Bank Should Retract China Loan

The World Bank’s provisional decision last year to lend Beijing $40 million for the forced resettlement of tens of thousands of poor Chinese to the Tibetan plateau has been a source of controversy and embarrassment. The Tibetan spiritual leader, the Dalai Lama, sees the proposed resettlement--which would affect the area where he was born--as “cultural genocide.” The U.S. and German representatives to the World Bank voted against it, and Tibet supporters around the globe opposed it as an encroachment on Tibetan culture. An independent panel of experts concluded that the bank’s staff violated many of its key policies in approving the loan. The bank’s board of directors, which is scheduled to vote on the project in early July, should scrap it.

The World Bank has poured more than $33 billion into China over the last 20 years, molding its decisions to the country’s “political and social context,” a criterion apparently applied only to China. No wonder it found nothing wrong with Beijing’s decision to involuntarily resettle 58,000 impoverished Chinese from the barren region of Qinghai province, in western China, to a nearby region that the Tibetans consider part of their homeland.

The review panel found many things wrong with the bank’s backing of the project, according to leaked reports in the media. It said the bank failed to consult with the Chinese who would be resettled or the Tibetan herders whose plateau would be altered forever by the resettlement. It did not comply with its own environmental assessment rules and failed to consider the long-term impact of the project. Rather than open the report to public scrutiny, as requested by 60 members of the U.S. Congress and the bank’s own top management, the 24-member board decided over the weekend to keep the report under wraps and release it only after the final decision is made.

The World Bank has come under a great deal of criticism lately for its behind-closed-door deal-making and lack of accountability. The decision to suppress the report only reinforces this image.

More important, the report itself clearly shows that the loan for the resettlement project was ill-considered. The influx of Chinese would create the danger that Tibetans would be displaced in their own economy, a long-term effect the bank did not consider. It would also deepen resentment between the two peoples.

The World Bank should now heed the scathing independent review of the resettlement project and cancel its funding altogether.