Globe and Mail
June 25, 1999

The World Bank tried yesterday to defuse one of its most bitter disputes in years as it approved a $160-million (US) loan to China that had angered its biggest shareholders and outraged Tibetan activists.(Excerpt)

The loan, to be used in part to resettle 58,000 poor Chinese farmers to an area where Tibet’s spiritual leader, the Dalai Lama, was born, put the bank at the centre of a political storm. Among those who opposed the project in recent days were U.S. treasury secretary-designate Lawrence Summers, 60 members of the U.S. Congress, Tibetan interest groups and, most surprisingly, almost half of the bank’s 24 member board. The loan was approved yesterday against the votes of the bank’s largest and third-largest shareholders – the United States and Germany – despite claims that it violated its own rules in processing the loan. As the loan gained heightened attention, China lobbied hard to push it through despite the U.S. and German objections. Rumours circulated that China, the bank’s biggest borrower, might leave the organization and that foreign ambassadors in Beijing were threatened that investments in China would be quashed if the loan was not stopped. Canada, which had earlier signalled oppostion to the loan, abstained in the vote yesterday, while registering its concern at a closed door meeting that the bank staff had not followed proper discloure procedures or conducted proper environmental-impact studies. Canadian activists were disappointed that Ottawa refused to publicly oppose the loan.