A memo by the World Bank's chief economist recommending that polluting industries be concentrated in the Third World highlights the "economic logic" that selectively targets poor people and their countries for environmental devastation.
The internal memo was written in December 1991 by World Bank chief economist and vice president Lawrence Summers. Its recent publication is embarrassing for the World Bank primarily because of its high-profile role in the upcoming United Nations Conference on Environment and Development (UNCED) in Brazil. The World Bank is by far the world's most influential development bank.
Summers' memo on trade policy asks: "Shouldn't the World Bank be encouraging more migration of the dirty industries to the LDCs [less developed countries]? Health-impairing pollution should be done in the country with the lowest cost, which will also be the country with the lowest wages. I think the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable and we should face up to that."
Summers states that high infant mortality rates in Third World countries make them more logical places to pollute. "Concern over an agent that causes a one-in-a-million change in the odds of prostate cancer is obviously going to be much higher in a country where people survive to get prostate cancer than in a country where under-five mortality is 200 per thousand."
In response to these comments, Greenpeace and the environment minister of Brazil called for Summers' resignation.
But, not entirely ironically, Doug Henwood commented in the US Nation, "It makes no sense for Summers to resign; he expressed the bank's logic perfectly. It's a bank, and acts like one. It may preside over a steady erosion of Third World incomes relative to First World ones, but it makes big money. Last year, after paying $7 billion in interest and fees to its investors and bankers, it had a $1.2 billion surplus and a rate of return that commercial banks would envy."
The bank's executive board decided to put $904 million of that profit into retained earnings, which now total $11.9 billion, Henwood continued. "According to UNICEF, preventing vitamin A deficiency blindness would cost $6 million. Preventing 'the great majority' of childhood malnutrition deaths would cost $2.5 billion. But adding to the World Bank's surplus is a higher priority."
The disturbing news is that forcing pollution on the poor may be the implicit mission of the World Bank as it goes to the Earth Summit. The statements by Summers and by officials of the Bush administration shed light on an immoral and short-sighted Northern corporate and government approach to environment and development.
Southern leaders have said that by refusing to promise more environmental aid to the Third World or to set limits for emissions of gases that contribute to global warming, the US threatens to sabotage the two most important agreements to be taken up at the Earth Summit.
[From the Nation and Pesticide Action Network North America/Pegasus.]