To: JBL who wrote (12746 ) 6/24/1999 8:40:00 AM From: Les H Read Replies (1) | Respond to of 17770
World Bank approves loan for Chinafication of Tibet Amid infighting, World Bank to consider Tibet loan (adds expected approval of loan, details in paragraph 3) By Mark Egan WASHINGTON, June 21 (Reuters) - The World Bank is expected to approve on Tuesday a $160 million loan for China which has drawn more criticism, inside and outside the bank, than any project since President James Wolfensohn took office in 1995. The loan, which would be used in part to resettle 58,000 poor Chinese farmers to an area which Tibetans regard as part of their historic territory, has put the bank at the center of a political battle and a public relations nightmare. One board member told Reuters that the loan would likely be approved on Tuesday despite widespread dissension from senior board members. The source said the loan has caused heated debate because it raised ''serious concerns that the bank's own disclosure rules were not fully complied with.'' Last Friday, 11 of the World Bank's 24 executive directors sent a letter to Wolfensohn asking him to pull, or alter, the loan because it failed to meet bank standards, according to senior sources within the bank. The fiasco comes at a time when the World Bank is leading a push for developing countries to make their governments more transparent. But critics claim the bank has failed to live up to its own standards by hiding information from the public and that the plan will tip the ethnic balance and destroy the environment in the area. As well as dissents within the bank, the loan has enraged Tibetan groups, members of Congress, environmentalists and even pop stars. Making matters more tense is pressure from the Chinese government to push the loan through before it becomes ineligible for the World Bank's lowest cost loans on June 30. John Ackerly of the International Campaign for Tibet characterized the project as a ''disaster'' for Tibetans and said the bank has flagrantly violated its own policies in considering the project. ''The bank should not be involved in moving ethnic majorities onto land of ethnic minorities,'' Ackerly said. ''It's like telling Kosovar Albanians, 'We're going to move Serbs onto your land, but don't worry, we have the money to take care of them.''' The project, aimed at alleviating poverty, would see almost 58,000 poor farmers moved from an overpopulated area to a sparsely populated area 450 km further west in the Qinghai province of China which neighbors the Tibet Autonomous Region. Tibet was absorbed by China in 1950. The plans also call for building clinics and schools, building a dam and an irrigation project. In calling on Wolfensohn to pull the plug on the loan, the 11 executive directors claimed the loan had three main flaws, according to senior officials inside the bank. The executive directors, including the U.S., Canadian, German, French and Italian, wrote that the loan was incorrectly labeled as a ''Category B'' loan. That meant the loan did not require the intense six-month environmental study demanded of Category A loans. Category A loans are for resettlement, building dams and irrigation projects, among other things, while Category B loans are for projects with no irreversible environmental impact. They also complained that the loan failed to comply with the bank's indigenous people's policy and that details on the loan were released in June, six months late, leaving little time for debate. A World Bank spokesman confirmed the letter had been sent to Wolfensohn but declined to comment on its contents. Dana Clark of the Center for International Environmental Law said the reason the loan is being pushed through with such speed is that $100 million of the loan comes from the bank's donor-subsidized loan program. Thanks to an improving economy, China will no longer qualify for those loans after June 30. Chinese officials have publicly sought support for the project. On Saturday Vice-Minister of Finance Jin Liqun was quoted in the China Daily saying, ''We hope the board members will adhere to the bank's principle of supporting development ...and block efforts to politicize the (bank).'' Others claim China has threatened ambassadors in Beijing that opposition to the project would cast doubt on securing approvals for investments in China. The controversy has left phones ringing off the hook at the World Bank and sent tensions near flaring point between Wolfensohn and the board who both see the loan as a hot potato. ''The executive directors are terrified about the fallout from this project,'' one bank source said. Last week, 60 members of Congress from both sides of the House sent a letter asking Wolfensohn to pull the loan and Adam Yauch, leader of the Beastie Boys rap-band and a follower of the Dalai Lama, held a rally outside the bank's Washington headquarters.