The World Bank announcement canceling the $1.2 billion credit to Bangladesh for Padma Bridge construction may have shocked most people in Bangladesh. However, it is no surprise to the people, either at the World Bank or at the other development agencies, who have been monitoring Padma Bridge development over the last one year or so. I can understand the shock and surprise of the average person in the country, but I cannot understand why those who had been involved in discussions with the World Bank through the run-up to the cancellation announcement should be surprised or pretend to be surprised.
The Bank first communicated with our government on the reported foul play in the bidding for hiring management consultants for the project and the findings of the institution on suspected shenanigans by some of our top public servants as early as September, 2011. Instead of working with the Bank on this reported misconduct and illegality, and carrying out an impartial investigation, our response has been a stubborn denial of any wrongdoing and defense of the persons accused of corruption.
Instead of removing this cloud of suspicion of misdeeds and examining the evidences proffered by the Bank through a mutually acceptable third party, we engaged our own investigators who have defined limits and authority to operate. We did not seem to care whether the investigation could be fair or impartial when the people suspected of perpetrating the alleged misconduct were kept in positions of power and authority. Should we be surprised that the World Bank cancelled the Credit?
I understand the discomfiture and indignation of our senior public servants and national leaders at the disassociation of the World Bank from such a nationally important project. And that too on charges of venality by some public servants tasked with implementing the project. But could we not have avoided this discomfiture and indignation by taking actions to make right what went wrong? No country wants to be dictated on how to conduct its policies, let alone how to govern. However, when a country asks for partners to assist in its development, it consults with the partners and takes their advice.
The World Bank has been Bangladesh’s development partner since our independence. It provides a major part of funds for our annual development programmes. Most of our major development projects carried out in last forty years were spearheaded by the Bank.
The financial assistance that comes from the World Bank is actually funded by the International Development Agency (IDA), the low-cost financing arm of the World Bank Group. The financial assistance, called Credit, bears no interest and is repayable over 30-40 years. Each Credit has a small commitment fee. IDA Credits are available to low-income countries of the world. Bangladesh is among fifty or so low-income countries that currently receive this type of assistance. The World Bank assistance for Padma Bridge was also a no-interest Credit for $1.2 billion. A major fallout of this cancellation is that we have to seek an alternative source, but at a higher cost.
Cancellation of a loan or IDA Credit is a loss to the Bank also. It takes months or even years to take a project to a stage where it can be properly appraised, and later approved, by the Bank’s Board of Directors. Enormous amount of resources in money and staff time are spent in bringing a project to the final stage. The Bank gets no delight in canceling a project. In fact, very few projects have been canceled or suspended in recent times by the Bank on charges of corruption or foul play — the last major project where the Bank did so was the Chad-Cameroon Oil Pipeline. The loans and credits funded by the World Bank form the principal assets of the Bank. No entity would like to erode or diminish its assets.
The decision for cancellation of the Padma Bridge Credit must have been a tough one for the Bank. It was based on hard findings of the Bank’s Integrity Vice-Presidency (INT) — the unit that is tasked with dealing with charges of corruption and misconduct in Bank Group financed projects. In FY10, INT managed a case load that spread across 84 countries and 260 projects, all while closing investigations well under targeted timeframes. As a result of INT’s investigative work, the Bank Group in FY10 debarred 45 firms, individuals and non-governmental organisations.
The World Bank had presented the findings of INT on alleged misconduct and improper dealings in Padma Bridge management contract bid to our government, and had been holding discussions for an amicable resolution. It is our misfortune that we failed to show serious interest in our follow-up to these findings by holding an impartial third-party investigation. We were given opportunities but we did not use those to our advantage. We buried our heads in the sand, and expected that we would tide over these accusations and get the Credit back when a new administration took over at the World Bank. But we do not know that policies never change in international organisations with every change in leadership, unlike in some countries in our part of the world.
Self-righteousness works when one does not need the help of others. It works poorly when a country needs every support it can garner to serve its poor masses. When our capital investment for infrastructure requires massive financing from external partners we cannot afford not to listen to their advice. The World Bank may have canceled the IDA Credit because it thinks this is the best way to respond to our seeming unresponsiveness. But the door need not be closed forever, if we realise that for the greater good of the country and our people we have to take some bold and corrective steps. A nation’s interest is much more precious and our people’s future is much more important than preserving the interests of an individual or a few people.
I do believe that the government will take steps to reopen the dialogue with the World Bank. The Bank remains and should remain our development partner.
The writer is a former civil servant and a World Bank retiree.