World Bank to loan India 9 billion dollars for rural development
New Delhi (AsiaNews) During a recent Asian trip that included stops in India and Pakistan, World Bank (WB) President Paul Wolfowitz said the institution was lending India US$ 9 billion over the next three years for rural development. Press reports suggest three billions will be released each year, a 500 per cent increase over the last two years when the WB loaned only one billion the South-Asian giant.
The decision to raise aid was apparently made during Wolfowitz's trip. Before his depart, the WB was prepared to sign up for three billions over three years.
The loans are earmarked for roads, drinking water and irrigation facilities in rural areas. Nearly 70 per cent of India's more than 1 billion people live in more than 500,000 villages connected largely by dusty tracks, dependent on agriculture and forced to endure acute shortages of drinking water and electricity.
"But though it's making rapid strides, India has an unfinished agenda," Wolfowitz said in a statement released to the press. "It is still home to a quarter of the world's poor people, most of whom reside in the rural areas. Infrastructure constraints are an impediment to growth. The government has rightly made provision of rural infrastructure and investments in hard infrastructure a priority. The World Bank feels privileged to support these efforts."
In 2004 India had one of the fastest annual growth rates in the world: about 7 per cent. Sixty years ago half of the population lived below the poverty line as measured by minimum caloric intake and ability to provide basic education to children.
By some accounts, about a quarter of the population still lives below the poverty line despite obvious progress. Using different measuring criteria, other studies estimate the number of poor in India to be around 350-400 people.
Whichever is correct, it still is true that today's main social cleavage is between the rapidly growing cities and the still backward countryside.
Some Indian commentators like Sudhir Chadda of the India Daily wonder whether Wolfowitz will be able to do what Indian politiciansfrom the currently ruling Congress Party to the opposition Hindu nationalist BJPhave failed time and time again to do, i.e. help the poor.
Chadda notes that both parties received funds in the last elections from India's "oligarchs", the 17 families who control 87 per cent of India's wealth. For him and others, the two parties would not be able to survive even a day without the oligarchs' financial backing.
Beside what the current economic situation may mean, another political factor is at stake. The current Congress-led coalition government is in power because of the support of India's Communist Party, which controls almost 13 per cent of all the seats in parliament and is gaining support in the poorer, rural areas of the country.
Indian commentators thus view WB assistance as politically motivated, inspired by a desire to see rural voters move towards the Congress Party and the hope that aid might generate greater sympathy for the US in Indian society.
And lest we forget, Paul Wolfowitz was recently appointed to the post of WB President thanks to the backing of US President George W. Bush.
Finally, the US recently expressed its opposition to a gas pipeline linking Iran to India through Pakistan. For many observers, this opposition is rooted in strategic considerations. Whilst a pipeline might give India access to Iran's gas supplies, it would also economically and politically link the two countries.
It is no secret that Iran remains on the US unwanted guest list.
According to the Pakistani press, the WB loan offer would stop India from succumbing to Iran's excessively tight hug.
However, the WB denied reports that the donor agency had warned the Pakistani government against supporting the proposed gas pipeline, WB spokesman Shahzad Shargil said on August 18 in Islamabad.
When asked, he declined though to make any statement whether or not the World Bank had any concerns or apprehensions regarding the project, saying that the WB President Paul Wolfowitz was the right person to comment. (MdO)
.png)
