World Bank funds

A letter in the May 4, 1996 The Jakarta Post takes offense that the nations who fund the World Bank refer to themselves as donors. Like commercial banks, the World Bank makes loans and requires that receivers pay back the loans. However, commercial banks only care that the loan is repaid at the highest interest rate they can negotiate. Unless profit from the project is necessary to repay the loan, commercial banks couldn't care less what happens to the funds or whether the funded project is beneficial to the receiver, or even whether the project is actually completed.

As a result of the lower commercial standards, the World Bank must receive funds from member states. If the U.S. and others did not provide those funds, the World Bank would soon be out of business. Furthermore, the governments which provide those funds are not repaid. Let's get this straight: to the tax payers of those nations, and to anyone with an objective attitude, this sounds very much like a donation, regardless of what it's called. While some private businesses may benefit, taxpayers certainly do not.

The writer also takes a swipe at the U.S. because some American businesses benefit from the work fostered by World Bank loans. Let's get this straight: World Bank money is not loaned so that the receiver can put it in a coffee can and bury it in the yard. The funds are intended to be spent. American firms provide goods and services that the receivers of those loans need. And for American firms, unlike those of many other nations, it is illegal to pay bribes and kickbacks to secure orders and contracts. (Yes, a few American firms break that law, but the vast majority do not). This means that American firms are more likely to have gained business from those World Bank funds through offering quality than through offering bribes. That can only be to the further benefit of the receiving nations.

So if the letter writer prefers to call the U.S. an export promoter he is correct, if petty, to do so. But if he also implies that the U.S. is not a donor, in that he is most emphatically wrong.

GARY GENTRY

Jakarta