Protecting Indigenous People: Recent Recommendations for UN Conference 2014

June 21, 2013

 

Greetings from Honduras.

The “Alta Outcome Document,” described in a VOA headline as “Indigenous Peoples Stand Up to Exploitation” and more circumspectly by The United Nations Permanent Forum on Indigenous Issues (UNPFII) — an official advisory body to the UN Economic and Social Council (ECOSOC) — as “a set of recommendations,” was signed in Alta, Norway on June 12, 2013 with the expectation that it will serve as the basis for the upcoming UN World Conference on Indigenous Peoples in September 2014.

Two of the main themes of the Alta Declaration are directly related to approaches strongly advocated in this Blog site: (1) participatory involvement of persons directly impacted by “development” interventions and (2) the need to understand, acknowledge, and respect non-formal parallel governance systems to achieve more effective, efficient and properly targeted assistance to poor people.

For further information on the UN-sponsored World Conference for Indigenous People, September 22-23, 2014 (New York, NY), see http://www.wcip2014.org/ — a very good source of information about “indigenous people” worldwide and, in particular, http://www.wcip2014.org/background .

For UNPFII’s description of the “Alta Outcome Document,” see http://social.un.org/index/IndigenousPeoples/tabid/70/articleType/ArticleView/articleId/151/Preparatory-Meeting-in-Norway-Declares-Common-Position-for-2014-World-Conference-on-Indigenous-Peoples-to-Be-Held-at-Headquarters-22-23-September.aspx .

For VOA’s background coverage of the meeting in Alta see http://www.voanews.com/content/indigenous-peoples-21jun13/1686379.html .

Best, Jerry

Advertisements

Help Change the Lives of Young Girls in One of Africa’s Largest URBAN Slums

April 24, 2013

Help the Uweza Foundation meet the “Raise for Women Challenge” sponsored by The Huffington Post, Skoll Foundation, and Half The Sky Movement by donating any amount through Crowdrise at either http://www.crowdrise.com/UwezaGirls or http://www.crowdrise.com/uwezagirls/fundraiser/uweza . A donation is any amount whatsoever will be very much appreciated.

If you believe as I do that developing girls’ self-esteem and providing them with advanced formal education is an important contribution to breaking the cycle of poverty, please donate today. The Challenge is open for only a short period of time – from today (April 24th) to Thursday, June 6th.

The sponsors of this Challenge will donate up to an additional $25 thousand depending on the amount raised by Uweza (or other NGOs) during the short time available under the terms of this fund-raising competition.

Information, films, and photos focused on Uweza – a US tax-exempt 501(c)(3) Foundation registered in the State of Illinois – supports several “demand-responsive” programs assisting children and women in Kibera, a slum neighboring Nairobi, Kenya, is also available at either of those two websites.

Uweza has very low overheads and accomplishes an awful lot of good on an annual budget of only about $150 thousand a year. As a former World Bank staff person used to dealing in much larger sums, I cannot express how impressed I am by the due diligence, record keeping, and fundamental accomplishments of this small NGO.

In the interest of full-disclosure, I am one of only five (5) completely unpaid volunteer Uweza Board Members, the only male, and by far the oldest.

Best Wishes, Jerry


Kenya Election Results: Empowering Kenyan Girls is the Next Step for a Peaceful Kenya

April 10, 2013

As many of you know, I am on the Board of a US-based Non-Profit (the Uweza Aid Foundation) that assists women and children in Kibera, the largest “slum” — or preferably non-formal settlement — at the periphery of Naroibi, Kenya. With that in mind, I believe you will find this article  — …Empowering Kenyan Girls is the Next Step for a Peaceful Kenya both interesting and informative.

Written by fellow Uweza Board member Amy Augustin, the article focuses primarily on the need for, and results of, Uweza’s collaboration with No Means No Worldwide to provide a two-day self-defense and life skills training course to more than thirty girls at Uweza’s Kibera community center. This is an important program in the face of an epidemic of gender-based violence in non-formal settlements like Kibera throughout much of the world.

Clearly, Uweza’s work in Kibera is entirely consistent with the “demand-driven” approach advocated my blog International Development Should….


The geo-branding war

May 22, 2012

This is the first time I have re-blogged a post from another site (and yes, with permission). I have done so because I find it both provocative and something about which I largely agree.

Thanks to David Levine for sending this to me.

Jerry

Africa is a Country (Old Site)


Geo-branding is a serious thing. It is particularly serious when people from other geographic areas decide to brand your geographical area and the people in it, the way they see fit and the way that fits their purposes. No other country, region or continent, I’d argue, suffers from other peoples’ nonsense as much as the continent of Africa. Actually, the reason why people generally and casually talk about Africa as one place is because of what Nigerian-American author C. P. Eze refers to as “their geo-branding war”.

View original post 2,066 more words


HISTORY MATTERS: ESTABLISHING THE WORLD BANK & IMF

February 21, 2011

The whole history of civilization is strewn with creeds and institutions which are invaluable at first, and deadly afterwards.                       Walter Bagehot (1826-1877)

The international framework for development assistance that continues with almost no real changes until today was officially agreed between July 1944 and October 1947. The first piece of that institutional architecture was agreement by forty-four countries to establish the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD) during the Bretton Woods Conference in New Hampshire (July 1-22, 1944).1 The second piece was the agreement by fifty countries to establish the United Nations during the Conference on International Organization in San Francisco (April 25 – June 26, 1945) while the third piece was the agreement of twenty-three states to abide with the draft terms of a General Agreement on Tariffs and Trade (GATT) on October 30, 1947. All of those entities were established largely at the initiative of American and British intellectuals and political leaders for purposes substantially different than many of the missions pursued today by those organizations, including the World Trade Organization (WTO) that has since January 1, 1995 served as the organizational expression of the GATT. This post focuses on the establishment of the IMF and the IBRD. Future posts will focus on the establishment of development-oriented United Nations’ specialized agencies and the inauguration of the Marshall Plan.

Precursor Programs (1941-1943)

The primary precursors of today’s development assistance architecture were the Lend-Lease program established in 1941 and the United Nations Relief and Rehabilitation Administration (UNRRA) established in 1943. Both of these were established as temporary agencies with no expectation that they would be continued much beyond the end of World War II. Lend-Lease initially provided for the transfer of food, machinery, war supplies, and services to China and the countries of the British Commonwealth, although it was expanded almost immediately to the Soviet Union and the “Free French.” The Lend Lease Act authorized the American President to sell, transfer, lend, or lease such goods and services and to establish the terms for such transfers.  Repayment could be –

in kind or property, or any other direct or indirect benefit which the President deems satisfactory.

By the time of its official termination in August 1945, total Lend-Lease commitments exceeded $ 606.60 billion in constant 2010 dollars (all dollar amounts are presented in constant 2010 dollars throughout the remainder of this post).

When UNRRA was established In 1943, the United Nations as we know it today did not exist. Although President Franklin Roosevelt had used the term “United Nations” in 1941 to describe countries fighting against the “Axis,” the first official use of the term was on January 1, 1942, when twenty-six states signed the “Declaration by the United Nations” committing them not to enter into any separate peace with the Axis Powers.

Although the Lend-Lease program was established to meet immediate needs faced during the War, UNRRA’s mission was to provide assistance to areas liberated from German, Italian, and Japanese occupation.2 About $40 billion of emergency assistance was disbursed through UNRRA, including financing of food and medicine, the restoration of public services, the revitalization of agricultural and industrial production, and, ultimately, the return of approximately seven million displaced persons to their home countries. By the time its functions were transferred to other newer United Nation’s specialized agencies in Europe (1947) and Asia (1949), fifty-two countries had participated in UNRRA’s programs. Of the total amount disbursed, approximately sixty-two percent went to the United Kingdom followed by the Soviet Union with about twenty-two percent. China, Czechoslovakia, Greece, Italy, Poland, the Ukrainian SSR, and Yugoslavia were the other primary recipients.

The most interesting aspect of the UNRRA experience was that it served as an organizational and financial model for future multi-lateral assistance agencies. More than half of UNRRA’s budget was financed by the United States, but the remainder was provided by other member-countries through financial subscriptions equivalent to two percent of their 1943 gross national incomes (GNI). As will be discussed in a future blog post with respect to the World Bank, financing through member-country subscriptions has been the primary way most international organizations have been financed since the end of World War II.

The Foundation of The Current System

The period between 1944 and 1947 differed from the present in two significant respects. First, in 1945 the international political status of the world’s peoples remained largely divided among those in independent and dependent territories. Second, as already discussed in The More Things Change: Development’s Colonial Heritage posted January 10, 2011, the economic landscape in 1945 was littered with post-World War II wreckage over which the United States dominated as a largely unscathed economic colossus, holding approximately ninety percent of the entire non-communist world’s official gold reserves and producing at least seventy percent of the entire non-communist world’s GNI. 

It was in that context that delegations representing almost all of the Allied anti-Axis countries convened at Bretton Woods to consider the establishment of the IMF and IBRD to provide short-term loans to sovereign-state governments when necessary to meet immediate international debt repayments and long-term investment capital to sovereign-state governments. Seventeen months later, on December 27, 1945, both organizations were officially established.3

Similarities

Although the original objectives and membership of the IMF and World Bank have changed dramatically since 1945, the international balance of power existing at the end of World War II continues to be reflected in the Articles of Agreement of both organizations. In addition to both organizations being headquartered in Washington, D.C., members of both organizations adhere to the original tacit agreement that the President of the World Bank is always an American nominated by the United States’ Government and that the Managing Director of the IMF is always a European. Further, the United States and its current allies together still retain a majority of weighted voting rights within the IMF and World Bank.

The IMF and World Bank are organized and managed in similar ways. They are both membership organizations, the members of which are sovereign-states represented by their respective governments. Only member-states may serve as guarantors of any financing received by their governments or other entities within their jurisdiction. Both organizations assign weighted voting shares to their indivudal sovereign-state members proportional to the number of “Quotas (IMF) or “Shares” (World Bank) assigned to them. The IMF and World Bank are each governed separately by their own Board of Governors consisting of senior serving officials of member-state governments. These Boards normally meet only once a year during joint IMF/World Bank Annual Meetings. The on-going governance of both organizations is delegated to resident Executive Directors, a few of whom are appointed by countries that have sufficient voting rights to cast their own whole vote, one or two others who choose to be represented full-time even though they have only a partial vote, and the remainder elected by a combination of member-states that together have the equivalent of approximately one vote.

Differences

Despite similarities, there are substantial differences between the IMF’s and IBRD’s purposes, organizational arrangements, and operational procedures. 

International Monetary Fund

As clearly laid out in the IMF’s Articles of Agreement,” its purpose is not “development;” nor is that its main purpose today. Rather, it was established to facilitate the balanced growth of international trade through the maintenance of market-determined currency exchange rates and balance of payments among trading partners. Its primary mechanism for achieving those objectives was the provision of short-term loans to governments in countries not able to pay their immediate foreign currency denominated international debts. Why was this viewed as important during 1944 and 1945? 

By 1944, the United Kingdom and the Soviet Union alone had already accumulated a Lend-Lease debt of $384.7 billion and $136.5 billion respectively. More than $86.9 billion had been borrowed by China, France, and other countries of the British Commonwealth under Lend Lease and another fifty-two countries had borrowed an additional $49.6 billion from UNRRA. World War II had devastated European and Soviet economies. Their own currencies were worth even less in 1944 than they had been in 1939. By normal market standards, those currencies had no real value internationally at all. So how could the victorious European countries be reasonably expected to get their hands on sufficient amounts of United States’ dollars to pay back both current and projected debt while also financing imports of both capital and consumption goods? Institutionalizing an organizational mechanism to meet those requirements was the immediate issue that the IMF was expected to address when created in 1945.

But the founding members of the IMF were concerned not only with that immediate short-term problem. They also recognized that maintaining balance within the global international trading system over the longer term could not reasonably be expected under the conditions prevailing at the end of World War II. The need to smooth-out short-term international currency shortfalls and maintain stable international exchange rates was perpetual. Responsibility for responding to those longer range issues was also assigned to the IMF.

Powers of the IMF. Most founding members of the IMF and World Bank viewed the former as more important for international peace and stability than the latter. The IMF’s assigned responsibility to “oversee the international monetary system” was extremely comprehensive. As outlined in the IMF’s Articles of Agreement

In order to fulfill its functions.., the Fund shall exercise firm surveillance over the exchange rate policies of members…. Each member shall provide the Fund with the information necessary for such surveillance…. The Fund may determinethat international economic conditions permit the introduction of a widespread system of [currency] exchange arrangements based on stable but adjustable par values [Article IV]…. A proposed par value shall not take effectif the Fund objects to it…[Schedule C]. 

The primary mechanism for surveillance are “Article IV Consultations” normally conducted every year with each member-state to assess whether or not –

a country’s economic developments and policies are consistent with the achievement of sustainable growth and domestic and external stability.

The original intention was that Article IV Consultations would focus exclusively on a country’s –

exchange rate, fiscal, and monetary policies; its balance of payments and external debt developments; the influence of its policies on the country’s external accounts; the international and regional implications of those policies.

However, such consultations have been expanded to include –

all policies that significantly affect the macroeconomic performance of a country, which, depending upon circumstances, may include labor and environmental policies and governance…; [as well as] capital account and financial and banking sector issues… [and] the identification of potential [international financial] vulnerabilities

Penalties made available to the IMF to punish member-states that pursue exchange rate policies not approved by the Fund are potentially draconian — equivalent to being “cast-out” into the international financial wilderness. Article XXVI provides for a three-step sequence of actions: (1) suspension from access to loans; (2) suspension of voting rights; and (3) expulsion from the IMF itself. And again, if expelled, what then? Article XI is clear enough –

Each member undertakes (i) not to engage inany transactions with a non-member or with persons in a non-member’s territories which would be contrary to the provisions of this Agreement or the purposes of the Fund; (ii) not to cooperate with a non-member or with persons in a non-member’s territories in practices which would be contrary to the provisions of this Agreement or the purposes of the Fund; and (iii) to cooperate with the Fund with a view to the application in its territories of appropriate measures to prevent transactions with non-members or with persons in their territories which would be contrary to the provisions of this Agreement or the purposes of the Fund.

According to Chittharanjan Felix Amerasinghe, the expulsion power has only been used once against Czechoslovakia in 1954 for failing to provide data requested by the Fund. That action followed Czechoslovakia’s explusion from the World Bank for non-payment of its authorized share capital that same year. And although attempts to expel Zimbabwe have been under consideration for years, no action has yet been taken. But when those powers were first authorized for the IMF in 1944, the objective was to ensure compliance of members in future — it had no history at that point. And it is clear that the objective of establishing and maintaining stable exchange rates linked to the needs of international trade were of sufficient importance to the founding members to provide for those previously unheard of powers by the IMF; powers that it still has today. And it is likely that Article XI reinforced the “Iron Curtain” separating the United States and its allies from the Soviet Union and its allies into not only different political camps but into distinct financial and economic camps as well. Indeed, it is likely that the Soviet Union did not become a member of the World Bank in 1945 because it was not willing to accept the IMF’s powers to interfere in its internal monetary affairs. And membership in the IMF is a pre-condition for membership in IBRD even though membership in the Bank is not required to join the IMF. Finally, it is important to keep in mind that the governments willing to accept the extensive powers of the IMF in 1945 were substantially more like-minded than is the case today. Almost all of those countries shared similar political cultures and basic premises about their national interests.

Financing the IMF. The IMF’s primary source of financing are “Quotas;” which consist of the capital subscriptions paid by each member-state revenues generated from the investment or use of Quotas. A member-state must pay its entire subscription in full; a major difference from the way the IBRD is financed. At the time the IMF was created, the requirement was that twenty-five percent of the subscription was payable in gold pegged to the United States dollar with the option of paying the remainder in the member-state’s own currency; although the requirement for payment in gold was abandoned in 1978.4 

Poverty Reduction.  Given those international trade and monetary objectives, why is the way the IMF was organized in 1945 important for the way attempts to reduce poverty within developing countries is implemented today?  There are at least two important reasons. First, the IMF was provided with substantial powers to intervene in the internal decision-making of its sovereign member-states – even though at that time those powers were limited essentially to currency exchange rate policies. Second, those powers were carried forward when the IMF expanded its limited original role to the fundamental reform of domestic economies (late 1970s) and, more recently, policies directed to the reduction of poverty (late 1990s).

World Bank

When established, the IBRD was viewed as having a relatively limited mandate. For economic and financial matters, Keynes clearly viewed the IMF as substantially more important; one of the reasons why membership in the fund is a pre-requisite for membership in the bank but not the other way round. It certainly was not the dominant organization in the development assistance arena; indeed there was no such thing in 1944 or during the years immediately following World War II. And no one envisaged anything like today’s “World Bank Group” consisting of five distinct organizations: (1) IBRD; (2) International Finance Corporation (IFC,1956); (3) International Development Association (IDA; 1960); (4) International Centre for the Settlement of Investment Disputes (ICSID, 1966); and (5) Multilateral Investment Guarantee Agency (MIGA, 1988). Each of those five organizations are governed according to their own Articles of Agreement (IBRD, IFC, and IDA) or Conventions ICSID and MIGA). Indeed, the designation “World Bank” has never been formally adopted; instead it is the result of evolving usage and is most often limited to the IBRD plus IDA.   

With specific reference to IBRD’s Articles of Agreement, its purpose is to —

 (i)   …assist in the reconstruction and development of territories of members by facilitating the investment of capital for productive purposes….

(ii)   …promote private foreign investment by means of guarantees or participations in loans and other investmentsand…supplement private investment…for productive purposes out of its own capital, funds raised by it and…other resources. 

(iii) …encourage[e] international investment in the productive resources of members, thereby assisting in raising productivity, the standard of living and conditions of labor in their territories. 

(iv) …arrange…loans made or guaranteed by it…so that the more useful and urgent projects, large and small alike, will be dealt with first. 

(v) …conduct its operations with due regard to the effect of international investment on business conditions in the territories of members assist in bringing about a smooth transition from a wartime to a peacetime economy. 

It is clear that almost all of the early advocates of the proposed international investment bank viewed reconstruction – the “R” in IBRD — as the “more useful and urgent” and, therefore, that it should “be dealt with first. Development was clearly intended to take a back seat during the years immediately following World War II, much to the dismay of the Latin American counties. But it is important to remember, as was discussed in The More Things Change: Development’s Colonial Heritage, that “development” was understood to mean improvement of the infrastructure required for efficient extraction of raw materials rather than today’s emphasis on macro-economic growth and the reduction of poverty.

Powers of the World Bank.  The IBRD was invested with nothing like the expansive powers assigned to the IMF. IBRD’s Articles include no provisions analogous to the IMF’s powers to “oversee the international monetary system or to “exercise firm surveillance” over the economic policies or investment decisions of its member-states. Nor is it suggested anywhere that economic policy or investment decisions not financed by the Bank are subject to approval by it. Nor are there any Articles specifying the “General Obligations of Members,” restrictions on the relations between member and non-member states, or compulsory withdrawal (with the exception that if a member-state of the World Bank ceases to be a member of the IMF, its membership in the Bank automatically ceases after three months). Although the Bank may “suspend” a member, it does not have the IMF’s power to expel. Thus, a member of the Bank may be expelled only if that action is taken by the IMF. And finally, while the IMF was clearly empowered to interfere in the financial and economic policies of its member-states, the Bank was explicitly prohibited from doing so:

The Bank and its officers shall not interfere in the political affairs of any member; nor shall they be influenced in their decisions by the political character of the member or members concerned.

Only economic considerations shall be relevant to their decisions, and these considerations shall be weighed impartially in order to achieve the purposes stated in Article I” [Article IV]. 

The closest the IBRD’s Articles come to providing authority to intervene in the domestic affairs of member states is the provision that –

the Bank shall make arrangements to ensure that the proceeds of any loan are used only for the purposes for which the loan was granted, with due attention to considerations of economy and efficiency and without regard to political or other non-economic influences or considerations [Article III]. 

That provision to “make arrangements to ensure…” has been interpreted to allow continuing “supervision” of activities financed by its loans. And that has ultimately served as an effective instrument for the World Bank’s direct involvement in the economic policy and investment decisions of its member-states. 

Financing IBRD.  The primary difference between the manner in which the IMF and IBRD are financed is that the Bank’s member-states are not required to pay-in the full amount of their capital subscriptions. Rather, the overwhelming bulk of IBRD’s resources come from its borrowing in private sector financial markets, the collateral for which are the guarantees represented by the unpaid capital subscriptions of its member-states.

Summary Conclusion

The first IMF and IBRD loans were made to France one day apart on May 8th and May 9th 1947 respectively. The transition by IBRD from a primary focus on “reconstruction” to “development” and subsequent redefinition of “development” is discussed in several forthcoming blog posts. Suffice it to state here that today’s world is substantially different than it was when the World War II allies gave birth to the IMF and IBRD in 1944. Clearly, the Articles of Agreement of both organizations have been sufficiently flexible to allow for the many adaptations deemed necessary over the last half-century. But the core institutional architecture created those many years ago still dominates the process through which international development assistance is provided today.     

­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­_________________________________

NOTE:

[1]  The IMF’s Articles of Agreement have been amended only four times since first adopted at the United Nations Monetary and Financial Conference (Bretton Woods, New Hampshire) on July 22, 1944 while IBRD’s Articles, also adopted on the same date at the same Conference, have been amended only twice. The IMF’s amendments are: (1) effective July 28, 1969 to introduce Special Drawing Rights (SDRs) as the Fund’s unit of account of the Fund; (2) effective April 1, 1978 that completely rewrote Article IV to promote a “stable system of exchange rates” through “firm surveillance” by the IMF over each member’s exchange rate policies; (3) effective November 11, 1992  to suspension of voting and other membership rights for members that do not fulfill financial obligations to IMF; and (4) effective August 10, 2009 to expand the Investment Authority of the International Monetary Fund to allow all members to receive an equitable share of cumulative SDR allocations. See IMF Chronology: IMF Evolves in Response to Over Half a Century Of Challenge and Change available at http://www.imf.org/external/pubs/ft/survey/sup0998/14.htm and, for the first two amendments, James Boughton, Silent Revolution: The International Monetary Fund 1979–1989 (Washington, DC: The International Monetary Fund, 2001) available at http://www.imf.org/external/pubs/ft/history/2001/front.pdf. IBRD’s amendments are: (1) effective December 17, 1965 to allow loans from IBRD to the IFC in support of IFC’s own lending program loans and (2) effective February 16, 1989 to change the percentage of votes required to settle a disagreement between the Bank and any of its members from 85% to 80. For 1965 amendment to Article IV, see http://web.worldbank.org/WBSITE/EXTERNAL/EXTABOUTUS/0,,contentMDK:20049603~pagePK:43912~menuPK:58863~piPK:36602,00.html and for 1989 amendment to Article IX  http://go.worldbank.org/XKTZCBVRE0

[2]  George Woodbridge et al, UNRRA: The History of the United Nations Relief and Rehabilitation Administration, 3 volumes (New York: Columbia University Press, 1950).

[3]  The requirements for the official establishment of the two organizations were different. In the case of the IMF, 80% of Quotas assigned to the initial group of forty-five countries expected to join were required to be subscribed (including an 18% share to the Soviet Union that, in the event, did not join). That was not expected to be a problem since the Quotas assigned to the United States and United Kingdom alone equaled 58% of the total required (39% and 18.5% respectively). For IBRD, the signature of countries holding only 65% of assigned Shares was required. And again, the United States and United Kingdom alone were together assigned 49% of those required shares.

[4]  See Tamir Agmon and Robert Hawkins (eds), The Future of the International Monetary System (Lexington, Kentucky: Lexington Books, 1984) and Robert Hormats, Reforming the International Monetary System: From Roosevelt to Reagan (New York: Foreign Policy Association, 1987).

Keywords:  Allies, Axis, Bretton Woods Conference, British Commonwealth, China, Conference on International Organization, Czechoslovakia, Declaration by the United Nations, development, France, Franklin Roosevelt, Free French, GATT, General Agreement on Tariffs and Trade, Germany, Greece, IBRD, ICSID, IDA, IFC, IMF, IMF Quotas, International Bank for Reconstruction and Development, International Centre for the Settlement of Investment Disputes, International Development Association, International Finance Corporation, International Monetary Fund, Italy, Japan, Lend-Lease, Marshall Plan, MIGA, Multilateral Investment Guarantee Agency, Poland, reconstruction, San Francisco Conference, Second World War, sovereign-states, Soviet Union, Ukrainian SSR, United Kingdom, United Nations, United Nations Relief and Rehabilitation Administration, UNRRA, United States, USSR, World Bank, World Bank Shares, World Trade Organization, World War II, WTO, Yugoslavia.


FROM COLONIAL ADMINISTRATION TO DEVELOPMENT FINANCE

February 15, 2011

Insanity is doing the same thing over and over and expecting different results.                               Albert Einstein (1879-1955)

Papua New Guinea: Where are the Americans? (A Personal Reminiscence)1

It was sometime in 1980 and I was making my first trip to Papua New Guinea (“Papuaniugini” or PNG), a country that only five years before had achieved independent sovereign-state status from Australia. My purpose was to scout marketing opportunities for my employer, an American consulting firm providing technical assistance services primarily to the United States Agency for International Development (USAID). It was my hope that a former Ph.D. student of mine teaching political science at the University of Papua New Guinea would introduce me to key PNG Government decision-makers responsible for designing and implementing decentralized rural development efforts.

Up to this time, my career had been largely limited to service in or on behalf of USAID and I was struck by the absence of a USAID mission in PNG. Instead, the Australians completely dominated international development assistance there. As I subsequently learned, Australia’s overwhelming dominance in post-independence PNG followed a pattern set by European colonial powers following the transition of their colonies to sovereign-state independence beginning in the 1960s.

PNG’s entire territory had been administered as a single “integrated” colonial entity for only thirty years before independence as different regions were colonized at different times by different colonial powers. In 1883, the Australian territory of Queensland annexed southeastern New Guinea and that territory plus various offshore islands became a British Protectorate the following year. That same year Germany annexed northeastern New Guinea and various other off-shore islands. In 1906, the United Kingdom transferred colonial responsibility to Australia for the southeastern section. In 1914, Australia invaded and occupied the northeastern section administered by its World War I enemy Germany. Australian administrative responsibility for those segments of today’s PNG was affirmed by the League of Nations in 1920. Japan invaded and occupied most of New Guinea and several of the outer islands in 1942, but Allied forces reoccupied those territories during the waning years of World War II, Australia’s jurisdiction was re-established, and the United Nations reaffirmed its authority in 1947. Two years later the two Territories of Papua and New Guinea were merged administratively, followed by self-governing status as the single entity of Papua New Guinea in 1973. And full independent sovereign-state status was achieved only two years later.2 Indeed, Australia established the Australian Development Assistance Agency (ADAA) in 1974, the first of three predecessors to today’s Australian Agency for International Development (AusAID),3 in anticipation of PNG’s scheduled independence the following year.

Australia’s initial focus on PNG was emblematic of the priority given to former colonies by the British, French, and Belgians before them. Thus, despite a more than five-fold increase of total Australian foreign aid worldwide between 1975 and 2003 and its role as the largest bi-lateral donor in Southeast Asia, PNG remained the primary beneficiary of Australian aid until the early 1990s. Indeed, PNG accounted for a third of all AusAID assistance worldwide between 1995 and 1999 and a significant sixteen percent as recently as 2003. And although PNG’s share of Australia’s expanding bi-lateral aid budget has decreased significantly, the real value has remained fairly constant and still accounted for eighty-five percent of total bi-lateral aid received by that country as recently as 2003.4  Even today, USAID’s assistance to PNG is limited to assisting that Government to —

improve…the capacity, quality, and effectiveness of programs…[to] prevent.., care, support, and treat…at-risk populations and people living with HIV/AIDS

plus access of that country to a regional Responsible Asia Forestry and Trade (RAFT) program.5   

Overview: Distribution of Bi-Lateral Aid

With sixteen bi-lateral development assistance agencies each providing $1 billion or more during 2004,6 it is easy to forget that only a very small number of development assistance agencies existed before January 1, 1960. At the beginning of that decolonization decade, only four multi-purpose multi-lateral agencies had been established7 while the United States was the only country with an established bi-lateral aid agency.8 That changed dramatically after the 1960s as former colonial powers, Japan, and the Scandinavian countries also established significant aid programs. But among those various bi-lateral aid programs, those of the most significant former colonial powers were marked by the connections between them and their respective dependent territories. Perhaps more significantly, as late as 2004 a full twenty-three countries received more than a third of their bi-lateral official development assistance (ODA) from the country that had previously exercised sovereign authority in their territories and, of that number, thirteen had received more than half from such sources.9 Although the United Kingdom and France accounted for fifty-nine percent of all dependent territories between 1949-60, the transition from colonial administration to bi-lateral aid by Belgium, The Netherlands, and Portugal is also instructive.

United Kingdom

The United Kingdom was clearly the “big elephant” among colonial powers. Indeed, more than a quarter (28%) of today’s United Nations’ member-states were at one time or another British colonies or protectorates, accounting for a third of all colonies world-wide.10 Included among those former dependencies were some of the largest: India, Bangladesh, Nigeria, and Pakistan. The transition from that vast colonial empire to today’s Commonwealth of Nations began in 1867 when Canada was the first colony to achieve self-governing “Dominion” status. But it was another thirty-four years before Australia too achieved that status in 1901; followed by New Zealand (1907), South Africa (1910) and the Irish Free State (1922). The British Commonwealth of Nations was established as an association of autonomous Dominions “united by common allegiance to the Crown” by the Statute of Westminster in 1931.11 But as discussed in “The More Things Change: Development’s Colonial Heritage” (posted January 10, 2011), the British were not committed to granting independence during the years immediately following the end of that war. Instead, they established the Colonial Development Corporation in 1948 to finance projects for “developing resources of colonial territories.”12

But by the 1960s half of all British colonies existing at the end of World War II (34) gained their independence; requiring a transition from former colonial to post-colonial development policies and organizations.

Responding to the Government’s assertion in a 1960 White Paper that:

the best way to lift poorer nations out of poverty is through economic development…,

a Department of Technical Cooperation was established in 1961 –

to deal with the technical side of the aid programme…. [by] bring[ing] together the expertise on colonial development previously spread across several government departments [emphasis added].13

Two years later, the Colonial Development Corporation was transformed into the Commonwealth Development Corporation (thus retaining the same initials)14 and the functions of the Colonial Office were split between the Ministry of External Affairs and an entirely new Ministry of Overseas Development (ODM) in 1964.15

But whatever the sequential reorganizations of the United Kingdom’s international development program and the claim One year later, the Government issued its first post-colonial White Paper on “development” asserting that it had a — 

moral duty for development and development is in the nation’s long-term interest,16

But as argued by a senior staff of the United Kingdom’s Department for International Development (DFID), the policy set forth in that White Paper: 

did not make an entirely clean break with the past…. Not only were many of the ODM staff former colonial civil servants, the Overseas Development and Service Act was perceived and drafted as the latest in a long line of Colonial Development and Welfare Acts…. Right up to the present time, a prevailing self-image of ODA has been a Whitehall Department with special skills and responsibilities connected with working overseas to promote the development of former colonies or the welfare of their people [emphasis added].17

The transfer of many Colonial Office staff from both headquarters and the colonies to the new Ministry of Overseas Development in 1964 reinforced that evolutionary approach to relations with former colonies. Indeed, a former Governor of Colonial Kenya served as Chairman of the Colonial Development Corporation as it was transformed into the Commonwealth Development Corporation. And although it is not possible to precisely determine the exact numbers or percentages, anecdotal evidence suggests that the bi-lateral aid agencies subsequently established by Australia, France, Belgium, and The Netherlands were also largely staffed by former colonial administration officials. The United Kingdom’s direct bi-lateral aid was also heavily skewed toward former British dependencies, accounting for more than eighty percent of the United Kingdom’s total world-wide bi-lateral aid between 1965 and 1984. Former British colonies still received more than sixty percent of British aid throughout the 1990s. Similar patterns hold for France and Belgium and, to a lesser extent, The Netherlands and Portugal.

France 

France first transitioned from its policy of imposing self-financing on its colonies to a new policy of providing “development” investment by establishing an Investment Fund for Economic and Social Development (FIDES) in 1946. The establishment of FIDES was a dramatic shift from France’s pre-World War II colonial policies.18 Nonetheless, FIDES’ objective was still premised on the continuation of the French Empire. However, with French colonies beginning to achieve independence in 1960, FIDES was replaced in 1963 by a Ministry of Cooperation with responsibility for providing grant assistance to Africa and a Department of Cooperation to provide concessional credits to selected developing countries worldwide. But even more important was the establishment of the African Financial Community (the “Franc Zone” or “CFA”) on December 26, 1945 only months after the end of World War II.

The CFA manifests itself in both currency19 and organizational forms. Organizationally, it consists of seven former colonies in the West African Economic and Monetary Union (WAEMU) and another six former French colonies plus the former Spanish colony of Equatorial Guinea in the Central Africa Economic and Monetary Community (CEMAC); each of which share a Central Bank. France was represented directly in both Central Banks and guaranteed a fixed exchange rate between the CFA and the French Franc until the mid-1990s. That meant that decisions to devalue the CFA required the agreement of France; an issue that became a source of tension between France and both the World Bank and IMF during the 1980s and early 1990s. Nevertheless, following the major devaluation of the CFA on January 12, 1994, France’s role shifted to ensuring unlimited convertibility of the CFA pegged, since January 1, 1999, to the Euro. In exchange, the CFA central banks are required to maintain at least sixty-five percent of their foreign exchange reserves in operating accounts within the French Treasury.20

The distribution of post-independence French bi-lateral aid reflects its attempt to preserve its pre-eminent role as the primary source of international development assistance to its former colonies; especially in Africa.21 French Government ministers did not hesitant to remind World Bank managers and staff that the countries of the CFA Franc Zone were “an important dossier” of France.22 The importance of that commitment was clearly demonstrated when France effectively assumed responsibility for financing the re-payment of the CFA’s member-countries’ debt to the World Bank, IMF, and other multilateral organizations as their economies declined during the 1980s23 and the fact that more than sixty percent of France’s world-wide bi-lateral assistance was provided to former French dependencies between 1965 and 1999. The share received by the thirteen former French colonies of the CFA Zone, representing fifty-four percent of France’s former colonies, received sixty-three percent. But more importantly, thirteen of the fourteen CFA Zone countries received more than thirty percent of their bi-lateral financial assistance from France; and eight of them received more than fifty percent. Only six of France’s former dependencies (25%) received less than thirty percent of their total bi-lateral financing from France between 1960 and 1999 and, of those, Cambodia, Laos, and Viet Nam (50%) had been “inherited” by the United States – at least until 1975 followed by the early 1990s by the World Bank.

Belgium

All three of Belgium’s former colonies are located in Africa and achieved independence between 1960 and 1962. Belgian aid has also conformed to the pattern established by the United Kingdom and France. During the period from 1960 to 1994, Belgian aid to its three former colonies averaged forty percent of Belgium’s worldwide total. More important, between 1960 and 1974, Belgium accounted for sixty-three percent of all bi-lateral financing received by Rwanda and for sixty-six and fifty-nine percent received by the former Zaire and Burundi respectively through 1979. However, it is also important to note that from 1995 to 1999, the total amount of Belgium’s worldwide bi-lateral assistance directed to its three former colonies dropped to only ten percent.

The Netherlands

Only two Dutch colonies have achieved independent sovereign-states status; Indonesia in 1949 and Suriname in 1975. Indonesia incorporated Western New Guinea in 1969. Most of the remaining Dutch overseas dependencies are small islands in the Caribbean and have the legal status of internal Departments of the Netherlands itself. The pattern of Dutch bi-lateral assistance to Suriname and Indonesia both conforms to and contradicts the British, French, and Belgian pattern summarized above. The Netherlands never accounted for more than fifteen percent of total bilateral assistance to Indonesia and dropped to five percent or less from 1965 to 1969 and again from 1990 to 1999. However, the pattern of Dutch assistance to Suriname conforms to the more usual pattern; as that country has relied almost exclusively on The Netherlands for bi-lateral aid since independence in 1975. The Dutch share of assistance to Suriname ranged between eighty-six and ninety-eight percent through 1999. But with the exception of the period prior to 1965 and again from 1970 to 1974, less than twenty percent of total Dutch bi-lateral aid has been allocated to its two former colonies. That low share of total Dutch aid is due primarily to that country’s substantially increased global aid budget between the early 1960s through the 1990s; from the equivalent of $250 million to $24 billion in constant 2010 dollars.

Portugal

Portugal emerged as a powerful colonial power during the fifteenth century; maintaining that position for almost 300 years until defeated in a series of wars with the Dutch, British, and French. By the middle of the twentieth century, Portugal retained colonial authority in only seven overseas territories. Among those territories, Goa and Macau were peacefully transferred to India and China respectively. Indonesia invaded Timor-Leste and asserted its sovereignty over that Portuguese territory in 1975. Portugal never officially recognized that act, and Timor Leste was able to wrest its own sovereignty from the Indonesians in October 1999 during a period of political instability in Jakarta. The other five former Portuguese territories — Angola, Cape Verde, Guinea-Bissau, Mozambique, and Sao Tome and Principe — all achieved independence during 1974 and 1975 when Portugal abruptly withdrew in response to its own domestic revolution at home. That revolution led to Portugal’s withdrawal from the OECD/DAC in 1974, requesting that it be included in the list of DAC eligible recipient countries. Portugal rejoined the OECD/DAC in 1991 and, therefore, data on the allocation of its bi-lateral aid is only available from that date forward. The pattern of its assistance conforms to that of The United Kingdom, France, and Belgium. Portuguese assistance to its five former independent territories during the last decade accounted for a full sixty-one percent of its total worldwide bi-lateral assistance. More important, Portugal alone accounted for more than half of the bi-lateral aid received by Timor Leste and Sao Tome and Principe during the 1990s, while Guinea-Bissau and Cape Verde depended on Portugal for thirty and twenty-five percent of such financing respectively. Nonetheless, it now appears likely that Brazil will exceed Portugal’s level of aid to Angola, Cape Verde, Mozambique, and Sao Tome and Principe, suggesting that some aid flows are determined by shared language.

The United States of America

The United States is not easily classified with respect to the discussion here.24 Technically, it has exercised colonial authority over only eight territories not located in North America: Cuba, Guam, Hawaii, the Marshall Islands, Palau, The Philippines, Puerto Rico, and American Samoa.25 However, fifty percent of those territories were administered for fifty years or less while Hawaii was incorporated as the 50th State in 1959. Today, only Guam (1898), Puerto Rico (1898), American Samoa (1899) and the United States Virgin Islands (1917) remain as American dependencies. However, the United States also intermittently exercised administrative responsibilities in Mexico and several Central American and Caribbean states during the nineteenth and twentieth centuries and more recently in Iraq from mid-2003 through much of 2004. Notwithstanding such engagements, neither formal nor de facto “dependencies” have received significant amounts of United State’s bi-lateral assistance; although nine of them received more than thirty percent of their total bi-lateral assistance from the United States in 2004.26 Finally, given American foreign policy objectives during the post-WWII Cold War period, it has exercised an important role in support of its political and economic objectives in such countries as Korea, Viet Nam, the Middle East, The Persian Gulf, and The Balkans.  That expansive involvement in the global political and economic arena, combined with an increasingly reduced foreign aid budget, has resulted in the absence of any priority extended to its own former colonies.

Summary Conclusion

The notion that aid flows are determined by the need of potential recipients, the quality of project or program proposals, and adherence to sound economic policies without political considerations is belied by the patterns of bi-lateral development assistance summarized above. The pattern of United States’ bi-lateral aid is not influenced by its colonial legacy to the extent of the United Kingdom, France, and Belgium. However, its status as a superpower and current focus on aggressively defending against international terrorist threats strongly influences the allocation of its development assistance. This will be discussed further in the forthcoming blog post “From ‘Reconstruction’ to ‘Development’” available at www.internationaldevelopmentshould.com no later than March 8, 2011.

­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­_________________________________

NOTE:

  [1]    All “Personal Reminiscence” posts are stories told about one or more of my own personal experiences as I remember it. They are true to the best of my ability to recollect them and reflect my view of how they illustrate “lessons learned” from that experience even if one or another aspect of the story as told might not be completely correct in each and every detail. Further, I have done my best to disguise the identity of other persons referred to in these stories, including not using their true names unless references to their presence at that time or circumstance has already been published by others in other media.

  [2]   See Diane Conyers and R. Westcott, Regionalism in Papua New Guinea, Administration for Development 13 (1979) and Roger Berry and Richard Jackson, Interprovincial Inequalities and Decentralization in Papua New Guinea, Third World Planning Review 3 (1981).

  [3]    The Australian Government officially traces its bi-lateral aid program back to resources transferred to the various regions of PNG beginning in 1946, although those transfers were managed by several different Australian Government departments. In any event, the Australian Development Assistance Agency (ADAA) was followed by the Australian Development Assistance Bureau (ADAB) within the Ministry of Foreign Affairs two years later, the Australian International Development Assistance Bureau (AIDAB) in 1987, and finally AusAID in 1995. See Australian Agency for International Development, Brief History of AusAid available at http://www.ausaid.gov.au/about/history.cfm.

  [4]    The remaining 3.5% of development assistance to PNG during 1980 was provided by Germany, Japan, and The Netherlands. Statistics reported throughout this story for Australia’s direct bi-lateral development assistance to PNG and world-wide, as well as the data about aid received by PNG from Australia and all OECD sources were calculated by Jerry Mark Silverman from data provided by the Organisation for Economic Co-operation and Development (OECD), Development Assistance Committee (DAC), International Development Statistics (IDS) online: Databases on aid and other resource flows available at www.oecd.org/dac/stats/idsonline.

  [5]   United States Agency for International Development (USAID), Papua New Guinea, USAID Asia available at http://www.usaid.gov/rdma/countries/png.html .

  [6]       The sixteen bi-lateral ESA’s providing $1 billion or more during 2004 were, in rank order: USA ($19.0); Japan ($8.7); France ($8.5); UK ($7.8); Germany ($7.5); The Netherlands ($4.2); Sweden ($2.7); Spain ($2.6); Canada ($2.5); Italy ($2.5); Norway ($2.2); Denmark ($2.1); Australia ($1.5); Belgium ($1.5); Switzerland ($1.4); and Portugal ($1.0). See Larry Nowels, Foreign Aid: Understanding Data Used to Compare Donors, CRS Report for Congress (Washington, DC: Congressional Research Service, UNT Digital Library, May 23, 2005) available at http://digital.library.unt.edu/ark:/67531/metacrs7336/m1/. Excluding the more than fifty percent of USA economic assistance provided for Iraqi Reconstruction ($8.1 billion), Egypt ($663 million), and Israel ($555 million) alone, the United States still ranked first in total amount of economic assistance ($9.6 billion). The UK’s economic support of “reconstruction” in Iraq during 2004 accounted for about four percent of that country’s worldwide economic assistance. See Organisation for Economic Co-operation and Development, Development Assistance Committee, International Development Statistics (IDS) online: Databases on aid and other resource flows; available at www.oecd.org/dac/ stats/idsonline.

  [7]    The four multi-lateral agencies with a world-wide and multi-sectoral mandate established prior to January 1, 1960 were: (i) the International Bank for Reconstruction and Development (IBRD, 1946); (ii) the United Nations’ Expanded Program of Technical Assistance (EFTA; 1949) and (iii) the United Nations Special Fund (1958) to complement and expand on the work of EFTA (both replaced by the United Nations Development Programme in 1965); and (iv) the European Economic Community’s European Development Fund for Overseas Countries & Territories (1957). The Inter-American Development Bank was the only one of the nine regional development banks already established as of January 1, 1960. Further, only nine of more than 50 other multi-lateral agencies had yet been established.

  [8]    With the end of the Marshall Plan in 1952, the European Cooperation Administration (ECA) was succeeded by two different American agencies. The Department of State’s Technical Cooperation Administration (TCA) was responsible for assisting non-European “poor” countries while responsibility for all other non-military foreign aid was assigned to a new self-standing Mutual Security Agency (MSA). “Food for Peace” was inaugurated in 1954 and integrated, along with all other American non-military foreign aid programs, into the new International Cooperation Agency (ICA) that, in turn, became the United States Agency for International Development in 1961. See United States, Agency for International Development, About USAID (January 7, 2005) available at http://www.usaid.gov/about_usaid/usaidhist.html.

  [9]    All of the statistical data presented below with respect to British, French, Belgian, Dutch, and Portuguese bi-lateral aid flows was calculated by Jerry Mark Silverman from data provided by the Organisation for Economic Co-operation and Development, Development Assistance Committee International Development Statistics (IDS) online: Databases on aid and other resource flows; available at www.oecd.org/dac/ stats/idsonline.

[10]   We count 68 sovereign-states as former dependencies of the United Kingdom here. Technically, however, a complete number would be 69.5 current states because the territories of three of today’s sovereign-states (Cameroon, Somalia, and Yemen) were divided between the United Kingdom and one or another colonial power.

[11]      The Commonwealth of Nations has provided a framework for relationships between the United Kingdom and its former colonies since 1931, but membership accelerated in the early 1960s. Membership in the Commonwealth is strictly voluntary and decisions are not binding on members. Today’s 54 members are all former British colonies except for Mozambique and Rwanda; former Portuguese and Belgian colonies respectively; see Commonwealth Secretariat, History available at http://www.thecommonwealth.org/Internal/191086/34493/history/ and Member States available at http://www.thecommonwealth.org/Internal/191086/142227/members/.

[12]    It is also interesting to note that on January 1, 1950 the British “discontinued” negotiations with the World Bank for loan of approximately $5 million (equivalent to 2010’s $45.75 million) to the United Kingdoms’s Colonial Development Corporation because the CDC “was unable to accept certain of the Bank’s requirements, especially the non-financial covenants,” that would impinge on its colonial prerogatives. See World Bank, World Bank Group Historical Chronology: 1950-1951 (Washington, DC: World Bank, 1949) available at http://go.worldbank.org/0K2T0GA1I0.

[13]   United Kingdom, Department for International Development, History, About DFID available at www.dfid.gov.uk/About-DFID/History1/

[14]    United Kingdom, Competition Commission, Commonwealth Development Corporation: A Report on the Efficiency and Costs of, and the Service Provided by, The Commonwealth Development Corporation (1992) available at http://www.competition-commission.org.uk/rep_pub/reports/1992/320commonwealth.htm#full .

[15]    The Ministry of Overseas Development (ODM) was the United Kingdom’s first bi-lateral aid agency. But that function was downgraded from ministerial to agency status when the Overseas Development Agency (ODA) succeeded ODM in 1979 until that status was upgraded again with the establishment of the Cabinet level Department for International Development (DFID) in 1997; see United Kingdom, Department for International Development, History, About DFID available at www.dfid.gov.uk/About-DFID/History1/.

[16]    Rosalind Eyben, Globalisation: Implications for How We Work, presentation within the United Kingdom’s Department for International Development in London on May 30, 1997.       

[17]      Ibid.

[18]   See Richard Fanthorpe, Fonds d’Investissement pour le Développement Economique et Social (FIDES) in Kevin Shillington (ed.), Encyclopedia of African History, Volume 1 (London: Routledge Taylor & Francis Group, 2004), p. 905-909 available at http://books.google.com/books?id=Ftz_gtO-pngC&pg=PA905&lpg=PA905&dq=french+Investment+Fund+for+Economic+and+Social+Development+fides&source=bl&ots=IuDIvkkzlU&sig=bu_yS2n6AejZ0J7LW97_YITE-5s&hl=en&ei=zp1ZTabBDIeWtweCs_23DQ&sa=X&oi=book_result&ct=result&resnum=1&ved=0CBMQ6AEwAA#v=snippet&q=fides&f=false.

[19]   As currency, the CFA was first established as the “Franc of the French ‘Colonies’ of Africa” on the same day that France ratified the charters of the World Bank and IMF. Anticipating de-colonization in 1958, the CFA became the “Franc of the French ‘Community’ of Africa,” even as it also retained its earlier initials. One year later, separate monetary unions were established for West and Central Africa and the common initials since then denote two different currencies: the “Franc of the African Financial Community” in West Africa and the “Franc of Financial Cooperation” in Central Africa; see Banque de France, What is Franc Area? (November 26, 2004) and La Banque Centrale des États de l’Afrique de l’Ouest,  History of the CFA Franc (no date).

[20]   Ibid.

[21]   Devesh Kapur, John Lewis, and Richard Webb, The World Bank: Its First Half Century, Volume 1 (Washington, DC: Brookings Institution Press, 1997), p. 769 recommend Guy Martin, “Continuity and Change in Franco-African Relations,” Journal of Modern African Studies, 33 (March 1995), p 1-20 as a good summary of the extensive literature devoted to analyses of French political and economic power in Africa. 

[22]    As only one example of the French Government’s assertion of primary influence within the CFA zone, see Memorandum, Jean-Louis Sarbib to Edward Jaycox, through Edward Lim, “Meeting between Mr. Qureshi and the French Minister of Cooperation,” August 23, 1991; cited in Devesh Kapur, John Lewis, and Richard Webb, The World Bank: Its First Half Century, Volume 1 (Washington, DC: Brookings Institution Press, 1997), p. 776.

[23]    Devesh Kapur, John Lewis, and Richard Webb, The World Bank: Its First Half Century, Volume 1 (Washington, DC: Brookings Institution Press, 1997), p. 76, 776, 1072.

[24]   Total United States’ development assistance to non-European areas between 1946-61 amounted to $26.9 billion – almost equal to the $28.3 billion provided to Europe during that period; United States, Agency for International Development, About USAID (January 7, 2005) available at http://www.usaid.gov/about_usaid/usaidhist.html.

[25]    Of the eight United States’ colonial territories, Cuba was administered directly for only four years (1898-1902) and The Philippines for 49 years (1898-1946) following several centuries of Spanish rule. The Marshall Islands was under American authority for 43 years (1943-1985) following colonization by Germany in 1885 and administration by Japan between 1914 and 1943. Palau was administered by the United States for fifty years (1944-1994) following 300 years under Spanish (c. 1600-1899), German (1899-1914), and Japanese (1914-1944) colonial rule. The Hawaiian Islands were incorporated as the 50th State of the United States by the popular vote of its residents in 1959 following 61 years of colonial administration (since 1898). American Samoa (1899), Guam (1898) and Puerto Rico (1898) remain dependencies of the United States today.

[26]      As classified and calculated by Jerry Mark Silverman, the ten “de facto dependencies’ that received more than thirty percent of their total bi-lateral assistance from the USA during 2004 were: the Dominican Republic (35%), Guatemala (40%); El Salvador (46%); Panama (57%); Haiti (59%); Liberia (60%); Palau (67%); Marshall Islands (90%); and The Federated States of Micronesia (92%). As calculated by the Author from data provided by the Organisation for Economic Co-operation and Development (OECD), Development Assistance Committee (DAC), International Development Statistics (IDS) online: Databases on aid and other resource flows available at www.oecd.org/dac/stats/idsonline and United States, Agency for International Development (USAID), U.S. Overseas Loans and Grants: Obligations and Loan Authorizations July 1, 1945 – September 30, 2003 available at http://pdf.usaid.gov/pdf_docs/PNADH500.pdf.

Keywords:  ADAA, ADAB, Africa, African Financial Community, AIDAB, American Samoa, Angola, AusAID, Australia, Australian Agency for International Development, Australian Development Assistance Agency, Australian Development Assistance Bureau, Australian International Development Assistance Bureau, Balkans, Bangladesh, Belgium, bi-lateral aid, bi-lateral donor, Brazil,British Commonwealth of Nations, British Empire, British Protectorate, Burundi, Cambodia, Cameroon, Canada, Cape Verde, Caribbean, CEMAC, Central Africa Economic and Monetary Community, Central America, CFA, China, Colonial Development and Welfare Acts, Colonial Development Corporation, Colonial Office, colonies, Commonwealth Development Corporation, Commonwealth of Nations, Commonwealth Secretariat, Cuba, DAC, Denmark, Department of Cooperation, Department of Technical Cooperation, Development Assistance Committee, development assistance, DFID, Dominican Republic, Dominion, ECA, EFTA, Egypt, El Salvador, Equatorial Guinea, Euro, European Cooperation Administration, European Economic Community’s European Development Fund for Overseas Countries and Territories, Federated States of Micronesia, FIDES, First World War, Fonds d’Investissement pour le Développement Economique et Social, Food for Peace, Franc Zone, France, French Empire, French Franc, Germany, Goa, Guam, Guatemala, Guinea-Bissau, Haiti, Hawaii, IADB, IBRD, ICA, IMF, India, Indonesia, Inter-American Development Bank, International Bank for Reconstruction and Development, International Cooperation Agency, International Monetary Fund, Investment Fund for Economic and Social Development, Iraq, Irish Free State, Israel, Italy, Japan, Kenya, Korea, Laos, League of Nations, Liberia, Macau, Marshall Islands, Marshall Plan, Mexico, Middle East, Ministry of Cooperation, Ministry of External Affairs, Ministry of Overseas Development, Mozambique, MSA, Mutual Security Agency, Netherlands, New Guinea, New Zealand, Nigeria, Norway, ODA, ODM, OECD, official development assistance, Organisation for Economic Co-operation and Development, Overseas Development and Service Act, Pakistan, Palau, Panama, Papua New Guinea, Papua, Papuaniugini, Persian Gulf, Philippines, PNG, Portugal, protectorates, Puerto Rico, Queensland, Responsible Asia Forestry and Trade (RAFT) program, Rwanda, Sao Tome and Principe, Scandinavian countries, Second World War, Somalia, South Africa, Southeast Asia, sovereign-states, Spain, Statute of Westminster, Suriname, Sweden, Switzerland, TCA, Technical Cooperation Administration, Timor-Leste, UNDP, United Kingdom Department for International Development, United Kingdom, United Kingdom, Competition Commission, United Nations Development Programme, United Nations Special Fund, United Nations, United Nations’ Expanded Program of Technical Assistance, United States Agency for International Development, United States, USAID, Viet Nam, Virgin Islands, WAEMU, West African Economic and Monetary Union, Western New Guinea, World Bank, World War I, World War II, Yemen, Zaire.


THE MORE THINGS CHANGE: DEVELOPMENT’S COLONIAL HERITAGE

January 10, 2011

Plus ça change, plus c’est la même chose (“the more things change, the more they remains the same”).                                                  Alphonse Karr (1808-1890)

Although a system may cease to exist in the legal sense or as a structure of power, its values (or anti-values), its philosophy, its teachings remain in us. They rule our thinking, our conduct, our attitude to others. The situation is a demonic paradox: we have toppled the system but we still carry its genes.                              Ryszard Kapuscinski (1932-2007)

Understanding the historical roots of basic concepts commonly used in international development assistance efforts is important because the social, economic, and political context within which they were formulated continues to affect the way we look at such things today. However, links between the many assumptions, values and institutions existing during the latter years of the colonial period and current development efforts are not often acknowledged1 and even less often understood.

This blog post is the first of three intended to identify and discuss a few of those links. It focuses on the post-World War I colonial period, including the period following World War II. The second and third posts will expand this discussion to cover the immediate post-colonial period of the 1960s and 1970s as well as provide more depth regarding how those links have affected current views of international development objectives and methods.

Assumptions & Concepts

Below I take a look at four key concepts: “sovereign-states,” “development,” “welfare,” and “reconstruction.” The first two terms “development;” and “welfare” reach back to policies and practices current before the Second World War — even as their meaning has evolved. The distinction between “reconstruction” and “development” was embedded in the name first given to the World Bank in 1944 – i.e., the International Bank for Reconstruction and Development (IBRD) – while the organizing legal principle of the “sovereign-state,” on which the entire structure of official development assistance is based, goes back to the Treaty of Westphalia of 1648.

Sovereign-States

Almost all official development assistance moves from, to, and through sovereign-state governments or multi-lateral sovereign-state membership organizations like United Nations’ agencies, The World Bank, and the International Monetary Fund (IMF). The legal recognition of that sovereign-state system 362 years ago confirmed a uniquely European process of both nation and state building already underway for several centuries. But socio-economic groups targeted for development assistance in Africa, Asia and some areas of Latin America and the Middle East have not had that same historical experience. Instead, the introduction of the sovereign-state structure during the colonial period was both foreign and abrupt.

Indeed, sovereignty contrasts sharply with pre-colonial patterns of authority in those non-European areas where political authority was attributed to emperors or other monarchs and was not based in formal legal agreements that established clearly demarcated borders within which a Monarch was recognized by other monarchs as having complete and ultimate legal authority.2 Instead, indigenous authority in many of those areas was based primarily on: (1) a chief, monarch, or other leader’s ability to enforce it; (2) mutually beneficial trading relationships among leaders or people engage in commerce; and/or (3) reinforcing culturally defined relationships.3 The European notion that a monarch was vested with independent sovereign authority within specifically geographically demarcated borders was foreign in the most fundamental sense of that term when extended to non-European areas. And that “foreigness” was compounded by the colonial variant whereby the exercise of legal authority within colonies was reserved to officials of sovereign European governments located far away. It is instructive that when we talk about the post-colonial era we refer to the transition from colonies to independent states, not independent people. As a consequence, the sovereign-state system has taken deeper root in some places than in others, resulting in ineffective and illegitimate development programs and policies in many of those countries. 

The belief that sovereign-state governments alone govern is the foundational assumption on which the entire institutional architecture for delivering official development assistance has been built. The consequences of that assumption have only recently been recognized: (i) boundaries of sovereign-states that do not often correspond to the requirements of true nation-states; (ii) development projects and programs designed and organized for sovereign-state “citizens” rather than social, economic, and political affinity groups; and (iii) fundamental disconnects between non-formal parallel governance systems and officially recognized states and governments.

Development & Welfare

Today development is most often viewed as the reduction of both income and non-income poverty – the process through which fewer and fewer people live on less than $1 or $2 a day and/or do not have affordable access to formal education and effective health services. But that has not always been the case.  Britain’s Colonial Development and Welfare Act of 1939 viewed “development” as improvement of infrastructure required for efficient extraction of raw materials.  By contrast, the term “welfare” applied to the provision of improved health, education, housing, and urban wages in the “colonies,” “protectorates” or “mandated” or “trust territories” (hereinafter synonymously “colonies” or “dependencies”).  While development was directed toward enhancing the economies of the colonial powers, welfare was directed toward elimination or reduction of labor strikes, protests, and rebellions.4 

Reconstruction

In 1944, European and Asian landscapes were littered with wreckage over which the United States stood as a largely unscathed colossus.  The USA’s gross national income (GNI) equalled 216.7 percent of France, the United Kingdom (UK), and the USSR combined; the USSR and the UK respectively owed the equivalent of $136.5 billion and $384.7 billion in current 2010 currency values; other British Commonwealth countries, China, and France had borrowed the equivalent of another $99.3 billion, and another fifty-two countries owed $49.6 billion received from the United Nations Relief and Rehabilitation Administration (UNRRA). All that debt was owed to the United States and the American Government alone held the overwhelming majority of the world’s monetary gold stocks. As a result, European currencies had lost almost all of their international value. The immediate problem for the USA, UK and France was how to continue providing large cash transfers from the Americans to its European allies while simultaneously reducing European debt. 

Until the establishment of France’s Ministry for Cooperation in 1961, the USA was the only bi-lateral “foreign aid donor.” Between 1946 and the end of 1952, the United States provided economic assistance worldwide worth approximately $231.5 billion today; of which forty-three percent went to Europe (including France as the largest borrower and Belgium, The Netherlands, Italy, Greece, and the United Kingdom).5 By contrast, World Bank lending to Europe between 1946 and 1952 was the equivalent of only $5.1 billion.6 The Bank’s first four loans were made during 1947 to France, The Netherlands, Denmark, and Luxembourg7 while its first “post-reconstruction” (i.e., “development”) loan was approved in 1948 for the purchase of reconverted warships by four Dutch shipping companies.8 By the end of the colonial era (1970), the Bank had extended loans to seventeen European countries; twenty-one percent of which was specifically for investments in eighteen Belgian, French, and UK colonial territories.9

Values & Assumptions

The focus on European reconstruction was a function of both the distribution of power and unexamined assumptions, experience, and persistent values. For Westerners without significant experience in colonial territories or newly independent countries, the projection of their own values onto unknown people should not be surprising. Westerners with actual experience among “native” peoples often explicitly rejected the non-European beliefs and values of “those” people. A communiqué sent by John Maynard Keynes to the UK Treasury during preparation for the 1944 Bretton Woods Conference convened to establish the World Bank and IMF reflects such attitudes:

Twenty-one countries have been invited which clearly have nothing to contribute and will merely encumber the ground, namely, Columbia, Costa Rica, Dominica, Ecuador, Salvador, Guatemala, Haiti, Honduras, Liberia, Nicaragua, Panama, Paraguay, Philippines, Venezuela, Peru, Uruguay, Ethiopia, Iceland, Iran, Iraq, Luxembourg. The most monstrous monkey-house assembled for years. To these might be added: Egypt, Chile and (in present circumstances) Yugo-slavia [sic].10

Various comments by delegates to the United Nations’ Trusteeship Council between 1947 and 1951 reinforce the notion that “development” was viewed as a process directed toward bringing “a Western mode of reasoning” to the people of the colonies;11 as do the references to “less highly developed regions,” “young and immature nations” or “old but underdeveloped nations.”12Nations” in that context were clearly understood to be synonymous with “states” while subsequent formulations – “newly industrializing,” “newly emerging,”  “third world,” “fourth world,” and so forth – reinforced the notion that development was essentially the same as the economic growth of sovereign-states. 

It is also important to note that America’s experience during the Great Depression prior to World War II combined with John Maynard Keynes earlier criticisms the Treaty of Versailles ending World War I13 were much in evidence when the form and functions of the World Bank and IMF were agreed at Bretton Woods. The World Bank was to lend long-term investment capital to sovereign-state governments and the IMF was to regulate currency exchange-rates and provide short-term loans to countries not able to meet occasional foreign exchange deficits. More generally, there was a prevailing belief that scientific approaches to complex planning, management, and technological issues would overcome whatever obstacles might arise. That optimism prevailed in large part because of broadly shared beliefs, values, and desires among Americans and European allies alike. At the same time, intellectual inertia appears to have carried the pre-War distinction between “development” and “welfare” forward into the post-War period. 

Colonial Development 

While European countries were themselves a major constituency of the USA and World Bank from the mid-1940s through the end of the 1950s, those same economies were also closely interwoven with their respective colonies and dependencies. The United Kingdom and France provide examples of an almost seamless organizational and staffing transition from colonial administration to direct bi-lateral international development assistance. 

United Kingdom.  Fifty-four of the United Nations’ 192 current sovereign-state members (28%) have been British colonies or protectorates at one time or another. With the exception of India from 1858 and Burma from 1937, responsibility for staffing, managing, and financing the development of British colonies was assigned to the Colonial Office.14 Although in the immediate aftermath of the Second World War the new Labour Government was officially anti-colonial, it was nevertheless faced with the need to alleviate severe shortages of food, fuel, and natural resources at home. Reflecting fears current during November 1947, the UK’s Minister for Economic Affairs Sir Stafford Cripps believed that…  

the whole future of the sterling group and its ability to survive depends in my view upon a quick and extensive development of our African resources,

even as Foreign Secretary Ernest Bevin argued that –

If only we pushed on and developed [our colonies in] Africa, we could have [the] United States dependent on us, and eating out of our hand in four or five years.15

Britain’s Cabinet Secretary summarized the apparent contradictions between the Government’s public rhetoric and actual actions in a report to the Prime Minister in 1948:

At recent meetings there has been general support for the view that the development of Africa’s economic resources should be pushed forward rapidly in order to support the political and economic position of the United Kingdom…. [The policy] could, I suppose, be said to fall within the ordinary definition of “Imperialism.” And, at the level of a political broadcast it might be represented as a policy of exploiting native peoples in order to support the standards of living of the workers in this country. This policy is doubtless inevitable – there are compelling reasons…. But if it is disclosed incautiously or incidentally, without proper justification and explanation, may it not be something of a shock to Government supporters – and indeed, to enlightened public opinion generally?It can, of course, be argued that the more rapid development of Africa’s resources will bring social and economic advantages to the native peoples in addition to buttressing the political and economic influence of the United Kingdom.16

Therefore, in 1948 Government established a Colonial Development Corporation (CDC) in parallel with the continuing responsibilities of the Colonial Office.  The CDC was tasked with achieving more rapid development in the colonies by: (i) fostering integration of the heretofore separate physical infrastructure (“development”) and assistance for human health, education, and domestic food production (“welfare”) arenas and (ii) mobilizing private investment to meet the increased costs that such integration was thought to require.17 From that point on, the term “welfare” has been implicitly subsumed within the concept of “development.”

France.  Twenty-four sovereign-state members of the United Nations (13%) are former French colonies. France’s transition from colonial authority to provider of bi-lateral finance followed a path similar to the UK’s. French colonial officials had also begun to argue for substantially increased Government funding to meet both development and welfare objectives during the 1930s. In 1945, the Government established the Economic and Social Investment Fund for the Overseas Territories (FIDES); followed the next year by inclusion of all overseas Departments, colonies, and self-governing “Associate States” within the “French Union.” That arrangement effectively replaced the formerly separate colonial administrative service. FIDES continued with responsibility for planning and financing investments, but the administrative responsibilities of the former colonial service were distributed among other ministries and agencies of the French Government.

World Bank.  By 1949, IBRD managers and staff concluded that its comparative advantage was in “development” rather than “reconstruction.” By 1960, at least fifty-two percent of its cumulative lending was for development purposes; nineteen percent of which was for investments in colonial territories.18 During the period 1953-1961, India and Japan alone received twenty-seven percent of total World Bank lending (16% and 11% respectively), South Africa received thirty-one percent of lending to Sub-Saharan Africa, and twenty percent of total lending was directed toward Latin America. The UK borrowed a total of $265 million for agriculture, energy, “land settlement,” and transport in nine colonies between 1952 and 1963.19 However, it never did borrow from IBRD for investments in its own home islands, relying instead on financing by the USA directly for that purpose.  

Lending for investments in colonial areas was anticipated in IBRD’s Articles of Agreement; i.e.

to members whose metropolitan territories have suffered great devastation from enemy occupation or hostilities… [and] shall pay special regard to lightening the financial burden and expediting the completion of restoration and reconstruction…. [while] not interfer[ing] in the political affairs of any membernor…[be] influenced in their decisions by the political character of the member or members concerned.

Colonies were not members of the Bank while four “metropolitan” powers – Belgium, France, the Netherlands, and UK — were members and, along with the USA, held sixty-two percent of voting shares within IBRD in 1947.20 In the event, ten percent of IBRD’s total 1947-60 lending commitments were allocated to project investments in European colonial territories in Africa.21

Loans for colonial “development” were attractive during the 1950s for at least two reasons: (1) outside of Latin America and the Middle East, infrastructure development project opportunities were largely limited to colonial Africa and (2) European colonial officials were most able to prepare investment plans to technical standards required by the Bank. Nonetheless, such lending also meant that European governments would benefit from those loans.  As an example, the first of those loans (to Belgium) in 1951 consisted of two component parts: (1) $40 million to the Belgian Congo Development Authority primarily for development of transport infrastructure and (2) $30 million directly to the Central Bank of Belgium to defray the indirect costs of Belgium’s own colonial expenditures.22 

The issue of World Bank lending for investments in “Dependent Overseas Territories” was raised again during discussions leading up to the establishment of the World Bank’s International Development Association (IDA) in 1960. The United Kingdom and France argued that “territories” should be eligible for IDA’s concessional finance while many of the Bank’s senior managers and advisors were opposed. The tenor of those discussions is best captured by notations in various internal memoranda by four American and two British members of the World Bank’s Loan Committee during the period 1959-1960; as follows –

Peter Cargill (UK):23      If the United Kingdom wanted to step up development in [its] colonies it could afford to do so…. 

Eugene Black (USA):        [IDA loans to colonies would result in] siphoning major portions of [its] subscriptions back to the metropolitan countries….

J. Burke Knapp (USA):           Lending by IDA to colonial territories was a very dubious proposition. The Committee expected…not to have IDA pick up the white man’s historical burden [note the use of colonial language here even by those opposed to financing  in colonial territories]. Were there not cases in which countries were sufficiently established as wards of the United States to be treated paramountly as colonies[?] If IDA financed African wards of France and the United Kingdom, it might just as well finance wards of the United States….

S. Raymond Cope (UK):           [Indeed, that should be the case with respect to such] wards of the United States, [as for example] Korea. 

Eugene Black (USA):                IDA would only be able to invest in Korea and Viet-Nam on a token basis….

Davidson Sommers (USA):     It would be helpful to the Bank and to these countries occasionally to have relations with the Bank instead of having them all with the U.S…..

Richard Demuth (USA):         Korea and China [Taiwan] should be eligible if a good project came along, butkeep the amount low.24

The ultimate decision was that both colonies and “less-developed member countries” would be eligible for IDA borrowing. Nonetheless, that decision was ultimately made moot by the rapid pace of decolonization and, therefore, no projects were actually ever financed by IDA in colonial territories.

The early post-war period had at least four lasting consequences for the structure of development assistance today. First, the creation of the United States’ Economic Cooperation Administration (ECA) to manage Marshall Plan assistance in 1949 provided a model for subsequent bi-lateral agencies established by other countries. Second, the initial seeds of subsequent European integration were planted through the establishment of the Organization for European Economic Cooperation (OEEC) as the counterpart to ECA. Third, the penchant for long-term planning was presaged by the ECA’s requirement that European recipients prepare detailed plans specifying how its financing would be used. Finally, and most importantly for our purposes here, western beliefs, values, and desires were institutionalized within the world-wide development system.

The key conceptual and structural links between the post-World War I colonial period and the decade or two following World War II provide the historical foundation for the discussion of the post-colonial period that followed. As discussed further in the next two posts of this three part series, the meaning of “development” has evolved over time. Nonetheless, both in terms of formulation and pursuit, it is clearly rooted and driven by Western notions of progress and European-centered experience.  __________________________________

NOTES:

  [1]   Although William Easterly’s book The White Man’s Burden: Why the West’s Efforts to Aid the Rest Have Done So Much Ill and So Little Good (New York, NY: Penguin Books, 2007) implies a focus on the link between colonial policies toward “development” and contemporary efforts, his narrative does not discuss the roots of specific “development” concepts and attitudes in the period under review in this series of three Blog posts. Instead, that book focuses instead on the deficiencies of expert-driven planning approaches to development at the expense of indigenous knowledge and priorities.

  [2]   James Brierly, The Law of Nations (London: Oxford University Press, 1928). 

  [3]    Jerry Mark Silverman, Historic National Rivalries and Contemporary Inter-State Conflict in Mainland Southeast Asia in M. Zacher and R. S. Milne (eds), Conflict and Stability in Southeast Asia (Garden City: Anchor Books, 1978), p. 45-78.

  [4]    Ronald Chilcote (ed.), The Political Economy of Imperialism (Lanham, Maryland: Rowman and Littlefield Publishing, 2000) and Devesh Kapur, John Lewis, and Richard Webb, The World Bank: Its First Half Century, Volume 1 (Washington, DC: Brookings Institution Press, 1997).

  [5]    Truman Library, (1993) Oral History Interview with August Maffry conducted by Richard McKinzie, Oral History Project (January 19, 1993) available at www.trumanlibrary.org/oralhist/maffrya.htm.

  [6]    International Bank for Reconstruction and Development (IBRD), Eighth Annual Report to the Board of Governors 1952-1953 (Washington, DC: International Bank for Reconstruction and Development, 1953) available at www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2000/02/28/000178830_98101911112711/Rendered/PDF/multi_page.pdf.

  [7]    International Bank for Reconstruction and Development (IBRD), Second Annual Report to the Board of Governors 1946-1947, Ended June 30, 1947.

  [8]    World Bank, World Bank Group Historical Chronology: 1944-1949 (Washington, DC: World Bank, 1949) available at http://go.worldbank.org/Z99GVEV0T0.

  [9]    International Bank for Reconstruction and Development (IBRD), Eighteenth Annual Report to the Board of Governors 1962-1963 (Washington, DC: International Bank for Reconstruction and Development, 1963) available at www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/1999/12/02/000178830_98101911111996/Rendered/PDF/multi_page.pdf and World Bank, World Bank International Development Association Annual Report 1970 (Washington, DC: The World Bank Group, 1970) available at www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/1999/12/02/000178830_98101911110773/Rendered/PDF/multi_page.pdf.

[10]    Quoted in Elizabeth Johnson and Donald Moggridge (eds), The Collected Writings of John Maynard Keynes: Volume 26, Activities 1943-46: Shaping the Post-war World: Bretton Woods and Reparation (Cambridge, UK: Cambridge University Press, 1980), p. 42; incorrectly quoted in Devesh Kapur, John Lewis, and Richard Webb, The World Bank: Its First Half Century, Volume 1 (Washington, DC: Brookings Institution Press, 1997), p. 62.

[11]    Pierre de Senarclens, How The United Nations Promotes Development Through Technical Assistance in Majid Rahnema with Victoria Bawtree (eds), The Post-Development Reader (London: Zed Books, 1997), p. 190-206.

[12]    International Bank for Reconstruction and Development (IBRD), Second Annual Report to the Board of Governors 1946-1947, Ended June 30, 1947 (Washington, DC: International Bank for Reconstruction and Development, 1947) available at www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2000/02/28/000178830_98101911112817/Rendered/PDF/multi_page.pdf.

[13]    See John Maynard Keynes, The Economic Consequences of the Peace (New York, NY: Harcourt, Brace and Howe, 1920).

 [14]  United Kingdom, Government of, Maps and Plans: Overseas Relations Overseas Records Information 6 (London, UK: The National Archives, 2003) available at www.nationalarchives.gov.uk/records/research-guides/maps-plans-overseas-relations.htm.

[15]    Devesh Kapur, John Lewis, and Richard Webb, The World Bank: Its First Half Century, Volume 1 (Washington, DC: Brookings Institution Press, 1997).

[16]    Mike Cowan, Early Years of the Colonial Development Corporation: British State Enterprise Overseas during Late Colonialism, African Affairs, 82 (1984), p. 67-68 as quoted in Devesh Kapur, John Lewis, and Richard Webb, The World Bank: Its First Half Century, Volume 1 (Washington, DC: Brookings Institution Press, 1997), p. 96.

[17]   Devesh Kapur, John Lewis, and Richard Webb, The World Bank: Its First Half Century, Volume 1 (Washington, DC: Brookings Institution Press, 1997). 

[18]   International Bank for Reconstruction and Development (IBRD), Eleventh Annual Report to the Board of Governors 1955-1956 (Washington, DC: International Bank for Reconstruction and Development, 1956) available at www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/1999/12/02/000178830_9810191111268/Rendered/PDF/multi_page.pdf; Twelfth Annual Report to the Board of Governors 1956-1957 (Washington, DC: International Bank for Reconstruction and Development, 1957) available at www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/1999/12/02/000178830_9810191111246/Rendered/PDF/multi_page.pdf; Thirteenth Annual Report to the Board of Governors 1957-1958 (Washington, DC: International Bank for Reconstruction and Development, 1958) available at www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2000/02/28/000178830_98101911111690/Rendered/PDF/multi_page.pdf; and Fourteenth Annual Report to the Board of Governors 1958-1959 (Washington, DC: International Bank for Reconstruction and Development, 1959) available at www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/1999/12/02/000178830_98101911111792/Rendered/PDF/multi_page.pdf.

[19]   International Bank for Reconstruction and Development (IBRD), Seventeenth Annual Report to the Board of Governors 1961-1962 (Washington, DC: International Bank for Reconstruction and Development, 1962) available at www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/1999/12/02/000178830_98101911111995/Rendered/PDF/multi_page.pdf

[20]   International Bank for Reconstruction and Development (IBRD), Second Annual Report to the Board of Governors 1946-1947, Ended June 30, 1947.

[21]   International Bank for Reconstruction and Development (IBRD), Eleventh Annual Report to the Board of Governors 1955-1956; Twelfth Annual Report to the Board of Governors 1956-1957 (Washington, DC: International Bank for Reconstruction and Development, 1957); Thirteenth Annual Report to the Board of Governors 1957-1958; and Fourteenth Annual Report to the Board of Governors 1958-1959 (Washington, DC: International Bank for Reconstruction and Development, 1959).

[22]   Devesh Kapur, John Lewis, and Richard Webb, The World Bank: Its First Half Century, Volume 1 (Washington, DC: Brookings Institution Press, 1997). 

[23]    Peter Cargill (UK) had, prior to joining the staff of IBRD during its early years, been an increasingly senior member of the UK’s colonial India Office. Eugene Black (USA) had served as a senior vice president of Chase National Bank since 1933 prior to being appointed as IBRD’s United States’ Executive Director in 1947 and IBRD’s third President in 1949; serving in that position until 1962. J. Burke Knapp (USA) had served as an Economist at the United States Federal Reserve Board (1940-44) and in several post-World War II positions related to international economic relations prior to joining IBRD in 1952 and eventually serving from 1956 as one of its three Vice-Presidents. S. Raymond Cope (UK) had spent most of his life in commercial banking prior to joining IBRD’s Loan Department at the end of 1947 and serving as Assistant Director of Operations for Europe, Africa, and Australasia beginning in 1952 and Director of Operations, Europe, Africa, and Australasia from June 1955. Davidson Sommers (USA) had served as an Assistant to the Secretary of War John McCloy in the Pentagon prior to joining IBRD as a lawyer in the law department in 1949 and as Vice President and General Counsel from 1956 to 1959. Richard Demuth (USA) was a lawyer in private practice and then during World War II within the United States Government prior to joining IBRD during 1947 as an Assistant to the first President of IBRD Eugene Meyer (USA) before serving as Director of its Department of Technical Assistance and Liaison from 1951 and Director of the Development Services Department and the International Relations Department from 1961 until 1973.

 [24]   Quoted in Devesh Kapur, John Lewis, and Richard Webb, The World Bank: Its First Half Century, Volume 1 (Washington, DC: Brookings Institution Press, 1997), as paraphrased and re-sequenced by Jerry Mark Silverman.

Keywords: Bretton Woods Conference, Burma, Chile, Colonial Office, Colonialism, colonies, Columbia, Costa Rica, development, Dominica, Ecuador, Egypt, El Salvador, Ethiopia, fourth world, France, Guatemala, Haiti, Honduras, Iceland, IDA, IMF, India, International Bank for Reconstruction and Development, International Development Association, International Monetary Fund, international relations, Iran, Iraq, John Maynard Keynes, Liberia, Luxembourg, Marshall Plan, newly emerging, newly industrializing, Nicaragua, Panama, Paraguay, Parallel Governance, Peru, Philippines, protectorates, reconstruction, sovereign-state, third world, trust territories, underdeveloped country, United Kingdom, United Nations Relief and Rehabilitation Administration (UNRRA), United Nations, Uruguay, Venezuela, welfare, World Bank, Yugoslavia.


%d bloggers like this: