The World Bank in fiscal year 1996 extended approximately $28 billion in loans and credits to developing countries for a variety of public sector projects. The mandate of the Bank is to promote economic development and alleviate poverty. However, Bank financing of large infrastructure projects and promotion of structural adjustment programs has in many cases led to greater impoverishment and increasing inequity within. and between countries. The Bank has developed many operational policies and procedures designed to mitigate the social and environmental impacts of its lending, but has struggled to implement those policies on the ground. The Bank’s record on involuntary resettlementthe forced relocation of people to make way for project works or impacts-is particularly dismal. Internal reviews by the Bank have shown both an unacceptably poor level of performance and also a disturbing increase in the number of people displaced.”
Development-induced displacement poses a significant human and political paradox for Bank lending. Despite policies that are designed to mitigate the impacts, in practice involuntary resettlement often leads to a downward spiral of increased impoverishment and marginalization of local communities. This disconnect between policy and practice has devastating human implications, as poor communities are becoming increasingly impoverished. The fact that the Bank is lending scarce public funds for projects that undermine communities without rehabilitation is profoundly disturbing from an institutional and governance standpoint. The Bank operates with public funds and has an institutional mandate of poverty alleviation; it must therefore be held accountable to compliance with that mandate and for adherence to its own policies and procedures.
Although the World Bank avers that it does not and cannot consider the human rights implications of its lending decisions because to do so would interfere with the internal politics of its borrowers, it is arguably playing an integral role in
governments’ exercise of political power with direct implications for human rights. Affected peoples, time for the World Bank to recognize its role and assume responsibility for the social and environmental costs associated with its development projects.
This article examines the scope of the displacement problem, and analyzes World Bank policy and practice on involuntary resettlement. It also addresses the linkage between displacement and state political power, the connection to human rights and the World Bank’s disavowal of human rights concerns. Although the problems I describe exist throughout the Bank’s lending portfolio, the experience of South Asia is particularly illustrative. Cases from the region, and especially India, have played a significant role in galvanizing reform efforts and highlighting the failures of Bank policy. The article briefly introduces the Inspection Panel, a new mechanism that provides a forum and a potential, a)beit limited, remedy for those suffering from violations of Bank policies. The article concludes with recommendations for reform.