Fascinating article today: Maharashtra spurns World Bank, looks for love in Tokyo

The jist of it is that Maharashtra State has decided not to borrow from the World Bank for a project that will displace 1000s of people, claiming that the World Bank's policy on resettlement gives too much "voice" to the people to be resettled and too much power to the World Bank inspection/oversight person(s), which could delay the project, as is now happening with the Mumbai Urban Transport Project.

Instead of borrowing from World Bank, Maharashtra State will seek to borrow from JBIC whose resettlement policies presumably will not "impede" a rapid, top-down and massive forced-resettlement.

So, the Bank faces pressure from both sides: The human rights/social equity segment of the NGO community has long-argued that the Bank's resettlement policies are too weak. And yet, India is now taking the stance that the policies are so strong that they are "anti-development"!

This creates an interesting dillema for the Bank: Which set of pressures will have the greatest impact on their next round of policy revisions?

I suspect that the Bank will now be cautious about making the resettlement policy any more restrictive, and may even be forced to relax the policy, in order to compete for business with funding agencies that are springing up within the emerging markets themselves.

But a weakening of the policy would surely increase angst and activism within the Western NGO community, and the Bank has long been averse to reputational damage.

Posted by rjorr at May 18, 2006 10:32 AM