Monday 24 June 2002

Pic of the day: You probably know already where my sympathies lie. (Actually the game of Capitalism was rather boring, in my humble opinion. The real thing is far more interesting.)

World Bank - threat or menace?

The World Bank has gathered scientists from all over the world in Oslo today to debate what can be done to fight poverty in the third world. Protesters are gathering to demonstrate.

Way to go, boys! Who cares about poverty anyway? Them damned filthy niggahs deserve whas's comin' to 'em, thas wot we always said!

OK, that's probably not what they mean. I'm not even sure they mean anything at all. Perhaps it's just a Pavlovian reaction. You remember Pavlov and his dogs, right? He kept ringing a bell every time he came to feed them, and after a while the dogs started drooling as soon as they heard the bell, even with no food around. This works on humans to - most TV advertising is based on this mechanism. So I guess professional protesters may start drooling as soon as they hear "World Bank".

***

Or perhaps they are just not very bright. I got to admit, "World Bank" does sound evil. Like what you get when the big capitalists have bought out the smaller capitalists until there's only one left. A small secret group of trillionaires, Jews no doubt, secretly controlling all money in the world, and using it for their own dark and unknown ends. Just like the "World Trade Center", and we know what happened to that.

Perhaps someone with more insight in psychology and less in marketing should have decided the name of what is now the World Bank. Even leaving it to bureaucrats might have been better. "International Poverty Alleviation Institute" sounds fairly harmless ... Benevolent but toothless. Which is quite a bit closer to the truth.

But hasn't the World Bank contributed to hardship and misery in the third world? Not really. It may have failed to end or prevent such suffering, which is why we have these conferences of experts to improve the procedures. But the World Bank does not have the power to impose economic problems in the first place.

Basically, if a country thought they would be better off without the World Bank, there are no armed troopers forcing them to borrow there. Once they have borrowed, though, they are naturally supposed to pay back sooner or later. With interest. That's the way of banking, m'dear.

***

Just like people, countries don't suddenly wake up in debt. OK, just like some of us at least. ("Ethanol makes strange bedfellows" to quote Los Angeles Times.) If you're sober and sane, you don't apply for a loan you're not sure you can pay back, unless you're really desperate. And if this is your first encounter with that bank, it is hardly to blame for your plight. In the same way, countries who go to the World Bank are usually not the most affluent.

The World Bank has no power over Norway, for instance, even though we are a small nation of less than 5 million people. But we are flush with money and deliciously creditworthy. Actually, we were a poor colony once too, but after we switched to democracy in the 19th century things have been gradually improving. I recommend it for anyone. Try a generation or two with democracy, rule of law, and absolutely no civil wars. I bet that would solve your economic problems. I can't offhand think of any place where it has failed to do so. Nor can I think of any place where random dictatorship and infighting has failed to ruin the economy. It's kinda stupid to expect the World Bank to fix that. It's just a bank of last resort, lending to countries that cannot get credit elsewhere.

Now, it can be argued that a third world country that has ousted its dictators should have their debts cleared. After all, the money is usually in the private accounts of its former rulers, with little or no hope of ever getting it back. But someone's gotta pay. If our leftist demonstraters would be so kind as to shell out the money, that would be just peachy. Clearly those who can afford to travel across half the globe must have some money to spare, at least. Actually I wouldn't even mind if governments in the rich world coughed up some coins for the project. It would probably be a good investment, because of the increased trade with a country growing into a decent standard of living. Though I'd like to see these countries take a few steps on their new course before we bail them out completely.

But blaming a bank for not cancelling the debt of a repentant person is kinda dumb, if you ask me. Much less an unrepentant criminal gambler. And I happen to think the same applies to countries.