World Bank Spending on Health/Education Plummets

From Results, 5 November 1997o

Summary

In January 1996, World Bank President James Wolfensohn promised that the World Bank would increase its health and education lending by 50%, to about $5 billion per year for the next three years, with an increasing share going to primary health and basic education.

However, Bank lending for health and education plummeted to about $2.25 billion in 1997. The Bank is not on target to fulfill Mr. Wolfensohn’s promises, and has in fact taken an enormous step backward.

Strategy

We will write members of Congress and ask them to send a letter to World Bank President Wolfensohn, expressing concern about the Bank’s failure to achieve his promises to increase lending for health and education (especially for primary health care and education for the poor), and the fact that the Bank actually reduced lending for these areas by almost half.

Need Is Great

• Seventeen million people, the majority of them children, die each year from preventable or curable infectious diseases, including diarrhea, pneumonia, tuberculosis and malaria.
• Of the world’s 18 million HIV-infected people, more than 90% live in developing countries.
• Millions of children are still out of schooly130 million at the primary level.
• More than a third of all children are malnourished.
• The most unconscionable thing about these conditions is that they are largely preventable.

Bank Lending Dwarfs U.S. Aid

The World Bank can have enormous impact, for good or for ill, because of its volume of lending and because of the policies it promotes. The Bank lends $20 billion a year and is the world’s largest single provider of lending for health and education. World Bank President James Wolfensohn promised to increase health and education lending to about $5 billion per year, with an increased share going to primary health and primary education. This figure represents almost triple the U.S. Agency for International Development’s total development assistance budget of $1.7 billion, and five times UNICEF’s annual budget of $1 billion.

Promises Made

In January 1996, in response to a letter signed by over 1200 members of Congress and parliamentarians in seven other countries, James Wolfensohn wrote that the Bank planned to spend about $15 billion over three years for health care, education, nutrition, and AIDS prevention, with an increasing share going to primary education, girls’ education, and primary health care. Yet World Bank figures for fiscal year 1997 show that overall lending for education and health has plummeted from roughly $4 billion in 1996 to just $2.25 billion in 1997. Clearly the Bank is not on track to reach Wolfensohn’s $15 billion over 3 years.

Particularly hard hit has been education lending for the poorest countries. Education lending by the International Development Association (IDA), the Bank’s low-interest lending program that lends to the poorest countries fell from $785 million in 1996 to $255 million in 1997. IDA education lending in Africa was only about $100 million. A World Bank Vice President called 1997 lending for education in Africa nothing short of catastrophic.

Lending for the sectors most critical to the poor has also fallen sharply. Total Bank lending for primary education fell from nearly $700 million in 1996 to just over $400 million in 1997. Total Bank lending for primary health in 1997 was half of the 1996 level.

Time for Congress to Act

Because the US is a major donor to the Bank and annual Bank funding must be approved by Congress, the World Bank is very sensitive to congressional concerns. It is vital that Congress urge the World Bank to ensure that the decline in primary health and education lending is reversed for 1998, and that a clear plan is put in place now, to get the Bank back on track to reach Mr. Wolfensohn’s critical promises.

ACTION

Write a brief letter to your member of Congress.

1. Introduce yourself and share your commitment to ending the worst aspects of poverty.

2. Explain the importance of applying the enormous resources of the World Bank to meet the health and educational needs of the world’s poorest people.

3. Point out that the Bank has fallen far short of the 50 percent increase (to about $5 billion per year) for health care and education lending (with an increased share to primary health care and education serving the poor) promised by its president. Express your concern that health and education lending has, in fact, plummeted from $4 billion in 1996 to $2.25 billion in 1997.

4. Ask your Rep. to write to World Bank President James Wolfensohn, urging him to ensure the Bank is back on track to deliver on his promise, and ask him to provide plans for doing so. Address: Hon. ______, House of Representatives, Washington, DC 20515

NOTE

For even more impact, ask your member of Congress to send a copy of the letter to Secretary of the Treasury Robert Rubin. (US Treasury oversees US policy with the World Bank, and is very concerned with what Congress sees as priorities).