Mission has failed, can’t carry on: WB
From Mark Egan

WASHINGTON, Sept 16 — After over 50 years of seeking to reduce poverty and disease and educate the poor, the World Bank has admitted that many of its past policies were misguided and it needed help to succeed in future.

The bank’s annual World Development Report painted a bleak picture of a developing world which has fallen even further behind rich nations despite the efforts by the World Bank and others to make the world a better place to live.

It also said that in many ways the Bank had failed in its mission to improve conditions of poverty, disease and poor education in the developing world and admitted that it cannot carry the burden alone if its ideas are to work.

“Simple solutions - investments in physical and human capital, for instance, and unfettered markets — will not work in isolation,” the report said, admitting its past focus had been misguided. “Governments, the private sector, civil society, and donor organisations need to work together in support of broad-based development.”

But the report remained optimistic for the future, laying out a new policy for the future which builds on the knowledge gleaned from past successes and failures.

The Bank attributed much of its past problems to seeking out a “magic bullet” which would solve the woes of the world’s poor.

“The conceptual frameworks for development of the past 50 years ... tended to focus too heavily on the search for a single key to development,” the report noted. “When a particular key failed to open the door to development in all times and places, it was set aside in search for a new one.”

As an example, the report said projects like building dams — something the World Bank was prolific in during the 1950s and 1960s — can carry hidden costs and harm communities through population dislocation and other cultural and environmental problems.

It also said: “Trickle-down economics” — the practice of cutting taxes for the rich hoping it would benefit the poorer in society — does not work.

But whatever policies were used over the past 50 years, one thing is certain: poverty continues to rise. Today 1.5 billion people live on an income of less than one dollar a day, up from 1.2 billion people in 1987. The report forecast the numbers living at that lowest of incomes would reach 1.9 billion by 2015.

The gap between the rich and the poor has also widened. Between 1970 and 1985 the average per capita income for the world’s poorest countries dropped from 3.1 per cent of incomes in rich countries to just 1.9 per cent.

“The fact is that we are not winning the battle against poverty, poverty is increasing,” World Bank chief economist Joseph Stiglitz told reporters. “But I think we do have within our reach the ability to improve people’s lives,” he added.

Learning from past successes and failures, the Bank said a more “holistic” approach was needed to formulating development strategies.

“In some areas the most effective way to improve educational outcomes for children may not involve increased expenditures on books or teachers but instead may involve building a rural road or a bridge across a river to facilitate access to schools,” the report said as an example.

The bank’s new approach attempts to embrace a more comprehensive approach which could be adapted for each country. The approach includes the development of a sound economy but also building stronger legal systems, banking sectors and other aspects of a nation’s fundamental structures. — Reuters

$ 391m net outflows from India to WB

WASHINGTON, Sept 16 (PTI) — Huge interest burden on previous loans has resulted in net outflows from India to the World Bank and the International Development Association (IDA), according to the World Bank’s latest World Development Report.

The net outflows from India during the fiscal ended June 1999 stood at $ 391 million and a whopping $ 2,157 million during the period 1994-95, the report points out, adding the India was the only country in South Asia to be in such a position. Pakistan and Bangladesh continue to have positive flows from the bank, it says.

In fiscal 1999, while the World Bank and IDA commitments to India totalled $ 1,055 million, the undisbursed balance was $ 8,939 million, gross disbursements stood at $ 1,437 million, the repayments were $ 1,157 million resulting in net disbursements of $ 280 million.

This along with interest and charges of $ 671 million led to a net outflow of $ 391 million.

Fourth largest in PPP terms

India is the fourth largest economic power in purchasing power parity (PPP) terms, despite its unrealised potential and low per capita income, according to the World Development Report.

India, though ranked fifth by the World Bank on the basis of a population of 989 million, would stand at the fourth position (equal to that of Germany) if its current population, which is over one billion is taken into account.

The country is ahead of five (or six if Germany is included) out of the group of 8 industrial countries (USA, Britain, France, Germany, Japan, Italy and Canada plus Russia).

As per the report the gross national product (GNP) of India in 1998 stood at $ 1,660.9 billion. While the per capita income on the basis of PPP was $ 1,700, in conventional terms it was $ 430.

Decentralisation

The World Bank warned that globalisation without decentralisation of power could lead to “civil and ethnic strife and disintegration” of states and lauded India’s efforts towards what it called “localisation”.

Globalisation is like a giant wave that can either capsize nations or carry them forward,’’ it said, adding that decentralisation of power to the provincial and local levels was crucial for it to work.

Political instability

The World Bank blamed political instability in India for slowdown of the economic reform process which retarded the flow of foreign investment in the country.

Coupled with this, the imposition of economic sanctions by the USA in the aftermath of nuclear tests by India and Pakistan in May last year, affected the Bank’s lending programme in the first half of 1999.

The Bank praised India for achieving a 5.8 per cent GDP growth in 1998-99, notwithstanding the East-Asian currency meltdown but it fell short of the GDP growth achieved by the country in the early 1990’s.

ALL ups market share

Commercial vehicle manufacturer Ashok Leyland (ALL) today reported a marginal increase in its marketshare between April and August and hoped to end the year on a stronger note due to an expected demand spurt from the State road transport sector.

“Our marketshare has risen from about 34 per cent to 35.1 per cent so far this fiscal, with general haulage category (trucks of various tonnage) improving from 26 to 27 per cent, ALL’s Executive Director Amol J. Sandil told reporters here.

Ashok leyland is expecting a significant rise in volumes from State transport undertakings particularly in the replacement segment, as several States are known to be raising funds for this purpose, Sandil said.

TVS-Suzuki today reported a 31 per cent growth in turnover during April-August and said it will launch a slew of new models later this year to enhance its marketshare from the existing 20.6 per cent.

“The turnover for April-August, 1999 is Rs 657 crore as against Rs 500 crore last year... given this performance I am confident of maintaining this trend in coming months too,” TVS-Suzuki Chairman Venu Srinivasan told shareholders at the 16th AGM here.

Godrej Soaps has achieved a turnaround in its performance by registering a gross profit of Rs 4 crore in the first quarter of this fiscal year, the company President, Mr H.K. Press, said today.

Lenders of loss-making Synthetics and Chemicals Ltd, including the SBI and ICICI, have questioned the accounting practices of the company alleging that there was an attempt to show losses to avoid payment to creditors.

Jindal Polyster is considering to introduce employees stock option plan). The company will issue 10 lakh equity shares of nominal values of Rs 10 lakh each to employees, including Executive and non-executive directors, sources said, but added that promoter directors would not be eligible to subscribe in ESOP.
— Agencies

25 pc subsidy for cold storages

NEW DELHI, Sept 16 (PTI) — The Government proposes to extend a 25 per cent subsidy on capital investments made in setting up of new cold storage facilities, a top Agriculture Ministry official said today.

“The Department of Agriculture and Cooperation in association with the National Horticulture Board (NHB) has formulated a scheme which will pave way for providing 25 per cent subsidy to new cold storage facilities,” Secretary Agriculture Bhaskar Barua said.

Under the scheme, subsidy would be available to investments upto Rs 50 lakh made in installing fresh cold storage facilities, except in North-East where the eligibility ceiling has been fixed at Rs 60 lakh, Barua said addressing an international conference on India’s cold chain infrastructure organised by FICCI here.

Book on consumer rights released
Tribune News Service

NEW DELHI, Sept 16 — A comprehensive book on the rights of consumers, written by noted columnist Pushpa Girimaji, was released by Justice Suhas C. Sen, president of the National Consumer Disputes Redressal Commission, here today.

Releasing the book “Consumer Rights for Everyone”, Justice Sen said: “The book would be of immense use to the consumer to know his rights and the remedies he can seek from the consumer courts.”

Justice V. Balakrishna Eradi, the first president of the national commission, said: “The book would enlighten the consumers about their rights and the inexpensive remedy for the redressal of their grievances.”

Girimaji said though 13 years have passed since the Consumer Protection Act, 1986, came into being, about 80 per cent of the people in the country are still not aware of it. About 1.3 million cases have been filed before the courts over the last 12 years.

India may ask EU to cut subsidies
Tribune News Service

NEW DELHI, Sept 16 — India is likely to put pressure on the developed countries to reduce agricultural subsidies in the coming Ministerial Conference of the WTO, Commerce Secretary, P P Prabhu said here today.

Speaking at a seminar organised by the CII, Mr Prabhu said “the subsidies distort free global trade and we will put pressure, especially on the European Union, to reduce their level in the agriculture sector”.

While developed countries are trying to bring in issues like labour standards, the Commerce Secretary said India will not succumb to such pressures and also push for greater market access.

The Ministerial Conference is scheduled to be held from November 30 to December 3 at Seattle, the USA, with several new issues expected to be taken up for discussion by the members.

Special Secretary, N N Khanna said it is important that the actual rate of protection is put on the agenda, adding that India has been removing quantitative restrictions (QRs) at a faster pace for the last two years.

He also said the internal liberalisation needs to matched with external trade liberalisation.

CII President Rahul Bajaj said the situation calls for an objective assessment and urged the Government to take a tough stand to protect national interests.

Senior Vice-President of Ranbaxy Laboratories B K Raizada said the tariff peaks rather than averages should be addressed.

Managing Director of Eicher Motors, S Sandilya said the Indian automobile industry must aim at a tariff equivalent to the current effective level which includes both QRs and tariff.

Director of Arvind Mills, Naishadh Parikh suggested to advance integration schedule from January 1, 2005 to January 1, 2002 and added that the country could stand to lose if denial of market access continues through high tariff barriers.

Senior Executive Vice-President of Reliance Industries, K P Nanavaty said the offsetting measures need to be put in place for the chemicals and petrochemicals industry as it was prone to cyclical swings.

Senior Vice President of NIIT, Shrikant Inamdar said India must push for a broadband definition of information technology.

SAB Info offers Net services
Tribune News Service

CHANDIGARH, Sept 16 — SAB Infotech has become the first company to offer Internet services in Chandigarh and the surrounding areas.

The Internet service called Glide, is connected to the Net via the satellite earth station of PunCom. Being an all-digital service, it does away with conventional copper lines and modems.

Formally announcing the launch of the Internet service here today, Mr Dheeraj Garg, Managing Director, said about 1,000 subscribers have opened Glide accounts. Subscribers get multiple e-mail mailboxes, web space where they can host their personal web pages and a free CD.

To tackle complaints, Mr Garg said Glide has a round-the-clock help desk accessible on e-mail and the telephone.

Besides Internet services, SAB Infotech provides high-end Internet education to professionals in collaboration with World Wide Web Institute, Geneva.

SAB Infotech has also tied up with Cyber Kids International, Cyprus, for providing computer related education to kids in the age group of 4-13 years.

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HUDCO
CHENNAI, Sept 16 (PTI) — HUDCO will tap the US capital markets for the first time to raise $ 10 million to finance infrastructure projects in India. Hudco will sign an agreement in Washington on September 22.