Wolfensohn's Remedy

HE came, he saw and he spoke his mind. If Delhi thought the ninth president of the World Bank, James D. Wolfensohn, would leave a trail of largesse in the wake of his maiden, though long-delayed, visit to the Bank's largest borrower country (and one of its most solvent), it was wrong. The overwhelming message that came out of his whirlwind seven-day tour was: shape up the aided projects or shove them.

To be sure, Wolfensohn promised aid: for core projects and the proposed Infrastructure Development Finance Corporation, agriculture programmes and retention of IDA quota (India is the biggest recipient), and against trade-related pressures from the developed world. But he made no effort to hide the fine print: phase out agricultural subsidy ("we are fighting the US and the European Commission too on this"), cut deficits, open up insurance, start pension funds, encourage debt market, abolish child labour, cut red tape, and, above all, wipe out corruption. "Corruption is today the single-most economic obstruction to development. It just makes dysfunctional the whole system," waxed the 63-year-old president, who is known to be the least interfering with aid applications from the poor.

Call it conditionality if you will. Or toeing the US line. But "we at the Bank and the Fund (IMF) share the same views on corruption. We have not come here with Washington-based solutions. I don't report to the US Treasury," he assured. Veiled also in the soft phrases was the steely decision to review all the current Bank-assisted projects: "We have a very good opportunity now to strengthen the way we monitor our programmes and effect the most vigorous control of their management." But why so much unutilised aid? "It's not a terribly difficult situation, only below average. I don't know the answer. It could be the bureaucracy here, in us, or the problem of counterpart funding." 

Clearly, the Government, whose infrastructure needs alone in the next five years are around $200 billion, had to stomach a few jolts—in the shape of reform-linked loans. Said Wolfensohn: "There's a coincidence between what the Government is suggesting and what we're suggesting. The objective's not to run down India. It's to put things in perspective. If any condition's to be imposed, it has to come from the Government."

 At the end of the tour, only the environment NGOs gave the President a taste of his own medicine, by forcing him to change his schedule and give them a hearing. And it rankled. Said he: "The best thing for NGOs, they say, will be for us to pack our bags and leave. They're probably right. But that's not our view. And that's not the Government's view. When it wants, we will." As usual, the World Bank president was taking "a long-term view".

Turning emotional at the progress of Bank projects on AIDS, population and women in Mumbai and Chennai, Wolfensohn summed up his visit: "In some segments of society, we've had success. In some other segments we'll never have success." Development, after all, "is a very difficult business."