Criticism
Though repeatedly relied upon by impoverished governments around the world as a contributor of development finance, the World Bank is often and primarily criticised by opponents of corporate "neo-colonial" globalization. These advocates of alter-globalization fault the bank for undermining the national sovereignty of recipient countries through various structural adjustment programs that pursue economic liberalisation and de-emphasize the role of the state.
One general critique is that the Bank is under the marked political influence of certain countries (notably, the United States), that would profit from advancing their interests.
Another critique is that the Bank operates under essentially "neo-liberal" principles, under the belief that the market can solely, and by its own nature, bring prosperity to nations that practice free competition. In this perspective, reforms born of "neo-liberal" inspiration are not always suitable for nations experiencing conflicts (ethnic wars, border conflicts, etc.), or that are long-oppressed (dictatorship or colonization) and do not have stable, democratic political systems. In this point of view, the World Bank would favor the installation of foreign enteprises to the detriment of the development of a local economy.
On the other hand, liberals criticize the Bank as a purely political organization. In this perspective, the Bank represents the rejection of the belief in the ability of the market to regulate the economy. Liberal critics see it as a state-owned tool, of international economic use, that works to mask the blemishes of currently-practiced policies. In this point of view, the World Bank assumes the responsibility of a liberal economy, rather than leaving governmental polices in their proper place.
Other criticism regarding the World Bank Group relates to the physical and social environment:
Throughout the period from 1972 to 1989, the Bank did not conduct its own environmental assessments and did not require assessments for every project that was proposed. Assessments were required only for a varying, small percentage of projects, with the environmental staff, in the early 1970s, sending check-off forms to the borrowers and, in the latter part of the period, sending more detailed documentation and suggestions for analysis.
During this same period, the Bank’s failure to adequately consider social environmental factors was most evident in the 1974 Indonesian Transmigration program (Transmigration V). Please note that this project was funded after President McNamara’s pledge noted above and after the establishment of the Bank’s OESA (environmental) office in 1971. According to the Bank critic Le Prestre, Transmigration V was the “largest resettlement program ever attempted... designed ultimately to transfer, over a period of twenty years, 65 million of the nation’s 165 million inhabitants from the overcrowded islands of Java, Bali, Madura, and Lombok...” (175). The objectives were: relief of the economic and social problems of the inner islands, reduction of unemployment on Java, relocation of manpower to the outer islands, the “strengthen[ing of] national unity through ethnic integration, and improve[ment of] the living standard of the poor” (ibid, 175).
Putting aside the possibly Machiavellian politics of such a project, it otherwise failed as the new settlements went out of control; local populations fought with the migrators and the tropical forest was devastated (destroying the lives of indigenous peoples). Also, “ome settlements were established in inhospitable sites, and failures were common;” these concerns were noted by the Bank's environmental unit whose recommendations (to Bank management) and analyses were ignored (Le Prestre, 176). Funding continued through 1987, despite the problems noted and despite the Bank’s published stipulations (1982) concerning the treatment of groups to be resettled.
The World Bank (and its sister organization, the International Monetary Fund) is a closed system; that is, the decision-making processes are shielded from those who, in fact, fund the projects: primarily the taxpayers in the member nations. The number of votes allocated to member countries are linked to the size of its shareholding. Membership in itself gives certain voting rights that are the same for all countries but there are also additional votes. The additional votes depend on financial contributions to the organisation implying undemocratic decisionmaking. As of November 1, 2004 USA held 16.4% of total votes, Japan 7.9%, Germany 4.5% and UK and France both ?? each held 4.3%.
