Setting aside the issue of the efficacy of World Bank lending, shouldn't the priority of Bank lending go to countries that have fared nowhere near as well as China in recent years? Unfortunately, there are far too many countries which have been economically stagnant and whose performance pales in comparison to the emerging giant. Late last year, I featured a Wall Street Journal story on how World Bank lending in fiscal year 2007 was topped by India, followed by China in third place. From a social justice standpoint, aren't there other countries where poverty alleviation is a more pressing matter and should therefore get more lending priority?Current World Bank President Robert Zoellick offered a good reply to that question. Zoellick invoked the potential benefits of these countries participating more in global governance matters. That is, as a prominent international organization, the World Bank can use its clout to engage China with projects such as green ones whose benefits may accrue not only China but the entire world:
There are some 70% of the poor in middle-income countries. If we are going to deal with the poverty agenda, we need to be engaged with these countries.While visiting the China Daily website, I came across the following article that reiterates Zoellick's basic points. (BTW, lending to China by the World Bank is marginally down to $1.51B in FY 2008 as compared to $1.64B in 2007). Insofar as projects have environmental and social benefits, there is perceived value in the World Bank funding such projects in China:[Also] if you look at what's happening in the fields of diplomacy and political and security affairs, one of the big challenges is how we integrate the Indias, the Chinas and the Brazils [of the world] in the multilateral system? It strikes me as illogical that you would be trying to engage them in creating a new multilateral order, and not do it in the multilateral economic system.
The third point [is], let's think of the other big issues of the day, like climate change. Well, China and India and Brazil and others have huge energy needs, so if we are going to be able to contribute to the big economic environmental challenges of the day, we've got to be partners with these countries. I can put skin into the financial game to help make this happen.
The World Bank's lending to China reached $1.51 billion in the 2008 fiscal year dating from June 30, 2007 to June 30, 2008, said the WB Beijing office on Wednesday. The WB's Board of Executive Directors approved four new projects in China on Tuesday, the last four for the fiscal year of 2008, said the WB Beijing office.These four projects were excellent examples of how the WB could help China with its environmental and social challenges, said David Dollar, World Bank Country Director for China. The new rural health project, getting [a] WB loan of $50 million, sought to support and extend the rural health reforms carried out by the Chinese government by testing a series of new innovations in financing, delivery of services and basic public health.
The WB would lend $50 million to the new rural migrant skills development and employment project. The project would support China to deal with the human skills challenge rising from its huge rural migration during urbanization. The WB would work with local governments of northwestern Ningxia Hui Autonomous Region, East China's Shandong and Anhui provinces, and the Ministry of Human Resources and Social Security to improve skills development programs for migrants.
Through the new Xi'an sustainable urban transport project, with a WB loan of $150 million, bus prioritization, bicycle routes, traffic calming and speed-reducing strategies would be introduced in an effort to foster better road use and access to cultural sites in the northwestern city renowned for Terracotta Army and other cultural relics.
The WB would also lend $300 million to help construct a new 355-km dedicated high-speed passenger rail line between Shijiazhuang, capital of north China's Hebei Province and Zhengzhou, capital of central Henan Province. The rail line is part of the new 2,100-km dedicated high-speed passenger rail line linking Beijing with Guangzhou, capital of South China's Guangdong Province. Upon completion in 2010, the rail line is expected to provide a major boost in rail transport capacity while reducing the travel time for passengers from present 24 hours to less than 10 hours.
China continues to be one of the largest borrowers with the World Bank during the fiscal year 2008. Most WB projects approved this year aim to address environmental challenges through improvement of public transport systems, expansion of urban wastewater treatment and pollution control, and strengthened approaches to energy efficiency, said the WB Beijing office.
In the aftermath of the May 12 earthquake in southwest China, the WB offered China a 1.5-million-dollar grant to support technical assistance for recovery and reconstruction efforts as well as expertise assistance.
