Mekong Utility Watch

Minister of Finance responds

Hon. Paul Martin

March 16, 1999

I would like to thank you for your letter of January 29th, 1999 expressing concern over the accountability of institutions with international mandates.

I would first like to address your specific concerns about the Mekong dam projects in Laos, Cambodia and Vietnam and the Three Gorges dam projects in China.

Let me begin by clarifying that the World Bank is not financing any dams on the stem of the Mekong River. The Government of Lao PDR has requested the World Bank to provide a partial risk guarantee for the Nam Theun 2 hydroelectric project, which is on a tributary of the Mekong, and has completed substantial prepatory work as required by the Bank. This project has been prepared very carefully with a high degree of attention to the environmental and social concerns.raised through public consultations. The World Bank will not be participating in the construction of the dam or power facility.

To support the Mekong Delta countries, the Bank is preparing a technical assistance project for the Mekong River Commission,to prepare water utilization rules for Mekong. The project is key to the Commission’s capacity to manage decisions about water use during the dry season to ensure quality and adequate flows for downstream countries.

The World Bank is not currently involved in the Three Gorges project, nor does it have any plans to become involved in the future. In the late 1980s, the Bank co-chaired and financed a panel of international experts to supervise a feasibility study being conducted on the project, but this was not a World Bank study. The Bank’s involvement ended in late 1988 with the completion of the work of the panel of experts.

With respect to your more general concerns regarding the World Bank’s accountability, I would like to assure you that I share your concern that the Bank be held accountable for its actions, both to people in borrowing countries and to its shareholders.

Mistakes have been made in the past, and steps must be taken to ensure that those affected by Bank projects play a more meaningful role in the consultation process. We have therefore strongly emphasized the need for the World Bank to take a more client- oriented approach to development. Clearly, projects tailored to the needs of the recipients and owned by them have a greater chance of success.

The Bank has taken some important first steps. Currently, for every project that the Bank undertakes, a number of imperatives guide their actions. These include involving local citizens, and building and strengthening partnerships with governments, non-government organizations and the citizens of developing countries.

The World Bank has also instituted a process by which any group who considers they have or may be directly and adversely affected by a Bank-supported project or projects can ask the independent Inspection Panel to investigate whether the Bank has failed to abide by its policies and procedures.

But clearly, more can be done. Given the fiscal realities of donors and recipients alike, we are increasingly concerned with improving aid effectiveness and efficient use of resources. We will continue to monitor the impact of World Bank activities to ensure that development and poverty reduction are being given priority.

As the activities of the Canadian International Development Association (CIDA) and the Export Development Corporation (EDC) fall outside of my purview, I have taken the liberty of forwarding your letter to the Honourable Diane Marleau, Minister for International Co-operation and the Honourable Sergio Marchi, Minister for International Trade.

Thank you once again for your interest in this very important issue.


The Honourable Paul Martin, P.C., M.P.

c.c. The Honourable Diane Marleau, P.C., M.P.
The Honourable Sergio Marchi, P.C., M.P.


Categories: Mekong Utility Watch

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