Kim's trip to South Africa was just a PR exercise for the World Bank
The World Bank president promoted coal, private sector investments and outsourcing, none of which are in the interests of the people of South Africa
Just nine weeks into a new job that pits his critical intellect and earlier game-changing Aids treatment advocacy against the need to relegitimise a very sick multilateral institution, the most startling contradictions were laid out in front of the World Bank president, Jim Yong Kim, in South Africa. Yet during his trip, those contradictions were barely acknowledged, despite the fact that the country is screaming out for decisive leadership and moral clarity.
Last Thursday, Kim met President Jacob Zuma, finance minister Pravin Gordhan and other cabinet ministers in Pretoria, and then, down the road in Johannesburg, he praised the World Bank's local International Finance Corporation (IFC) staff, who are dedicated to private-sector investments, and even recorded a brief video while visiting Mailtronic Direct Marketing, a successful, IFC-funded small business specialising in printing and posting.
In his blog the next day, Kim was effusive about the trip, including possible collaboration on an issue dear to my heart: fighting the spread of tuberculosis.
Really? If this is not public relations gimmickry, and if Kim genuinely wants to tackle TB, it would mark a U-turn in the bank's historic trajectory. From 1951, the bank's lavish financing of the then-apartheid regime's Eskom energy parastatal to build coal-fired power plants and transmission lines that entirely avoided black townships and villages, required the country's majority to use dirty indoor energy (paraffin, coal and wood) for cooking and warming their shelters, regardless of the profuse particles produced that could lead to or exacerbate respiratory illnesses.
Bank-financed electricity mainly supplied South Africa's mining houses and smelters, as is still the case (the main customer of the Medupi coal-fired power station currently being built will be BHP Billiton, which consumes more than 10% of the country's power, to smelt aluminium – though the alumina is imported). Then and now, this facilitated South Africa's notorious migrant labour system, with low pay to migrant workers who succumbed to TB in squalid, single-sex, 16-to-a-room hostels and shacks.
Kim failed to address these historic issues, which are mirrored in his institution's current portfolio, especially the IFC's controversial commitment (approved by former president Paul Wolfowitz in 2007) of $150m in equity/credit lines to Lonmin at the Marikana mine, as well as the $3.75bn for the Medupi plant north of Pretoria, pushed through by his immediate predecessor, Robert Zoellick.
The 34 victims of the Marikana massacre were mainly migrants from Lesotho and the Eastern Cape. Their migrant labour status replicates apartheid, including health vulnerability in disease-ridden shack settlements.
Many more low-income South Africans have shifted to dirty energy sources that spread TB, thanks to electricity price increases of 128% from 2008-12, justified by Eskom's build programme, which features Medupi.
Worsening price and access problems, in turn, have prompted thousands of service delivery protests that often became violent. The very day Kim arrived, hundreds of Medupi workers downed tools over grievances associated with outsourcing, and protests forced an evacuation of the construction site.
Coal is a difficult issue, Kim said at his Pretoria press conference, while promising to help with South Africa's $100bn coal-centred infrastructure expansion. Medupi alone will spew 25m tonnes of CO2 annually, more than the emissions total of 115 countries.
Then Kim's spin turned surreal. There was a very strong sense that this clean coal project [Medupi] was the way to go, he said. The very phrase evokes a shudder, considering an estimated 10,000 people die annually from multilateral-financed, coal-fired power plants, according to the Environmental Defence Fund. Given the ongoing mining chaos here, including widespread acid mine drainage wrecking eastern South Africa's water, clean coal is a contradiction in terms. The renewable energy piece of the Eskom loan was acknowledged as a fig leaf by William Moomaw, a bank consultant to the Medupi loan.
What about Kim's enthusiastic praise for Mailtronic's great story? Organised labour here valiantly opposes tenderpreneur dealings that cause state shrinkage via outsourced tenders on behalf of entrepreneurs. The World Bank pushed Pretoria to privatise after Nelson Mandela took office in 1994, and it was insensitive for Kim to promote outsourced printing when the government should be building internal mass-communications capacity.
Equally dubious was the claim that IFC's stake in Mailtronic's junk-mail paper/packaging waste – with its promotion of rampant consumerism – contributes to fighting poverty.
As the neoliberal Columbia University economist Jagdish Bhagwati said of the US-led nomination and selection process in April, it was of a piece with the linguistic obfuscations that dominate American public debate, and allowed Kim to gain presidency of the World Bank unfairly. Though I would quickly diverge from Bhagwati's agenda, Kim's visit here gives further reasons for him to resign, before more futile statements are uttered in defence of the indefensible at the World Bank.
Jim Yong Kim Comes To Joburg
But Will World Bank President Visit Marikana And Medupi?
Patrick Bond 6 September 2012
“One of the things you learn as an anthropologist, you don’t come in and change the culture,” Dartmouth College President Jim Yong Kim told wealthy alumni when contemplating the institution’s notorious hazing practices, prior to Barack Obama’s request last February that he move to the World Bank.
Kim’s Harvard doctorate and medical degree, his founding of the heroic NGO Partners in Health, and his directorship of the World Health Organisation’s AIDS division make him the best-educated, most humane Bank president yet. A decade ago, he co-edited the book Dying for Growth, pointing out that ‘Washington Consensus’ policies and projects had a sharply adverse impact on health.
No better examples here can be found than two ‘minerals-energy complex’ investments approved by his predecessors Paul Wolfowitz in 2006 and Robert Zoellick in 2010. Kim should pay a visit because both are within an hour’s drive of the Joburg-Pretoria megalopolis, whose ten million people live in the relatively barren area simply because of the gold’s discovery in 1886.
Though nearly all gone now, gold built the continent’s largest industrial complex, spewing vast pollution and undergirding apartheid. The old mines wrecked the water system with Acid Mine Drainage, not to mention lives of hundreds of thousands of former workers now filing silicosis lawsuits against the mining houses, or similar numbers of HIV+ migrant workers and their wives back home in the old Bantustans or neighbouring countries.
Mining is again wrecking worker health and creating socio-ecological chaos west of Joburg, at Marikana platinum mine, where the Bank’s International Finance Corporation invested $15 million in Lonmin to enhance ‘community development’. Wolfowitz authorized a further $135 million in equity and debt, but the price of platinum crashed by two thirds in 2008, which made a further stake doubtful.
Far greater banking profits were generated in the Bank’s biggest-ever project credit: the $3.75 billion Zoellick lent in April 2010, mainly for the construction of the third largest coal-fired power plant on earth, at Medupi.
The social and environmental balance sheet immediately went into the red, not only because the loan was granted just 20 months prior to Durban hosting the United Nations COP17 climate summit, when last December Zoellick unsuccessfully requested that the Bank be given control of the potentially vast Green Climate Fund, with promised annual spending by 2020 of $100 billion.
Worse, the borrowing agent for Medupi was Eskom, which controversially bought billions of dollars worth of turbine boilers from Hitachi, in whose local subsidiary the African National Congress (ANC) held a quarter ‘Black Economic Empowerment’ share. In an obvious conflict of interest, Eskom’s chair, Valli Moosa, also sat on the ANC Finance Committee, drawing a rebuke of ‘improper conduct’ from the Public Protector.
A substantial civil society coalition opposed Medupi, and the Bank’s own Inspection Panel slated the loan. Yet when announcing Kim’s visit last week, the Bank claimed that it “helps bring badly needed electricity to homes”.
In reality, the 130 percent Eskom price increase from 2008-12 to pay for Medupi was borne not by the largest electricity consumer, BHP Billiton (which still gets the world’s cheapest power thanks to a 40-year apartheid-era deal), but by ordinary poor people. Power disconnections are now a leading cause of the surge in community protests, already at amongst the highest levels on earth.
The Bank’s accompanying renewable energy credit to Medupi was a ‘fig leaf’, confessed Tufts University Professor William Moomaw, a consultant to the Medupi loan.
And although according to the same Bank announcement, “The World Bank Group’s program in South Africa is still in early stages,” the relationship began in 1951, with huge loans to Eskom to supply white households while blacks got no electricity until the 1980s, thanks to prevailing apartheid restrictions.
Kim is an optimist, pronouncing “Africa is truly taking off,” on the eve of his departure this week. But his own institution’s 2011 book, The Changing Wealth of Nations, measured capital not just in financial terms but also with respect to the minerals beneath the soil, to capture the genuine ‘wealth of nations’ in Africa.
In the process, the continent’s ‘adjusted net savings’ was calculated at negative 7 percent per year mainly due to non-renewable resource extraction: “Africa is consuming more than its current net income. It can only do this by liquidating its [natural] capital, which will leave its citizens poorer and with less capacity to generate income in the years to come.”
Herein Kim’s critical problem: extractive industries promoted by the Bank are creating Resource Curses in Marikana, Medupi and everywhere. The day after the massacre, the Washington-based Center for International Environmental Law called on Kim to revisit his stake in Lonmin and reconsider the extractives sector.
If after this week’s trip, Kim decides to leave the toxic culture of SA’s minerals-energy complex unchanged, it will be yet another case of ‘dying for growth’: profits for multinational capital at the expense of people and planet.
Patrick Bond teaches development studies at the University of KwaZulu-Natal in Durban, where he directs the Centre for Civil Society (http://ccs.ukzn.ac.za)
Fig-leaf fibbery from the World Bank in South Africa
Jim Kim missed the meaning of the Marikana massacre and Medupi’s climate chaos
DURBAN - Just nine weeks into a new job which pits his critical intellect and earlier game-changing AIDS treatment advocacy against the need to relegitimize a very sick multilateral institution, the most startling contradictions hit World Bank President Jim Yong Kim. Yet during his trip to South Africa, the hypocrisies were barely acknowledged, at a time this society is screaming out for decisive leadership and moral clarity.
Last Thursday, Kim met President Jacob Zuma, Finance Minister Pravin Gordhan and a half-dozen other cabinet ministers in Pretoria, and then down the road in Johannesburg, he praised the Bank’s local International Finance Corporation (IFC) staff dedicated to private sector investments and even recorded a brief video while visiting a successful IFC-funded small business specializing in printing and posting: Mailtronic Direct Marketing.
In his blog the next day, Kim was effusive about the trip, including “possible collaboration on an issue dear to my heart: fighting the spread of tuberculosis.”
Really? If this is not public relations gimmickry and if Kim genuinely wants to attack TB, it would mean a U-turn from the Bank’s historic trajectory. From 1951, the Bank’s lavish financing of the apartheid regime’s Eskom energy parastatal, so as to build coal-fired power plants and transmission lines that entirely avoided black townships and villages, required the country’s majority to use dirty indoor energy (paraffin, coal and wood) for cooking and warming their shelters, no matter the profuse particulates that carried TB and other respiratory illnesses.
Bank-financed electricity mainly fired up South Africa’s mining houses, as is still the case (Medupi’s main customer will be BHP Billiton, consuming more than 10 percent of the country’s power so as to smelt aluminium – though the alumina is imported). Then and now, this facilitated South Africa’s notorious migrant labour system, with low pay to migrant workers who succumbed to TB in squalid single-sex 16-to-a-room hostels and shacks.
Kim consistently failed to admit that these historic attacks on worker and community health are mirrored in his institution’s current portfolio, especially the IFC’s controversial commitment (approved by then-President Paul Wolfowitz in 2007) of $150 million in equity/credit lines to Lonmin at Marikana mine, as well as the $3.75 billion (the largest-ever Bank project loan) for the Medupi coal-fired power plant north of Pretoria pushed through against numerous loud objections by his immediate predecessor, Robert Zoellick.
The 34 victims of the Marikana massacre were migrants from Lesotho and the Eastern Cape, while Medupi’s impact on Eskom pricing to low-income black people – a 130 percent increase over the past four years – contributes to thousands of “service delivery protests” that regularly turn violent. The very day Kim arrived, hundreds of Medupi workers forcefully downed tools over grievances associated with outsourcing, and protests forced an evacuation of the construction site.
“Coal is a difficult issue,” said Kim at his Pretoria press conference, while promising Gordhan help with his $100 billion coal-centred infrastructure expansion. Medupi will spew 30 million tonnes of CO2 annually, more at that one site than do 115 countries.
Then Kim’s spin turned absurd: “There was a very strong sense that this clean coal [sic] project was the way to go.” The very phrase evokes a shudder, given that an estimated 10,000 people die annually from multilateral-financed coal-fired power plants, according to the Environmental Defense Fund. Given the ongoing mining chaos here, including widespread Acid Mine Drainage, “clean coal” is a contradiction in terms.
Medupi is also demonstrably corrupted by Zuma’s party fundraising, and the renewable energy piece of the Eskom loan was acknowledged as a “fig leaf” by Bank consultant William Moomaw just as the credit was granted.
What about Kim’s enthusiastic praise for Mailtronic’s “great story”? Organized labour here valiantly opposes “tenderpreneur” dealings that cause state-shrinkage via outsourced tenders on behalf of politically connected entrepreneurs. The Bank pushed Pretoria to privatize after Nelson Mandela took office in 1994, and it was insensitive for Kim to promote outsourced printing when government should be building internal mass communications capacity.
Just as bad was pretending that the IFC’s stake in Mailtronic’s junkmail paper/packaging waste – and promotion of rampant consumerism – contributes to fighting poverty (moreover, the company has no website nor is searchable on the IFC site).
As the neoliberal Columbia University economist Jagdish Bagwhati muttered in April, “linguistic obfuscations that dominate American public debate” allowed Kim to gain the Bank’s presidency unfairly. Though we would quickly diverge from Baghwhati’s agenda, Kim’s visit here gives further reasons to resign, before more futile fibs are uttered in defense of the indefensible at the World Bank.
Patrick Bond directs the University of KwaZulu-Natal Centre for Civil Society and is the author of Politics of Climate Justice (UKZN Press, 2012).