Most Powerful Groups in the World - The World Bank Part 2
About the history of the organization known as the World Bank or International Bank for Reconstruction and Development.
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The bank's lending skyrocketed under the leadership of former U.S. Defense Secretary Robert McNamara, who became World Bank president in 1968. Long-term loans to developing countries increased by 400% and money was doled out to nearly 100 countries during McNamara's first five-year term. By 1980 the bank was overseeing more than 1,600 projects in the third world at a cost of over $100 billion, and its capital had grown from $45 billion to $80 billion, causing some U.S. officials to wonder whether the bank would someday have the potential to destabilize U.S. money markets.
World Bank is a "Western rich man's club" wielding enormous political power over indebted countries' economies. The U.S. apparently used its influence in the bank to cut off World Bank aid to Chile during Salvador Allende's three-year socialist regime. The bank has supported questionable projects such as Indira Gandhi's compulsory sterilization program in India. The bank is also probably guilty of financing the shift of millions of peasants in Vietnam, which triggered the flood of refugees known as the Boat People. Third-world members have little say in World Bank policy, even though most of the bank's programs are directed at them. Congressman C. W. Bill Young (R-Fla.) has remarked that "through the international banks . . . we created a high-living group of international money changers accountable to no one."
Exploits: World Bank contends that it has helped improve the quality of life for millions of people in the world's less developed countries. Since the early 1970s the bank has financed over 40 urban projects aimed at improving living conditions for several million people. The bank lent $36 million to the Philippines in 1976 to upgrade slum sites and services in Manila. However, World Bank also played a large part in the establishment of martial law in the Philippines by its strong support of the Marcos regime, thereby protecting its investment as well as that of many major U.S. corporations. Such inconsistencies run through a number of the bank's loan practices in relation to its overall stated goals. Five of the top eight recipients of World Bank loans have been rightwing dictatorships with poor human rights records. A striking, though small, example was a $2.5 million loan the bank made to the Central African Empire (now Republic), one of the world's worst human rights violators, where Amnesty International has protested the merciless beatings and killings of thousands of children.
World Bank's development projects have both directly and indirectly benefited the economic interests of the U.S. and other industrialized Western nations. As one World Bank observer noted, by financing enterprises in third-world countries, the industrialized world is assured of having access to needed raw materials and supplies provided by developing regions. Many of the borrowing countries are also important markets for U.S. goods and services. Thus World Bank money eventually comes full circle, being paid back to the industrial nations. That the U.S. plays a dominant role in deciding what money goes where is documented by the large share of World Bank funds that are channeled into countries in which the U.S. has strategic and diplomatic interests, such as India and certain African and South American countries.
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