Lesson in Mexican Village’s Relocation: Follow the Money : Aid: The resettlement is raising concerns over how the World Bank enforces its policies on projects it funds.

Marcelina Cervantes has spent most of her 61 years cooking over a fire, lugging water in buckets and using a latrine. But earlier this year, she bought her first gas stove, and, later this month, she will move into a house with plumbing and tiled walls.

Still, she is desperately worried.

“What good does it do us to have fancy stoves and pretty houses if they are taking away our land?” she asks, pouring a glass of pulque, the local moonshine, in her log cabin-style kitchen, where chickens pluck kernels from the dirt floor.

Cervantes’ village and two others with a total of 435 families are snuggled into a river valley that will be flooded in September when the Zimapan hydroelectric dam is complete. Along with their houses, the dam will destroy orchards and irrigated fields in what is now an oasis in the semi-desert of the Central Mexico plateau.

Because the Zimapan dam is being built with World Bank financing, Cervantes and her neighbors should have received new land, similar to the holdings they will lose. Instead, they received only money--a violation of 3-year-old bank guidelines on resettlement.

Once the money runs out--experts warn--the new, suburban-style development to which Cervantes and her neighbors are being moved will probably become a ghost town. That’s because farmers without arable land are likely to migrate to the United States to join other former villagers already working on Texas ranches and New Jersey construction sites.

The Zimapan project and other such situations across the globe have raised concerns about the World Bank’s ability and willingness to enforce its policies on projects it funds. The bank is reviewing its projects with resettlements, a study scheduled for completion in December. An interim report, to be published this month, is expected to call for closer monitoring of bank-financed projects.

“We expect to show that the bank has made things better,” said Scott Guggenheim, a World Bank anthropologist. “But we don’t know what is going on with individual projects.” He plans to recommend that the bank create a database to provide that information, keeping officials better up-to- date on projects.

Officials say there may be blind spots in bank monitoring because of the way the institution lends. The World Bank tends to make large loans to finance several projects with the same purpose.

Mexico, for example, will need twice as much electricity in 12 years as it has now. That new supply is expected to come from various sources, the cheapest way still being via dams.

The World Bank in June, 1989, lent Mexico $460 million to help finance $1.44 billion in hydroelectric projects, including $312 million for Zimapan.

The Zimapan project, in compliance with bank guidelines, included $17.6 million for resettlement.

The bank, in a news release, emphasized that this work would be done so as to “ensure that the livelihoods of these people are protected, that they are compensated for belongings that may be lost and that they are given land and new homes that will include . . . irrigation, roads, drinking water and sewerage, schools, churches and health facilities.”

The loan attracted much attention because it was the bank’s first to Mexico’s power industry since 1974. The communities being destroyed also are less than three hours north of Mexico City, making the river valley a prime study site for anthropologists and sociologists.

“A woman came from Sweden to write her dissertation. In fact, 11 doctoral dissertations have come out of this, not to mention all the undergraduate theses,” said Guggenheim, explaining why bank officials learned more about Zimapan than usual.

What they found, however, was not encouraging. Because all three villages belonged to the same semi-communal farm and most people are related to each other, officials had expected that they would easily take a common stance in resettlement negotiations with the government-owned power company building the dam. Instead, a bank consultant reported last year that such issues have riven the community.

The biggest split was over irrigated land, said Procoro Cervantes, Marcelina’s brother and a resettlement committee member.

“We have about four miles worth of irrigation pipes here,” he said.

“What we really wanted was four miles of irrigation pipes up on the plateau by the new houses. But the power company said, ‘No, it is too expensive’ and offered to buy irrigated farm land instead.”

Some committee members wanted to add land to their holdings rather than irrigate sites they can already farm in years when there are heavy rains. The power company bought four farms nearby, which the farmers insisted on studying before they accepted them. They found that yields there were about one-third of what they got on land they now own; the irrigation pumping costs would be double. They refused the land.

The power company officials then offered to sell the farms and to split the money among the Vista Hermosa families.

Procoro and Marcelina’s brother Galdino, who was president of the resettlement committee, insisted that the company seek other farms. Galdino was found murdered a year ago in a case still unsolved. “After that, I just keep quiet,” said Procoro, 48, a father of eight.

The other families also decided to accept a generous cash settlement from the power company. Now, the village is full of new pickup trucks, satellite dishes and gas stoves.

“The money has all been spent,” Procoro said. “I see nothing ahead for us but misery.”

Guggenheim said the decision to accept money instead of land was the villagers’ choice. “When people insist this is what they want, what do you do?” he asked.

But Scott Robinson, an anthropologist at the Autonomous Metropolitan University in Mexico City, said Zimapan represents a serious problem in that the bank seems to end up letting governments and public utilities do what they want, in violation of its resettlement guidelines.

“When push comes to shove, the monitoring process breaks down,” he said.

He said he believes that the bank should refuse to provide more funding when its resettlement guidelines are violated; an arm of the bank has taken such strong steps, threatening--under pressure from Canadian and Finnish delegates--to withdraw from a Chilean dam project because of environmental concerns.

Washout Ahead

More than 400 families near Vista Hermosa, Mexico, will be flooded out of their homes when a hydroelectric dam is completed in September. As compensation, they received money--not land--and have since spent most of it.