commercial lending institution, not a charity. On the basis of the committed (not fully subscribed) capital contributed by over 100 nations around the world — with the major commitments made by the US and other industrial nations — it raises money by issuing its blue-chip, relatively high-interest bonds which are purchased by private banks, mutual and pension funds in the industrial OECD countries.

These proceeds are lent for projects and programmes (approved and evaluated by the bank’s experts) in developing nations. Conceptualised during the final years of World War II as an institution to establish a stabilisation fund to maintain the equilibrium of foreign exchange rates by lending to nations with acute balance of payments problems and to help the reconstruction of war-ravaged countries, the World Bank began its operations as a project finance institution. In particular it developed the expertise to fund technology-intensive infrastructure projects in the newly-emergent nations of the post-colonial third world, most of whom had been by-passed by the industrial revolution of the 20th century.

A former environment correspondent of the London-based New Scientist and author of several books on environment and ecology, Caufield engagingly recounts how during the past half century the Bank has morphed from a modest project financing institution into a powerful financial behemoth which makes and breaks governments around the globe. Though even-handed, this is hardly an institutional hagiography of the World Bank. On the contrary the author who typically received little cooperation from the management of the Bank or its affiliates while writing this racy yet amazingly well-documented book, recounts its modus operandi and particularly the goof-ups, patronising arrogance and environmental damage caused by the financial missionaries of the World Bank and its affiliates (including the IMF) in embarrassing detail.

In the process she reveals that environment activists and tribals’ champions such as Medha Patkar, Vandana Shiva and Arundhati Roy among others who have been in the forefront of the struggle against the construction of the massive Sardar Sarovar dam across the Narmada are — contrary to popular belief — talking a lot of sense. The very first chapter of this book which reads like a page-turning novel, details the ill-conceived construction of the Sardar Sarovar barrage rising to the height of a 45-storey building, across India’s ‘holiest river’ — the Narmada.

The author seems to entertain little doubt that like thousands of large dams and irrigation projects constructed with World Bank finance and expertise the world over, the Sardar Sarovar will do more harm than good to the people of Madhya Pradesh, Maharashtra and Gujarat whom it is intended to benefit.

As indicated in the title of the book under review, Caufield is less than impressed by the getting and spending efforts of the world’s most powerful banking institution. However there’s no gainsaying that the Bank was conceived with the best of intentions: to lend money, advice and project management expertise initially to the war-damaged economies of Europe and for the past four decades or so to beyond-the-pale nations of the third world ruined by greedy dictators and populist leaders who transformed their nations into giant laboratories for Marxist gobbledegook economics. But as this extraordinary book illustrates with numerous examples, almost from the start the Bank’s leaders and managers with their arrogant assumption of the white man’s burden, violated almost all the most fundamental rules of project management and appraisal, making a hash of the overwhelming majority of well-intentioned initiatives the Bank has taken during the past half century.

The net result is that notwithstanding its strenuous efforts to the contrary, the standard of living and real income per capita gap between the rich and developing nations has widened in the interim. Worse, the incomes divide between the rich and poor in the developing nations has widened even more dramatically. Meanwhile to keep itself and its grossly overpaid bureaucracy in business the Bank which is terrified of defaults, keeps lending so that new loans service the old. And if the money doesn’t run out it’s only because the Bank’s subscribed capital is periodically increased by governments of the industrial nations and of the US in particular.

Inevitably these additional capital subscriptions come from taxpayers in the developed nations. Which validates the verity contained in the wry observation that foreign aid is all about robbing the poor in rich countries to fatten the rich in poor nations.Dilip Thakore

Utilitarian compendium

Travel Wisdom by Lynne and Hank Christen; Aventine Press; Price: Rs.582; 251pp

-

With travel made easier thanks to the plethora of package (adventure, heritage, cultural, and historical) tours and discount deals, there is no stopping the newly liberated Indian traveller. But travel especially across the dreaded kala pani has its own pitfalls. With the ‘war on terror’ in full swing, the new global traveller has to face innumerable checks and verifications. And as if this isn’t enough there is a mountain of groundwork — visas, reservations, itinerary planning, health and security clearances to contend with. Contemporary holidays are short duration, intensive experiences in which even a minor slip-up could prove frustrating and expensive.

Against this backdrop comes Travel Wisdom, a comprehensive how-to-do-it-yourself guidebook by the extensively travelled US-based couple Lynne and Hank Christen. This book is the outcome of the Christens’ travel experiences spread over two decades and 43 countries. "Our goals for this book are two-fold. First, we want to inspire you to turn your travel dreams into reality. Second we want to share the practical tips, tools, and tactics we have acquired through our own travel experiences and research," say the authors in the introduction.

True to its promise Travel Wisdom is a useful, practical and hands-on guide for those interested in making their money go the extra mile. Well-organised into 18 chapters, three appendices and topped off with an index, this utilitarian compendium covers almost every imaginable aspect of travel. The very first chapter titled ‘It all begins with a dream and plan’ which provides tips on how to get started on planning a journey, is sequentially followed by others offering practical travel advice: ‘Packing smart’; ‘Choosing a travel agent’; ‘The dollars and sense of travel’; ‘Travel health and safety’; among others.

Chapters which are likely to prove useful to the new generation of outward bound Indian tourists unshackled from the ancien regime under which foreign exchange was always ‘precious’, are ‘Travel health and safety’ which includes a sub-chapter on being street smart and ‘Minding your travel manners’ which is particularly valuable for Indian tourists who have already acquired a reputation for loud boorishness. Among the basic do’s and don’ts: make the time to learn about your destination; respect local languages and customs; think before you speak; dress appropriately; practice good photo etiquette; go easy on smoking, chewing gum and cell phones, beware of sign language.

Travel Wisdom also contains a useful appendix section providing checklists for planning your travel. The comprehensive checklists detail what you should start doing as early as six months prior to departure. Included is a list of online travel resources; sample packing list for women and men and other travel requisites.

Though Travel Wisdom is an unabashedly ‘how to’ book, it’s a useful guide especially for first time travellers who might be blowing several years’ savings on a once-in-a-lifetime foreign holiday. Sidebars provide valuable insights, travel homework, travel experiences and amusing anecdotes and experiences which combine to make this how-to book lively and interesting. Though this guide seems to be targeted at the middle-aged business and leisure tourists, it’s also useful for younger travellers.