South Sudan development and the World Bank

Paul Wolfowitz was forced to resigned as World Bank president because of financial favors he bestowed upon a Bank employee who also just happened to be his girlfriend. There are many who believe that act was the least of Wolfowitz's indiscretions. For many poor nation's where distrust of the World Bank was already high, President Bush's appointment of Wolfowitz signaled that the Bank's strategy would surely be an extension of the Administration's foreign policy. And that was not a reason to rejoice -- especially in sub-Saharan Africa. (GW)

World Bank contribution in Sub-Saharan Africa with focus on Southern Sudan

By Jacob K. Lupai*
Sudan Tribune
May 20, 2007

A lot has been written about the World Bank involvement in Sub-Saharan Africa and in the other developing regions of the world supposedly to promote development in order to eradicate poverty. In most cases the World Bank has been described as the promoter but not the eradicator of poverty because of some of its insensitive conditions that have left the poor poorer. The World Bank structural adjustment programme (SAP) is a case in point that has promoted poverty instead. However, it may not be very helpful to dwell too much on the SAP for the sake of discrediting the World Bank. It may be appropriate instead to take a fresh look at the World Bank in critically examining its role in promoting development in Sub-Saharan Africa to eradicate poverty. In view of this the specific question to ask is whether the World Bank is of any relevance given the experience of the last fifty years or so.

The World Bank was the creation of the USA and its European allies in the 1940s in the effort to help Europe cope with the aftermath of the Second World War. Understandably it was a noble project. To the USA and its European allies the World Bank also proved valuable during the Cold War between the East and the West blocks as the bank loans were employed to gain support from many poor countries in the so-called Third World. The USA and its allies agreed that the president of the World Bank would always be appointed by the USA while Europe would provide the head of the International Monetary Fund (IMF), a twin sister of the World Bank. The implication is clear that the World Bank would be serving the best interest of its founding fathers.

The World Bank’s focus on eradication of poverty in Sub-Saharan Africa and on other developing regions was more of rhetoric than a very serious endeavour to eradicate poverty as evidence shows that many from those regions still live on less than $2 a day while the USA and Europe are the richest in the world. What might have gone horribly wrong with the World Bank glorified endeavour to eradicate poverty, for example, in Sub-Saharan Africa? Answers may not be difficult to come by as the World Bank main priority was to serve the interest of its founding fathers and had no qualms to offer lip service to the poor. The grim statistics on poverty have become increasingly well known. This may explain the UN declaration of Millennium Development Goals (MDGs) to be achieved by 2015. The MDGs will be revisited later in the article.

The World Bank loans to Africa in most cases brought misery to the poor in terms of the burden of debt payment. To put up a face of a benevolent benefactor the World Bank expanded its programme to include issues of governance and capacity building, social capital, institutions, poverty reduction, sustainable development and so forth. How the face change has enhanced the World Bank is not clear. At best the World Bank seems to have exposed its weakness. Poverty is still rampant and sustainable development remains a theory far from being achieved on the ground. To add to its misery the World Bank is embroiled in an outrageous corruption scandal in terms of good governance. Where is the decentralisation championed by the World Bank when there may be many out there who know that the bank is controlled by one of the most powerful countries on earth. The World Bank has a huge task to gain credibility and relevance in the 21st century. Nations are no longer as dependent as in the colonial era.

On the bank loans there are many countries in Sub-Saharan Africa that are groaning under the heavy burden of debt payment. In giving out loans and grants the World Bank makes sure it is its advice that the recipient country takes in how to run its economy. The bank sends economic advisors with salaries ten or more times a salary of a capable staff in the recipient country or else the country may not receive more loans or grants if the advisors recommendations were not followed. The huge salaries paid to the World Bank staff of course come out of the loan to the recipient country. The World Bank approach of dictating conditions is contrary to the principles of sustainable development which are people-centred, responsive and participatory. This means that sustainable poverty elimination will be achieved only if external support focuses on what matters to people, understands the differences between groups of people and works with them in a way that is congruent with their current development strategies, social environment and ability to adapt. It also means that poor people themselves must be key actors in identifying and addressing development priorities and outsiders need processes that enable them to listen and respond to the poor. In its arrogance the World Bank seems to be nowhere closer to sustainable development principles in relation to the poor. It pays fat salaries to its staff for nothing while the poor remain poorer as the original focus was claimed to be the eradication of poverty.

In all fairness the World Bank may have some good intentions to address poverty but the only problem is the approach adopted. Unfortunately the bank’s approach leaves much to be desired. For example, the global demand for debt cancellation took a step forward when the World Bank announced the enhanced heavily indebted poor countries initiative but the conditions attached to the debt relief typical of the World Bank left much to be desired. Senegal, for example, was forced to liberalise its groundnut sector as a condition of debt relief and as a result of the supposed reform groundnut faming communities were thrown into chaos and less than 30 percent of the crop was collected. The World Bank imposed conditions on Senegal brought state of near-famine in rural areas. It seems whatever the World Bank does its actions are always controversial. It is difficult to see how the World Bank contribution to the economies of Sub-Saharan Africa will enable the achievement of the UN MDGs.

Debts keep people poor and in the worst cases push millions more into chronic poverty as debts inhibit growth and wealth distribution by reducing the amount of money available to governments to invest in social services and welfare given the stringent and insensitive conditions imposed by the World Bank. Debt is one of the key obstacles preventing poor countries from developing and achieving their full potential. The world’s poorest countries may continue to pay more every year in debt payments than they receive in grants and loans. It is therefore very difficult to see how on earth the bold targets set by the UN aimed at halving poverty by 2015 can realistically be achieved when the poor countries in Sub-Saharan Africa are overburden by crippling debts. The World Bank had warned Southern Sudan against borrowing from China yet Southern Sudan is now seeking to borrow from the World Bank which may be happy to lend the loan. I hope Southern Sudan is aware of the trap into which it is setting itself.

With the World Bank dismal failure in eradicating poverty in Sub-Saharan Africa in general does it have a magic wand for Southern Sudan in particular? Let’s have a look. After 22 years of a devastating civil war, a comprehensive peace agreement (CPA) was signed between the government of Sudan and the Sudan People’s Liberation Movement (SPLM) on 9 January 2005. The CPA ushered in an opportunity to turn the devastation of war and underdevelopment into a new era of peace and prosperity for all. It addresses the key causes of the conflict, and lays out the vision and commitment to accelerate socio-economic development in Southern Sudan.

In the Joint Assessment Mission (JAM) framework for Sudanese peace, development and poverty eradication it was specified clearly that by 2007 a basic transport infrastructure networks mainly involving roads, river transport and aviation should have been in place in Southern Sudan including links to Uganda and Kenya. In prioritising agriculture the strategies proposed under the JAM are designed to increase productivity and environmental sustainability to address chronic food insecurity. Southern Sudan has been deprived for too long of technological advances in crop, livestock, fisheries and forest production. The farmers still used old aged farming methods and work in a low–level productivity trap with low yields and chronic poverty, the one the World Bank should contribute effectively to eradicate.

To maintain peace and stability and to accelerate development in the war devastated Southern Sudan resources were needed. It was acknowledged that support from the international community was required. In the CPA one of the guiding principles in respect of an equitable sharing of common wealth states that, “In agreeing to these wealth sharing arrangements the Parties signal to the international community that it will have a strong and constructive role in providing post-conflict construction/reconstruction assistance to Sudan, especially to Southern Sudan and other war affected and least developed areas”. Clearly the scene was set for the active involvement of the international community in the all out effort for the reconstruction of Southern Sudan. According to the CPA there were to be two multi-donor trust funds (MDTFs) one for the government of Sudan and the other for the government of Southern Sudan (GOSS) to support urgent recurrent and investment budget costs.

The MDTFs were supposed to commence immediately to support priority areas of capacity building and institutional strengthening, and quick start/impact programmes identified by the GOSS. The CPA gave the MDTFs the right to solicit, raise and collect funds from foreign donors. According to the CPA for Southern Sudan the flow of foreign funds would be disbursed through a special account at the bank of Southern Sudan (BOSS) designated for the GOSS. However, the World Bank was requested by the donors and presumably by the Sudanese to administer the MDTFs particularly on account of the considered strong financial management associated with the bank policies and operational procedures. However, although the ownership of the MDTF for Southern Sudan was with the GOSS the World Bank seemed to have taken the ownership of the MDTF.

According to the JAM by 2007 a basic transport infrastructure network should have been in place in Southern Sudan. Also by 2007 there should have been adequate capacity in place for planning and management of infrastructure. However, we are already in mid 2007 and it is not clear whether basic infrastructure network and adequate capacity for planning and management of infrastructure is even half way in place in Southern Sudan. Also according to the CPA the MDTF should have immediately supported quick/start programmes in Southern Sudan. It is now about two years since the MDTF was set up in about mid 2005 and people may need some convincing on the implementation of the quick/start programmes.

It was the President of the GOSS who expressed the people’s frustrations of the slow progress in the release of the cash from the MDTF for the provision of basic services. The World Bank as always considers others corrupt except themselves and so wouldn’t release the needed cash unless their advice was followed to please them. The World Bank representative for Sudan and Ethiopia apparently in response to the President’s complaint and public frustrations claimed that processing cash through the MDTF structures was bureaucratic but less open to corruption. The implication is that the World Bank was less corrupt than a government. I think the World Bank representative by now must be eating his own words after the corrupt and scandalous case against his boss the president of the World Bank.

With all the experience with the World Bank dealing with the bank in its present form may be a recipe for disaster. At any rate the World Bank has outlived its usefulness. It was set up immediately after the Second World War to address development problems of Europe. In the Cold War era the World Bank was put into good use by its founding fathers in the East-West ideological wrangling. However, conditions are now different. With the Cold War as history and in the 21st century where most of the countries are independent nations the neo-colonialism promoted by the World Bank in treating the poor as utterly ignorant and helpless is unacceptable.

With-holding the cash form the MDTF for development in Southern Sudan because of suspicion of corruption may in itself be another form of corruption or sabotage. People know how far the World Bank could be very corrupt. The disgraced outgoing president of the World Bank while preaching against corruption in poor countries was instituting corruption in the world body. Paying an Iranian girlfriend against the budget of the bank who was working in a government department and hiking up salary increases while advising others to the contrary was corruption of outrageous proportion. There was no wonder people were left furious that there was no way the president could survive the people fury and eventually the president had to succumb to the will of the people despite the initial stubbornness.

The President of the GOSS has taken a bold step to address corruption. Few leaders have come out openly to fight the evil and the destructive nature of corruption as the President of the GOSS has done. It is this open declaration of war against corruption that should have made the World Bank at least to appreciate the stand of the GOSS to release the badly needed cash from the MDTF for basic services according to the GOSS priorities in development. The SPLM Secretary General has also affirmed in no uncertain terms the SPLM resolve to build a transparent government which responds to the aspirations of the people. If the GOSS could handle millions of dollars from the oil revenue why should it be any different to handle the cash form the MDTF. Presumably the issue of corruption may crop up. However, a stand has already been taken against corruption. The World Bank may test the GOSS first by releasing the money and then monitor how the GOSS spends the money for evidence of corruption. The World Bank must understand that it is not itself a saint given the unceremonious departure of its president.

Southern Sudan has pledged itself to achieve the MDGs by 2015. For the sake of those who may not be familiar with the MDGs, the MDGs (Millennium Development Goals) are a set of eight goals declared by the UN each with multiple time-bound targets and specific indicators and the MDGs seek to halve poverty, hunger, disease, illiteracy, discrimination against women and environmental degradation by 2015. In a nutshell the eight MDGs are as follows:

Eradicating extreme poverty and hunger
Achieving universal primary education
Promoting gender equality and empowering women
Reducing child mortality
Improving maternal health
Combating HIV/AIDS, malaria and other diseases
Ensuring environmental sustainability
Developing a global partnership for development

The World Bank also seems to be committed to the achievement of the MDGs. However, it is not clear how Southern Sudan will achieve the MDGs when the World Bank starves it of its legitimate cash from the MDTF that is supposed to be owned by Southern Sudan.

Eradicating extreme poverty and hunger is one top priority of the World Bank. One hopes it is also a top priority of the GOSS. With agriculture as the cornerstone of development poverty may be addressed to achieve food security. We may know that poverty is the widespread cause of food insecurity. Naturally one wouldn’t think of food security without a mental picture of agriculture. Agricultural production may therefore be associated with food security. However, agricultural production alone does not guarantee food security. We may have plenty of food in the market but people may still be starving. Income is therefore essential for people to have access to the available supply of food in the market. For the sake of others food security exists when all people, at all times have physical and economic access to sufficient, safe and nutritious food to meet their dietary needs and food preferences for an active and healthy life.

As agriculture is supposed to be the backbone of the economy of Southern Sudan I found it very strange that the President of the GOSS in his speech before the South Sudan Legislative Assembly in Juba never ever mentioned agriculture at all. Agriculture may include livestock, fisheries, forestry and environmental conservation. How on earth are we going to attract investors when such an important occasion as addressing the South Sudan Legislative Assembly is devoid of the mention of agriculture, tourism, abundant natural resources and so forth kin Southern Sudan. Such an occasion should also be used to sell Southern Sudan worldwide as a potential investment region. The Internet has made possible for people in the remotest corners of the world to be aware of other parts of the world. Also the media may likely print the President’s speech. I hope the speech writers of the President are aware of the powerful nature of the media in advertising to potential investors the good things about Southern Sudan.

As it stands the World Bank is a failed institution that should either be overhauled or damped. It has caused too much headache to the world’s poor that barely any sympathy exists for its existence. The World Bank did not practise what it preached and lectured to the poor. It could have been a deception of grand scale. However, in principle the World Bank might have had noble intentions but some corrupt officials might have been the individual culprits who probably had reason to behave the way they did only to tarnish the name of the World Bank. The intention to eradicate poverty and hunger was noble but the practice to achieve the end result was very questionable. Nonetheless I would give credit to the World Bank in supporting the Bujagali dam in Uganda, the Southern Sudan neighbour to the south with loans and guarantees. Sub-Saharan Africa needs energy to industrialise. No country on earth will industrialise without energy. I hope the GOSS has plans for Fula or Bedden falls on the Nile in Equatoria to electrify the whole South for domestic and industrial use and also to export electricity to the neighbouring countries to earn the badly needed revenue for development assuming corruption would have been near zero levels. We hear of the self-proclaimed big brother to the far north pre-empting by offering diesel generators to the South for energy. This is nothing but to deny the South not to have its fair share of the use of the Nile.

Taking a fresh look at the World Bank it is possible to conclude that the World Bank in its present form will be viewed as unsuitable to eradicate poverty among the poor of the world. With the World Bank’s president scandalous corrupt practice which could be the tip of iceberg of corruption in the bank, it will be extraordinary to accept the World Bank as it is. The poor may be very unhappy with the World Bank for the misery it has caused. The World Bank president arrogant behaviour was the last straw to break people’s confidence in the World Bank as the saviour of the world’s poor.

In conclusion the World Bank by now should have known that it had deceived the poor for far too long that it is time to reform and be a pioneer of poverty eradication in the 21st century or be consigned to history like all fallen empires. God has created us as equals in his image and all should treat each other with decency as the children of the same God. However, religious bigots drugged by bigotry may disagree.

* The author is an agricultural extension expert and a researcher on household food security with reference to peasant farming. He can be reached at jklupai@yahoo.co.uk .