Disclosure — The World Bank is a funder of Global Integrity.
The Wall Street Journal editorial board rips into the World Bank for giving US$640 million in few-strings-attached loans to Bangladesh and Vietnam, despite their abysmal records on corruption — a fact noted by the Banks’s own research.
Wall Street Journal:
Since May, Bangladesh’s military-backed government has arrested an estimated 12,000 people without charge and confined them to overcrowded prisons. Human Rights Watch reports “well-documented patterns of torture and mistreatment of detainees.” The government has canceled plans for a December election [Update: this claim has been disputed, see comments below] over the objections of the two main political parties, whose leaders have also been in and out of jail.
None of this has deterred the bank from going forward with a $200 million “transitional support credit,” which it says the government needs to deal with rising commodity prices and last year’s Cyclone Sidr. There is also a $120 million “power sector development policy credit” that will “support the government’s overall power sector reform program.” The bank justifies these loans partly on account of the “impressive economic and social gains” it claims Bangladesh has made, and partly because it thinks more money would actually help address the corruption problems.
For a reality check, the bank might have consulted its own experts. According to the bank’s internal data on “governance indicators” in Bangladesh, measures of government effectiveness, political stability, “voice and accountability,” regulatory quality and control of corruption all declined between 1998 and 2007. A report from Transparency International reaches similar judgments.
The World Bank Institute and Transparency International’s corruption perceptions data highlight an international awareness of serious problems in both countries. Global Integrity’s reports on anti-corruption practices in Vietnam and Bangladesh, which use a very different methodology, describe similarly grim results.
The Wall Street Journal’s editorial board, often considered the most conservative voice in mainstream American media, is echoing complaints that left-wing anti-globalization activists have been making about the Bank for more than a decade. When you have that kind of convergence, it’s probably a sign that something is seriously wrong.
–Jonathan Werve
Reaz:
I think you’re right.
The statement in question was from a long quote written by the Wall Street Journal editorial board, not by me, so I can’t tell you where they got their facts. However, I can say you weren’t the only person to notice this sweeping statement by the Journal (see here). If the elections have been canceled, it will be news to a lot of people in Bangladesh. Perhaps the Journal meant to say merely that the elections, scheduled for January, have been long delayed. If so, it’s a fairly major error.
Thank you for alerting us to this, and I’ll add an update to the story.
Who told Mr Jonathan Werve that Bangladesh government had cancelled plan for a December election ? Surprise…Surprise…Surprise….
There is no base of such fact. Instead, government here in Bangladesh repeatedly saying that polls would take place in third week of December 2008.
Reaz Ahmad
Dhaka, Bangladesh.
If an organization can establish strong accountability for the money it is providing and is able to see where every dollar went, by all means lend, because you are also modeling ways to combat corruption. If not, you’re tossing good money after bad and actually encouraging more corruption.
Nathaniel Heller has pointed out to me that our 2007 assessment of Bangladesh has identified a few points of improvement in the country, which contrast slightly the rock-bottom corruption perceptions data put out by TI and the Bank. Bangladesh earned a “Weak” overall rating in 2007. Vietnam earned a “Very Weak” in 2006.
The larger point — that the Bangladeshi government is seems like a obviously poor partner for huge aid flows — still stands.