Category: Foreign Aid

A troubling deposit at World Bank

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(November 25, 1995) For 5O years government guarantees have allowed the World Bank and its sister development banks to amass the world’s riskiest loan portfolios. Three months ago, the weakest of these sisters, the African Development Bank, was downgraded. And now for the first time, the World Bank admits that many of its own loans can’t be paid back.

Misspent billions: Third World aid?

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(May 10, 1995) If the tiny country of Laos had the same population density as the city of Manhattan, we would all be there–the globe’s entire 5.7 billion population, in fact, would have more space per person than do Manhattan residents, who pride themselves on living in one of the world’s most sophisticated cities. The space outside Laos–virtually the entire globe–would then be available for farming, mining, and whatever else our Laotian populace required.

The World Bank’s Finances: An International S&L Crisis

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(October 3, 1994) The World Bank, which is celebrating its 50th anniversary this year, has long enjoyed a sound financial reputation. But its AAA credit rating is not justified. Because of the perverse incentives under which the World Bank operates, the quality of its loan portfolio has diminished significantly, and because the bank is backed by rich-country governments, its irresponsible lending exposes Western taxpayers to a possible World Bank bailout on a scale comparable to the U.S. savings-and-loan bailout. That would leave taxpayers in the industrialized countries on the hook for $100 billion; U.S. citizens would be liable for nearly $30 billion.