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dam-l Letter: LHWP Corruption



The following letter to the editor appeared in the Washington Post today.

 Corruption and the World Bank

 Monday, August 23, 1999; Page A16

The article "Big Firms Accused of Bribery in African Dam Project" cites
World Bank claims that it had a limited role in the Lesotho Highlands Water
Project
because it made only a small contribution to the multibillion-dollar
financing scheme
[Business, Aug. 13]. Nothing could be further from the  truth. Not only did the
World Bank finance the design of >the project; it also is  responsible for
setting
up and coordinating the financing program.
>
 According to a confidential World Bank project document,
>in 1991 the bank  agreed to participate in a trust for offshore lenders "to
> provide some comfort  for lenders who might otherwise be reluctant to
>assist in
> the financing." This  type of comfort was needed because of the international
>sanctions then in  place against the apartheid regime in South Africa.
>According to the same  document, the World Bank loan for the project went only
>nominally to  Lesotho, a country far too poor to qualify for large
>loans, while the real borrower was South Africa's apartheid regime. It is
>unacceptable for the World Bank to claim that it is a passive bystander in the
> unfolding corruption  investigation. Should the corruption allegation be
>substantiated, the World Bank must debar the companies involved in the bribery
>from future World Bank-financed activities. It also should launch an
>investigation into its own  role in this controversial project.
>

Besides serious allegations of corruption, the project,
>which includes the highest dam in Africa, has caused the vulnerable
>Highlands population to lose fields, grazing lands and access to fresh water
>sources. Despite promises, their livelihoods have not been reestablished,
>and poor people have  been pushed closer to the edge in their struggle for
>survival. Problems of  erosion and the downstream effects of massive water
>diversion will disrupt ecosystems and people's livelihoods. In Lesotho, as in
>many places,  corruption, environmental degradation and increasing
>poverty have a tendency to go together.
>
LORI POTTINGER
Director, Southern Africa Program,  International Rivers Network, Berkeley,
Calif.

KORINNA HORTA
Senior Environmental Economist, Environmental Defense Fund, Washington
>
Copyright 1999 The Washington Post Company

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      Lori Pottinger, Director, Southern Africa Program,
        and Editor, World Rivers Review
           International Rivers Network
              1847 Berkeley Way, Berkeley, California 94703, USA
                  Tel. (510) 848 1155   Fax (510) 848 1008
                        http://www.irn.org
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