This is how the World Bank destroys economies



The moment you read an analysis like India to Become Fastest Growing Big Economy published in Wall Street Journal on Jan 14, 2015 ( you realise how the World Bank destroys economies.

The article is based on a World Bank analysis. It says: “The Washington-based development institution raised its forecast for India, saying growth in Asia’s third largest economy would accelerate in the coming years even as much of the world is slowing down. The reason? New Delhi is implementing changes that will make the country’s economy more efficient and vibrant.”

This is almost similar to how the World Bank had eulogised the economic policies of the previous NDA regime that led to the coining of the popular slogan: Shining India. The political debacle the ruling party had suffered as a consequence drove them out of power for the next 10 years. That’s a slogan the party does not want to be reminded of.

But then, World Bank has nothing to lose. At a time when the global economy is down in dumps, World Bank needs a saviour to justify its existence. Such is the desperation for increasing growth that countries like Britain and Italy have already started including prostitution and drug sales in its growth computations. That surely is some development that the world should be proud of !

Going the China path is being aggressively advocated for India while at a time China itself has changed its growth roadmap. Former Chinese President had acknowledged that 12 to 14 per cent GDP growth was unsustainable and China will try to operate at an average of 7 per cent or so. After all these years of phenomenal growth in manufacturing, China now faces a slump. Its manufacturing exports have come down by 2.3 per cent, and as a study shows its manufacturing is now becoming uncompetitive. The first Chinese manufacturing company has already moved offshore to Africa, and it is expected China will lose 85 million jobs to Africa in the next few years. With agriculture destroyed deliberately, and with farm lands turning unproductive because of massive pollution and also with more fertile land forcibly acquired, the bigger question the world faces is: Who will feed China in the years to come?

China is the world’s worst environmental disaster. World Bank would never talk about the dark side. The reason? The bigger the disaster, the higher is the GDP. That’s not the path that India needs to follow. India should be able to carve out a sustainable pathway for itself rather than following blindly the World Bank prescription. It surely has the acumen to work out an economic model that meets the aspirations of the person at the extreme end, and at the same time not push the country’s environment into a disaster mode. I am hopeful that Prime Minister Narendra Modi would see through the global design, and not bend backwards to adjust to the failed economic thinking. As Jospeh Stiglitz rightly says the world is witnessing economic madness.

Some years back, the then Chinese deputy Minister for Environment Pan Yue had in an interview to the German publication Der Spiegel (Mar 7, 2005) had said: ‘The Chinese miracle will end soon’. I share this interview again with the hope there would be some sensible people who would understand the disastrous implications of the World Bank prescription. It’s an interview that every policy maker must read:

The world has been dazzled in recent years by the economic strides being made by China. But it has come at a huge cost to the country’s environment. Pollution is a serious and costly problem. Pan Yue of the ministry of the environment says these problems will soon overwhelm the country and will create millions of “environmental refugees.

SPIEGEL: China is dazzling the world with its booming economy, which grew by 9.5 percent. Aren’t you pleased with this speed of growth?

Pan: Of course I am pleased with the success of China’s economy. But at the same time I am worried. We are using too many raw materials to sustain this growth. To produce goods worth $10,000, for example, we need seven times more resources than Japan, nearly six times more than the United States and, perhaps most embarrassing, nearly three times more than India. Things can’t, nor should they be allowed to go on like that.

SPIEGEL: Such a viewpoint is not exactly widespread in your country.

Pan: Many factors are coming together here: Our raw materials are scarce, we don’t have enough land, and our population is constantly growing. Currently, there are 1.3 billion people living in China, that’s twice as many as 50 years ago. In 2020, there will be 1.5 billion people in China. Cities are growing but desert areas are expanding at the same time; habitable and usable land has been halved over the past 50 years.

SPIEGEL: Still, each year China is strengthening its reputation as an economic Wonderland.

Pan: This miracle will end soon because the environment can no longer keep pace. Acid rain is falling on one third of the Chinese territory, half of the water in our seven largest rivers is completely useless, while one fourth of our citizens does not have access to clean drinking water. One third of the urban population is breathing polluted air, and less than 20 percent of the trash in cities is treated and processed in an environmentally sustainable manner. Finally, five of the ten most polluted cities worldwide are in China.

Read the full interview here: