Sir: Michael Irwin's attack on the World Bank (Money in
the Bank, 18 August) deserves some comment. Of course the Bank — like any other large bureaucracy — is imperfect. But to imply, as Dr Irwin does, that it is one vast gravy train achiev- ing next to nothing for the world's poor is a ludicrous distortion of the facts.
The Bank has made a huge contribution over the years to promoting development in the Third World. It is without peer among international development agencies in terms of the funds it has mobilised and disbursed and in using them effectively.
If the poor have fared badly in the 1980s it is not because of the Bank. The economic adjustment forced on developing countries by their high indebtedness and worsened terms of trade was bound to be painful. The policies that many of these countries adopted in the face of adverse conditions were not only inappropriate but often favoured the richer sections of the com- munity — especially those wishing to get their capital out of the country — rather than the poor. The Bank's structural adjustment loans that Dr Irwin dislikes certainly need to be handled with care. But without the adjustment programmes that such loans have helped to finance, the poor would almost certainly have fared even worse in recent years. Dr Irwin criticises the Bank for its 'large net profit'. In fact the Bank's profits have not been large relative to its assets, but large enough to enable it to go on borrow- ing in the capital markets at the lowest interest rates. This in turn has enabled it to lend at the lowest possible rates to de- veloping countries. In years when profits have been sufficient, the Bank has trans- ferred the surplus to its soft loan associate, the International Development Associa- tion, which assists the very poorest coun- tries. Not a penny has been paid to the richer country shareholders.
Finally, Dr Irwin's remarks about Bank salaries and perks fail to address the real issue — whether as a total package they are sufficient, but not too generous, to attract and retain high quality staff from all its member countries, including Europe. If one accepts the principle of equal pay for equal work within multinational organisa- tions, then by the standards of the market — which the Bank cannot ignore — there is no evidence that, for the kind of people the Bank needs, its pay and pensions are excessive. The market for many of the skills the Bank needs is simply not the one in which the UN mainly recruits.
Frank Cassell
Upfield, East Croydon, Surrey
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