The World Bank, corruption, the media and India

One of the mysteries of our time, an era of galloping GDP growth and relentless hype about an Indian century, is the breathless welcome given to World Bank projects in a number of States. When there is so much buoyancy in tax revenues, and when Indians are only too willing to pay a little extra for national development (they are already paying a cess for infrastructure and education), what is the need for the WB to come in with its insignificant offerings and reams of advice on how to spend money that is mostly loaned (in other words, which is anyway to be repaid ?)

There can be one of two reasons or perhaps both. One is that it is easy to get a WB loan, ostensible conditions notwithstanding. Second, it is easy to spend that money without too many questions being asked in legislatures and parliament. These would be difficult to achieve with tax funds. The other distressing conclusion is that we are hopelessly corrupt as a people and will loot from all possible sources, and when the Bank itself is willing to look the other way (for some strange reason) we will take from there as well.

Without question, the Detailed Implementation Review conducted by the World Bank, provides a close look at the maggots that infest the rotting appendages of India’s Government-supervised projects. For a country that is forever on a high about its cultural and democratic credentials, it is a reminder that it has not even a fig leaf.

The World Bank has been providing staggering loans for many years, during the Hindu rate of growth, but there is little or no visible change. Now, the Bank tells us that it has suddenly woken up to rampant corruption in India’s handling of the funds in healthcare projects. Could it be that India’s politician-bureaucrat-contractor parivar has become more successful at fraud, alarming even the Bank? Or is something else going wrong?

According to the Bank, the five projects covered by the Detailed Implementation Review findings include the $114 million Malaria Control Project, the $82.1 million Orissa Health Systems Development Project, the ongoing $54 million Food and Drug Capacity Building Project, the $193.7 million Second National HIV/AIDS Control Project, and the $124.8 million Tuberculosis Control Project. The trigger for the review is the corruption exposed in the Reproductive and Child Health Project.

(It appears that the Bank’s audit found that there was something rotten even within, as an internal audit revealed. The operations in India by Bank officials flouted its own rules. The Wall Street Journal has called it a disgrace and posted the Detailed Implementation Review online for everyone to see.)

Two classic cases of doublespeak by the Bank are found right here in Tamil Nadu. We have a multi-million dollar Health Systems Project in progress in the State. There is also the Tamil Nadu Urban Development Project Phase III being implemented. Just what components of these projects are decided by our rulers and their friends at the WB, in consultation with the public?

The financial summary of such loans is given as follows in the HSP:

Terms and Conditions Between Govt. of Tamil Nadu & Govt. of India

As per Office Memorandum, Annex II of External Assistance Manual)

  • The external assistance received from World Bank is passed on by the Government of India to States as Additional Central Assistance (ACA) in 30 : 70 mix of grants and loans.

  • Maturity period of loan is 20 years

  • Rate of Interest is 12%

The HSP is effective for five years from January 2005. Three years have passed. One of the components of the high cost project is a Health Management Information System. We have seen none of that in the three major teaching tertiary hospitals in Chennai, Tamil Nadu’s capital, including the apex Government General Hospital which receives referral patients from all over the State. Would the bank like to extend its policy of transparency to the media and tell us what is going on here? Surprisingly, the Tamil Nadu Health Systems Project even has a dedicated website purportedly maintained by Tata Consultancy Services, but it is remarkably indifferent to detail and transparency. Clearly, Mr. Robert Zoellick is missing something here, if at all he is looking closely.

The Reproductive and Child Health Project has already been flagged as a corrupt enterprise by the WB. We have no idea of how the mess has been cleared up, and only terse details are available from the Bank’s press release.

If you look at the TN Urban Development Project III, for which the State Government says the bulk of the funding for the plans made so far will come from the Bank, there is even less transparency. I asked Ms. Abha Joshi Ghani, Lead Infrastructure  Specialist South Asia Energy and Infrastructure at the Bank, for her response on how the Bank goes about preparing its plans. Does it disclose its plans and seek public comment? Is the outcome report for past phases of TNUDP available on its website, so that the public can compare what it has promised and what has been delivered? I have so far got only vague replies and a promise to find the link to previous outcome reports.

On the policy front, the TNUDP is a retrograde step, pushing an anti-environmental agenda such as usurping common spaces and sidewalks to favour construction of roads, overpasses and freeways. I have not seen a single component to build pedestrian infrastructure, such as modern walkways, subways or crosswalks. One of the components is to construct modern bus termini. How many have you seen built by Ms. Jayalalithaa and her predecessor/successor?

Most of the basic project proposals are available for the media to peruse in the public domain. In addition, the Right to Information Act 2005, which has so impressed the Bank, is available for journalists to use. But who can help a media that vows to see no evil, hear no evil and report no evil?

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