Abstract
In the spring of 1992, only six months after the Bangkok World Bank/imf gathering, another developing-country government was completing feverish preparations for a gigantic international conference. The “Earth Summit” in Rio de Janeiro was to be the largest diplomatic gathering in history. Thirty thousand people attended the summit, officially known as the United Nations Conference on Environment and Development (unced), in June; 9,000 journalists and 118 heads of state flew to Rio for the global eco-event. Once again, no expense was spared. The government spent $33 million to refurbish a huge convention hall, Rio-Centro, where the official meetings were to take place.1 It built a special seven-kilometer highway at a cost of $130 million, to whisk heads of state from the airport to their luxury hotels. Brazil’s national environmental laws, which would have required the preparation of an environmental impact study, were suspended to permit construction in record time.2
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Notes
- 1.
The murder of homeless street children, almost all of them black or of mixed race, by police death squads, had been going on for years in Brazil’s cities and has been condemned by numerous Brazilian and international human rights organizations.
- 2.
Net transfer figures: World Bank, World Debt Tables, 1993-1994, Volume 1,Analysis and Summary Tables (Washington, D.C.: World Bank, 1993), 172; procurement figures: World Bank,AnnualReport, 1992 (Washington, D.C.: World Bank, 1992), 77.
- 3.
“Thus” a 1990 World Bank office memorandum states, “the three dams of the nsc [Narmada Sagar Complex], together with the two ssp [Sardar Sarovar Project] projects [for the dam and the canals] and the related R & R [Resettlement and Rehabilitation offorcibly displaced populations] and area development aspects for all four reservoirs and their catchment areas, should be viewed as a technically and economically interdependent development complex” (Work! Bank office memorandum, 14 March 1990, p. 2, cited in Sardar Sarovar: Report of the Independent Review [see endnote 14],238).
- 4.
“As with Sa’ dar Sarovar,” the Morse Commission notes, “almost all [the project’s problems 1 are well d xumented in the Bank’s files but are not reflected in the Staff Appraisal Report” (Sardar Sarovar: Report of the Independent Review, 336).
- 5.
Total outstanding ibrd Loans and ida credits amounted to $152,662 billion in the Bank’s fiscal year 1992, of which $23,649 billion was owed by India. (World Bank, Annual Report 1992,202–3,222–23.)
- 6.
From an institutional standpoint (i.e., of formal rationality) the reasonable decision appears to be the one that does not contradict all the decisions that have come before or create unpredictability by breaking out of this iron cage of bureaucratic faits accomplis.
- 7.
The report did not examine recently commenced lending for Eastern Europe, or for the former republics of the Soviet Union that were joining the Bank as the report was being written.
- 8.
The economies too? Recall the huge recurring costs, year after year, that developing countries have been saddled with after borrowing for ill-advised and inappropriate megaprojects such as huge dams and irrigation systems (e.g., India), recall the hundreds of millions that Brazil and Indonesia are borrowing for environmental rehabilitation in the wake of Polonoroeste and Transmigration—all of which divert future capital and more foreign loans to salvage and maintain “sunk investments,” money that could be otherwise channeled into more productive and sustainable uses.
- 9.
In 1993, the Clinton administration signed the biodiversity convention, reversing the United States’ position.
- 10.
But a “Public Information Center” was finally set up in 1993 under a new Bank information policy.
- 11.
In such a convocation of governments, this was perhaps to be expected: Northern governments have never given much priority to assuring their funds are well used, and Southern governments resist as a matter of principal all efforts to attach more strings, conditions, and oversight to the funds they receive.
- 12.
According to a study of the Organization for Economic Cooperation and Development (oecd), more than 60 percent of Africa’s export earnings come from basic commodities (e.g., cocoa, palm oil, coffee, minerals, etc.) for which prices fall so rapidly with increased production and supply (i.e., for which the price elasticity of demand is such) that increases in export volume actually result in a decrease in earnings. (M. Godfrey, in T. Rose, cd., Crisis and Recovery in Sub-Saharan Africa lParis: oecd, 1985], 178, quoted in Reddift, Su.rtainable Development [see endnote 89], 59.)
- 13.
“The increase in energy used indirectly to support labor and produce capital offsets some fraction of the direct energy savings and reduces the amount of energy saved by priceinduced microeconomic substitution. As a result, the macroeconomic energy savings associated with substitution are less, perhaps much less, than the sum of the energy savings at the microcconomic level [emphasis added I” (Robert K. Kaufman, “A Biophysical Analysis of the Energy/Real gdp Ration: Implications for Substitution and Technical Change,” Ecololfical Economics, vol. 6, no. 1 (July 1992], 49).
- 14.
Tinbergen was also the first chairman of the United Nations Committee on Development Planning.
- 15.
“Throughput is the entropic physical flow of matter-energy from nature’s sources, through the human economy, and back to nature’s sinks” (Herman Daly, Steady-State Economics, 2nd ed. [Washington, D.C., and Covelo, Calif.: Island Press, 1991], 36).
- 16.
A steady-state economy is one in which there is no growth of population or physical capital, with a constant (not increasing), sustainable “throughput,” or flow-through, of matter and energy. It is “an economy with constant stocks of people and artifacts [physical capital], maintained at some desired, sufficient levels by … the lowest feasible flows of matter and energy [throughput] from the first state of production (depletion oflow-entropy materials from the environment) to the last stage of consumption (pollution of the environment with high-entropy wastes and exotic materials)” (Daly, Steady-State Economics, 17).
- 17.
See Salah El SeraiY, “Sustainability, Income Measurement and Growth,” in Goodland et al., Building on Brundtland [see endnote 66], 54. Economist Robert Repetto of the World Resources Institute has published several studies on Indonesia and Costa Rica that demonstrate how conventional calculations of economic growth for these nations have grossly overestimated their real progress. For example, official statistics cite Indonesia’s gross domestic product as having grown at a rate of7.1 percent between 1970 and 1984; according to Repetto, if one attempts to internalize as a loss of capital (as one should, instead of treating conversion of natural resources as pure gain) the cost of the depletion of petroleum, timber, and soils during that period, real gdp growth is only 4 percent. Similarly, factoring in this loss of natural capital reduces the annual growth of investment from 11.4 percent to 1.3 percent. On the island of Java, an apparentlv vigorous upward trend in agricultural production was in reality totallv offSet by roughly equivalent losses, which Repetto quantifies, in soil productivity. (Robert Repetto, “Balance Sheet Erosion,” International Environmental Affairs, vol. 1, no. 2 [Spring 1989], 131–35.) The example of Costa Rica-often viewed as an economic and ecological mode—is equally sobering. Again, Repetto looks at the depletion of only three resources—forest, soils, and fishing stocks-and concludes that over the 1970S and 1980s the loss of natural capital in Costa Rica amounted to over 5 percent of the gross domestic product most years, rising to around 10 percent in the late 1980s. Conventional economic accounting, by ignoring these losses, overstated capital formation in Costa Rica by 41 percent over the same period. (Robert Repetto, “Earth in the Balance Sheet: Incorporating Natural Resources in National Income Accounts,” Environment, vol. 34, no. 7 [September 1992], 1943.)
- 18.
Haavelmo and Hansen, for example, condemn most current foreign assistance because it reinforces a pattern that transters rents from resource-endowed developing nations to rich countries, which in turn supply “the South with machinery for speedier resource extraction … keeping down their prices of natural resources.” But aid that assists “development of location specific technologies and patterns of consumption adapted to local, cultural, and habitual patterns … should be encouraged” (Haavelmo and Hansen, in Goodland et al., Building on Brundtland, 32).
- 19.
The Group of Seven consists of the seven countries with the largest industrialized economies: the United States, Japan, Germany, France, Italy, Britain, and Canada.
- 20.
In September 1992, the Washingtoll Post published a devastating four-part exposé of U.N. abuses. “Despite broad agreement on the need for reform,” the Post concluded, “abuses within the [U.N.] organization persist and often go unpunished. The chiefs of some autonomous U.N. agencies rule their fiefdoms like autocrats, answering to no one. Regionalmafbs of U.N. bureaucrats have taken root, consolidating their power through favoritism in hiring and promotions. Recipient governments also routinely plunder U.N. programs, diverting aid from intended beneficiaries, with little remonstration from U.N. agencies” (William Branigin, “As U.N. Expands, So Do Its Problems,” Washington Post, 20 September 1992, A1).
- 21.
See, for example, Steve Coll, “A Plan to Save the Globe Dies in a Village,” Washington Post, 24 May 1992, A1. In an article written in anticipation of the Earth Summit, Coil describes the collapse of a World Bank reforestation project in a small Indian village, Chopta. He views it as a troubling portent for the Earth Summit, which will call for more fimding of similar projects. He cites interviews with villagers who contend that Indian government officials and World Bank staff never even visited the village, let alone tried to ascertain their needs.
- 22.
So called because of the now widely accepted hypothesis that global weather changes of great impact may result from minute changes in apparently trivial initial circumstances; for example, a butterfly flapping its wings and flying in one direction in the Amazon rather than another may initiate a sequence of events that results in a blizzard in Chicago several weeks later. (See James Gleick, Chaos: Making a New Science [New York: Viking, 1987], 8, 20–23.)
- 23.
For example, Peter Drucker notes that “the Chicago economist George J. Stigler (winner of the 1982 Nobel Prize in Economics) has shown in years of painstaking research that not one of the regulations through which the U.S. government has tried over the years to control, direct, or regulate the economy has worked. They were either ineffectual or they produced the opposite of the intended results. Stigler had no explanation; we now know that this is precisely how the ‘butterfly effect’ works—and will work again” (Drucker, The New Realities [see endnote 86], 166).
- 24.
Other ozone unfriendly chemicals such as halons, methyl chloroform, and carbon tetrachloride are also to be phased out.
- 25.
The study points out that there are only two dozen cfc manufacturers worldwide, and leading companies such as Dupont had already developed substitutes by the time the Montreal agreement was in place and saw economic opportunities in promoting them.
- 26.
A debt-for-nature swap involves the writing down or reduction by creditors (which can be industrialized-country governments or private international banks) of a specific amount of a developing nation’s foreign debt with the condition that a portion of the forgiven debt be used in domestic investments in nature conservation.
- 27.
There are numerous proposals for such management: Vice President AI Gore has outlined a “Global Marshall Plan” in Earth in the Balance, and in May 1989, a total of forty nations, including most European states (but not the United States), called for the creation of a new, supranational United Nations environmental authority to regulate the global environment. Their appeal subsequently became known as the Hague Declaration.
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© 2013 Bruce Rich
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Rich, B. (2013). Who Shall Rule the World—and How?. In: Mortgaging the Earth. Island Press, Washington, DC. https://doi.org/10.5822/978-1-61091-515-1_9
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