The Multinational Monitor


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The World Bank's Assault on the Environment

by Vandana Shiva

The World Bank's latest assault on the environment comes in strange trappings. Although wrapped in green rhetoric, the World Bank's new "environmental" projects bear striking resemblance to the ecologically devastating projects it has funded as part of the so-called "green revolution," which promoted the widespread use of chemical-intensive agriculture in the Third World. Tropical forests and the Third World countries that house them are the targets of the Bank's new brand of environmentalism.

The Tropical Forest Action Plan (TFAP) is an $8 billion program designed and implemented by the World Bank, World Resources Institute, the United Nations Food and Agricultural Organization and the United Nations Development Program. The program was designed to protect the tropical forests and the tremendous biodiversity contained within them. Yet the TFAP projects, in conception and operation, are advancing deforestation and the destruction of genetic diversity.

TFAP is replete with contradictory impulses. As a review done by Marcus Colchester and Larry Lohmann for the World Rainforest Movement (WRM) shows, most projects under this plan are accelerating deforestation through commercial logging and industrial forestry. The TFAP, for example, proposes a 400-600 percent increase in logging in the Peruvian Amazon and a 250 percent increase in industrial forestry in Nepalese Himalaya.

Single-species, single-commodity production plantations have been the basis of the Bank's green revolution in forestry. But monoculture plantations wreak havoc with the local environment and people. They displace diverse tree species which fulfil local needs for fodder, food, fertilizer, fuel and other commodities. The planting of eucalyptus, a pulpwood species, is a shining example of the faulty rationale behind the Bank's lending. It has been the Bank's favorite monoculture and has been planted, with World Bank encouragement, in countries throughout Southeast Asia. "Greening" with eucalyptus leads to desertification because the trees require large amounts of water while the trees return few nutrients to the soil (see Multinational Monitor, June 1987).

Ironically, the Bank views the continued spread of monocultures and genetic uniformity as a means for "biodiversity conservation." John Spears of the World Bank, for example, has recommended intensification of monoculture practices in agriculture and forestry for preserving biological diversity in Asia. This conflicting approach destroys diversity in production processes and attempts to preserve it in small "set-aside" plots which are to remain undisturbed. Biodiversity cannot be ensured, however, unless production itself is based on a policy of preserving diversity.

The fundamental problem with the World Bank's approach is that its "only way of valuing the forest is for it to benefit the big companies," Lohmann told Multinational Monitor. According to Lohmann, "The Bank says that in order for the forests to be saved they're going to have to pay their way." In other words, interest in preserving the forests will only occur if they yield immediate financial rewards for forestry and other interested companies and for indebted Third World governments.

Lohmann argues that the forests "are already paying their way" environmentally and financially for indigenous people who earn their livelihoods from them. He says that indigenous concerns should play a decisive role in any effort to conserve the forests.

The World Bank, however, "exists within a mindset beyond which it can't see," according to Suzanne Head, a program manager for the Rainforest Action Network. She says the Bank is "trying to cure the illness with the same poison that caused it."

Critics argue that the Bank has not addressed the problems of landlessness and land use which underlie deforestation and that the programs it funds benefit local elites, not the environment or those dependent on it. According to Korinna Horta, an economic analyst at the Environmental Defense Fund who has analyzed Cameroon's participation in TFAP, the Bank's priorities are such that it "can't afford to lend just for the environment. It must lend for things that get a rapid and easy [financial] return," such as timber.

The Bank's model of forest exploitation is integrally related to the way the program was designed and implemented. The WRM review concludes that TFAP's failure to address the root causes of deforestation is primarily a result of its emphasis on top-down planning. Colchester and Lohmann contend that grassroots non-governmental organizations (NGOs) and indigenous peoples have very little input into TFAP planning and implementation, and that severe restrictions have been placed on access to relevant documents.

Ecologically sound management of the forest will require a "devolution of power to the people who have the greatest interest in the forest," such as indigenous forest dwellers and those groups that exist on the periphery of the forests, Lohmann says. He and other critics of TFAP want to see "the end of imposed, top-down so-called solutions" to which, he believes, the Bank is totally committed.

TFAP's destructiveness could be curtailed if NGOs were more actively involved and provided with early and consistent access to documents, says Horta. Specific arrangements between the countries and the World Bank, however, are "all state secrets," she says.

Even proponents of TFAP concede that the system needs to be opened. "My conviction is that the process should be as open as possible both in planning and implementation," says Ralph Roberts, director of forestry and conservation for the Canadian International Development Agency and chairperson of the TFAP forestry advisors group. Roberts even suggests that the advisory group could disseminate TFAP planning documents to NGOs if recipient countries cannot afford to do so.

Proponents disagree, however, with TFAP's critics on the origins of the plan's problems and on the means of correcting them. For instance, Roberts argues that "commercializing the forests is a legitimate pursuit if done in a reasonable manner." He says that it is a "ridiculous proposition" to stop all logging. "You're not going to preserve two billion hectares of tropical forest," he says. Roberts acknowledges the need for reform of the Bank's role, but does not believe TFAP should be abandoned completely.

World Bank staff say they are aware of TFAP's shortcomings and fully support the idea of a review process. Raymond Rowe, senior forestry advisor at the Bank, emphasizes, however, the economic imperatives of forest resource issues. "There's a continual trade-off between the conservation and production aspects of forestry," he says. Since "developing countries have few resources [other than] big forests, they will tap those resources."

The consensus of the critics is that TFAP is fatally flawed and should be financially suspended until a wholesale restructuring, incorporating a grassroots perspective, is undertaken.

The World Bank and the green revolution

TFAP is not the first time that the Bank has played a key role in obscuring the reality of, and thereby legitimizing, an assault on biodiversity. The so-called "green revolution" in agriculture, which the World Bank was instrumental in spreading to the Third World through credits and advice, was an early example of such a program.

The World Bank's involvement in the green revolution began in 1964 when it sent a mission headed by Bernard Bell to India. The Bell mission called for a devaluation of Indian currency, liberalization of trade controls and greater emphasis on chemical-intensive and capital-intensive agriculture.

The Bank provided the credit that was needed to replace the low- cost, low-input agriculture in existence with an agricultural system that was both capital- and chemical-intensive. In a 1983 publication, the World Bank recalled the role that the International Development Agency (IDA), the Bank's soft-loan arm, played: "A number of foreign experts working in India for the Rockefeller and Ford Foundations began pressing the Indian government to import high yielding wheat varieties .... The Indian government decided that the potential of the new technology far outweighed the risks.... IDA was closely involved with this decision."

The foreign exchange component of the green revolution strategy for the five-year plant period (1966-1971) was projected to be about $2.8 billion. This was more than six times the total amount allocated to agriculture during the preceding third plan. Most of the foreign exchange was to be spent on imports of fertilizer, seeds, pesticides and farm machinery. World Bank credit subsidized these imports. As a corollary to making the credit available, the World Bank, along with the U.S. Agency for International Development, exerted pressure to obtain favorable conditions for foreign investment in India's fertilizer industry, import liberalization and the elimination of most domestic controls. The Bank financed the destruction of genetic diversity in Indian agriculture most directly by advocating the replacement of diverse varieties of food crops with monocultures of imported varieties of seeds.

The preservation of biodiversity is vital for local populations and ecosystems, as Jeffrey McNeely, Kenton Miller, Walter Reid, Russell Mittermeier and Timothy Werner describe in the journal Environment. Ecosystems suffering from a loss of biodiversity "are losing their capacity to support the human populations dependent upon them. [T]his degradation is exacting further costs through soil erosion, siltation of reservoirs, local climate changes, desertification and loss of productivity." The introduction of monocultures exacerbates social inequities by favoring wealthier farmers, they write. "[T]he substitution of high-response cultivars for local varieties ... often handicap small farmers who cannot afford the necessary expensive inputs like fertilizer and pesticides."

In 1969, the Terai Seed Corporation was started with a $13 million World Bank loan. This was followed by two National Seeds Project (NSP) loans. This program led to the homogenization and corporatization of India's agricultural system. The Bank provided NSP $41 million between 1974 and 1978. The projects were intended to develop state institutions and to create a new infrastructure for increasing the production of green revolution seed varieties.

In 1988, the World Bank gave India's seed sector a fourth loan to make it more "market responsive." The $150 million loan aimed to privatize the seed industry and open India to multinational seed corporations. Jack Doyle, director of the Agriculture & Biotechnology Project for Friends of the Earth, notes, "The first recognition that there was money to be made in the green revolution came from the value placed on the seed itself." After the loan, India announced a New Seed Policy which allowed multinational corporations to penetrate fully a market that previously was not as directly accessible. Sandoz, Continental, Cargill, Pioneer, Hoechst and Ciba Geigy now are among the multinational corporations that have major interests in India's seed sector.

By making credit available for the purchase of seeds and controlling the information and research system, the World Bank made the green revolution appear to be the only available alternative for countries attempting to meet their food needs.

The Consultative Group on International Agricultural Research (CGIAR), an umbrella organization, was launched in 1970 on the initiative of the Bank and has its offices in the World Bank. The expansion of the international institutes coincided with the erosion of the knowledge systems of Third World peasants and Third World research institutes. The International Rice Research Institute (IRRI), for example, was set up in 1960 by the Ford and Rockefeller foundations, nine years after India had established its own highly regarded institute, the Central Rice Research Institute (CRRI) in Cuttack. The Cuttack Institute was working on rice research-based on indigenous knowledge and genetic resources, a strategy clearly in conflict with the goals of the U.S.-controlled IRRI. The director of the CRRI was removed, under international pressure, when he resisted handing over his collection of rice germplasm to IRRI. He had also asked for restraint on the hurried introduction of the High Yielding Varieties (HYV) of rice from IRRI.

The Madhya Pradesh government gave a small stipend to the ex-director of CRRI so that he could continue his work at the Madhya Pradesh Rice Research Institute (MPRRI) at Raipur. On this shoestring budget, he con-served 20,000 indigenous rice varieties from India's rice bowl in Chattisgarh. Later, the MPRRI, which was doing pioneering work in developing a high yielding strategy based on the knowledge of the Chattisgarh tribals, was also closed under pressure from the World Bank.

In agriculture, centralized research and genetic uniformity go hand in hand. The Mexican Centre for Wheat and Maize Improvement (CIMMYT), for example, be-came an instrument for the destruction of maize, and in Asia the IRRI was largely responsible for the destruction of genetic diversity of the region's rice crop. In the Philip-pines, IRRI seeds were called "seeds of imperialism." Robert Onate, president of the Philippines Agricultural Economics and Development Association observed that IRRI practices created a new dependence on agrochemicals, seeds and debt. "New seeds from the CGIAR global crop seed systems," he says, "will depend on the fertilizers, agrochemicals, and machineries produced by conglomerates of the transnational corporations."

Technology was transferred via CGIAR from local cultivators and plant breeders to national research centers. Thousands of locally cultivated plants produced by agricultural systems built up over generations from centuries-old knowledge were replaced with the seed uniformity of the international research centers controlled by the United States. Thus, the institutions and programs that the World Bank claims to have launched for conservation have contributed instead to genetic erosion.

The green revolution monocultures have caused severe ecological, economic, social and political dislocation of Third World societies. Large tracts of land havebecome waterlogged and others have been turned into salinated deserts in order to meet the water-intensive demands of new crop varieties. Useful and nutritious crops have been displaced, creating severe deficiencies in nutrition. Diseases and pests which did not exist prior to the green revolution have been created. The commercialization of seeds, with its homogenization of crop varieties, was not based on sound ecological principles, but rather on the imperatives of the market.

History repeats

The World Bank seems determined to repeat the failures of the green revolution with TFAP. As in the green revolution, forestry projects financed by the World Bank have replaced local diversity with imported uniformity and self-sufficiency with credits, loans and debt. "Social forestry," "community forestry," "wasteland development," no matter what rhetoric the World Bank uses to describe its projects, in the end the financing increases industrial forestry plantations at the expense of the needs of local populations and the forests.

Indigeonous Peoples Speak to the Banks

When the leaders of the international indigenous organization COICA visited the United States in October 1989, they presented the World Bank, the Inter-American Development Bank and the European Economic Community with a detailed set of demands. An edited version of their agenda for the bilateral and multilateral fenders of Amazon development follows below.

Founded in 1984, the Coordinating Body of the Indigenous Peoples' Organizations of the Amazon Basin (COICA) represents the indigenous organizations of Bolivia, Brazil, Ecuador, Columbia and Peru.

What the COICA wants

The international funders of Amazonian development should formulate new criteria for supporting Amazonian development projects. The defense of the Amazon Biosphere/Indigenous territories must go hand-in-hand with respect for the territorial, political, cultural, economic and human rights of Indigenous Peoples.

It is the region's Indigenous Peoples who have lived within that Biosphere and managed its resources in a sustainable way. The new breed of projects should be compatible with the Indigenous People's principles of respect and care for the world around them, as well as with their concern for the survival and well-being of their future generations. The right of self-determination for indigenous peoples within their environment/territory is fundamental to guarantee the well-being of the indigenous population and the Amazonian biosphere.

Interaction between Indigenous Peoples and international furriers should include:

  • consultations on all aspects of projects implemented in areas with an indigenous population or which have an impact on an indigenous population;
  • partidpation of representatives of Indigenous Peoples in the planning, implementation and evaluation of projects;
  • exchange of information of mutual interest on plans, projects, activities and needs of both.

There can be no development projects in indigenous areas without the informed consent of the Indigenous Peoples affected. Projects must also be designed in such a way that they respect the territories as defined by the population, their economy and their social organization. There should be special components of the project which lend support directly to the indigenous population for their own needs and for the development proposals which they may have. The organization which represents the affected population should participate in the design of the project.

How the COICA proposes implementing this agenda

Each funding agency should establish written accords with COICA at the international level and with each member organization of COICA at the national level. These accords should establish the conditions and objectives for collaborative interaction based on mutual respect.

Representatives from the headquarters of the funder should meet with representatives of COICA at least once a year in order to monitor the implementation of the accords and of the institution's policy on Indigenous Peoples.

In the event that projects be proposed for an area in which there are indications of the existence of an indigenous population, or if there is a reason to suspect that the project may have an impact on an indigenous population, COICA recommends establishing the following procedures:

  • Through personnel which it hires, the funder should verify the existence of an indigenous population in the project area and the possible impact of the proposed project on that population; during this verification process, the researcher should consult directly with COICA and with the member organization within the country in question.
  • If it is determined that the proposed project will affect an indigenous population, a Tripartite Commission should be formed with a representative of the funder, the government and COICA through its local representative (including a representative of the local organization which directly represents the affected population if such an organization exists).
  • This Tripartite Commission should have the following functions:
    • inform the affected population of the development plans and determine if that population consents to the plans;
    • determine if the proposed project represents a threat to the indigenous population and make recommendations about how to proceed;
    • determine what the priorities of the affected population are and make recommendations about how best to meet those priorities;
    • participate in overall design of the project and monitor the implementation of the project;

Concrete proposals for international cooperation

For many decades now, most Indigenous Peoples have been experimenting with ways to participate in the encroaching market economies of their respective countries while trying to survive as peoples intimately linked to the Amazonian forest. They have done this despite the hostility shown them by the frontier society and despite the fact that, within the context of the market economy, they are desperately poor. For these reasons, they have developed and managed a variety of small programs to improve their health, education and economy. The pro-grams which they are currently undertaking or wish to undertake range widely, from projects for improving the productivity of rubber, Brazil nut and other extractive activities to projects for recovering lands and resources devastated by conquest and colonization. It is these small-scale, locally-controlled initiatives which should be the cornerstone of future Amazonian development.

Dr. Vandana Shiva, originally a physicist and philosopher of science, is now an activist/researcher on ecological issues. She is part of the Third World Network. Her books include Staying Alive: Women, Ecology and Development in India and the forthcoming The Violence of the Green Revolution.

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