The Indian Economy Overview

The World Bank and India

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The World Bank and NGOs

The World Bank is giving much attention to the Non-Governmental Organizations (NGOs) since 80s. Whether by accident or by design, this period coincides with the beginning of structural adjustment program (SAP) in many third world countries. As we know, the impact of SAPs has been disastrous on the poor communities. Massive cuts in social and welfare spending, wage freezing, spiraling prices and privatization of basic services are the wages of SAP. The experience of SAPs in many countries, especially in Africa, shows that NGOs can be easily co-opted and turned into "efficient" implementers of SAPs. With the withdrawal of the State from the social sector such as health, nutrition, education and water supply, and subsequent privatization of these sectors, the NGOs in many African countries have been invited by the World Bank to takeover these roles. Thus, the state hand over its infrastructure such as hospitals and schools to NGOs to run. In Somalia, many NGOs are offering competitive tenders for sub-contracted social service provision. But, it should be noted here that only those NGOs are encouraged who "implement" the adjustment programs in the social sector. In other words, clearing the mess created by adjustment policies. On the other hand, those NGOs involved in develop-ment of alternatives and critical of adjustment policies are kept out. In fact, the political space for such NGOs is further squeezed. Thus, the NGOs are required not only give a human face to the SAPs but also to WB-IMF.

In Sudan, the government and NGOs compete with each other for funds. The financial institutions only trust NGOs while government officials are reduced to mere spectators when these NGOs receive funds.

In the later 1980s and 1990s, the State in the Third World itself is under attack. It is under attack to withdraw from all sectors of social life except the policing and military functions. In Sudan, NGOs income is the only area of resource growth while financial support to government is decreasing. In Sudan, the government and NGOs compete with each other for funds. The financial institutions only trust NGOs for 'comparative advantage' while government officials are reduced to mere spectators when these NGOs receive funds from these institutions.

Bank's Love for NGOs

The World Bank has shown immense interest in involving NGOs in projects funded by it. A close look at the project identified by the Bank with potential NGO's participation will reveal that the NGOs are asked to deliver services related to nutrition, AIDS control, health and population.

Similarly, in India, the Bank is keen to involve NGOs in the implementation of certain parts of its project such as afforestation and rehabilitation of displaced persons for Bank financed Subarnarekha, Upper Krishna and Narmada projects. In other words, the Bank wants NGOs to clean up the mess of displaced persons and deforestation created by its projects. On the other hand, NGOs and peoples movements like Narmada Bachao Andolan and Icha-Kharkai Bandh Vishthapit Sangh actively working on the Narmada and Subernarekha projects respectively are considered as "trouble makers" by the Bank. Because these NGOs are raising fundamental issues related to viability and feasibility of not only these projects but also the Bank's lending.

The Bank has indentified a few Indian and involved them in the Bank's projects in India.

The following are some instances of Bank-NGO involvement—

Informalisation of Economy

Alongwith the state gradually abandoning responsibility for providing jobs, and the growing "informalisation" of the formal sector, came increased Bank funds for self-employment, income-generation activities—which are called micro-enterprises. However, evidence has shown up the unviability of most of them. They have been able to generate only marginal income for the disadvantaged groups—particularly women.

The typical diagnosis of the Bank for the failure of micro-enterprises is lack of managerial training. It is underlined that the failure is not due to lack of demand. Since access to the market has nothing to do with demand. Nor are they simply matters of managerial and business acumen and skills, though, they are no doubt important. In what is called the "Women's Enterprise Management Training and Out-reach Program" (WEMTOP) a so-called "participatory program" has been envisaged by the Bank to strengthen the capacity of intermediary NGOs to deliver management training to grassroots women entrepreneurs. The WEMTOP's client group is landless or assetless and working in the informal sectors.

NGO - Bank Committee

To promote NGO collaboration, the WB has taken up many efforts. It established the NGO-WB Committee in 1982 to strengthen interaction and discussion between the bank staff and NGOs representatives. At its fourth meeting (1984) in Washington, DC, NGO members felt the need to identify themselves outside the joint NGO-WB structure and therefore they formed the NGO Working Group on the World Bank (NGOWG). The need for the NGOWG was felt because the policy dialogue in the NGO-WB Committee was becoming increasingly contentious. The need to articulate NGO criticisms of the Bank's development model, its SAPs and their adverse impact on the poor led to a position paper on SAP. It presented a sharp critique of the entire developmental model touted by the Bank and expectedly brought forth an equally sharp response from the Bank.

Bank-NGOs Projects in India
  • Uttar Pradesh Sodic Lands Reclamation Project
  • National Leprosy Elimination
  • Karnataka Rural Water Supply and Environmental Sanitation
  • Basic Education Project
  • Renewal Resources
  • Development Project
  • Rural Water Supply and Environmental Sanitation
  • Child Development Services Project.

Although these disputes continued, the Bank carried on its attempts to incorporate NGOs into its overall program. The economic rationale for this has been spelt out in a number of Bank documents. The two major strengths on which this rationale is built are both based on its ability to mobilize voluntary labor and spirit. In the Bank's perception, NGOs can reach poor communities and remote areas where government machinery cannot and operate at low costs and low wages because they are ostensibly doing "missionary work".

Besides, the Bank has started the World Bank NGO unit located in the Operations Policy Department. The Economic Development Institute (EDI) is also working with NGOs to enhance their capacity and institutional building. The WEMTOP (Women Entrepreneurs Management Training and Outreach Program) in India operated through Udhyogini, an NGO based in Delhi, as part of the institutional building program of EDI.

The WB-NGO Consultative Committee [India] (India Committee) was formed in mid-1988. The initiative for the formation of the committee was taken by the Association of Voluntary Agencies for Rural Development (AVARD), in consultation with the Bank's Resident Mission in India. With a grant of $15,000 from the Bank, the committee started functioning.

The India committee, among other things, managed to persuade the World Bank staff for a debate on the effects of SAP which resulted in the launching of a Social Dimensions of Adjust-ment Project (SDAP). The fate of SDAP however, is not known.

The Bank has been identifying and working with NGOs in India, usually through the governments—central and state, and sometimes through other donor agencies. Typically, as can be seen in the Projects List in the accompanying box, a majority of these NGOs are asked to do implementation and service-delivery work for Bank-financed projects and operations. .

WB - NGO Collaboration
  • 73 projects of the total 245 projects approved by the Bank in 1993 have NGO collaboration.
  • Since 1973, NGOs have participated in 553 Bank financed projects.
  • 50% of NGO associated projects of the Bank are in Africa.
  • 42% of all projects approved in South Asia in 1993 had NGO involvement.
  • Population, Health and Nutrition sectors occupy the largest share of NGO associated projects.
  • Project implementation, monitoring and evaluation comprises 85% of NGO collaboration.

For further details contact:PIRG (Public Interest Research Group) 142, Maitri Apt, Plot No 28, Indraprastha Ext. Delhi 110092. India. Ph: 2432054 Fax: 2224233 email:

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