China loans money to developing countries with no environmental strings
Tired of all those environmental conditions on loans from Western countries and the World Bank? If you are a country in Asia with plentiful natural resources, you are in luck. China is there for you with lots of aid, especially if it is for infrastructure like bridges that will make getting those natural resources to China easier.
Today’s piece in the New York Times gives a sense of China’s new profile in foreign assistance, and as the piece says:
The Chinese money usually comes unencumbered with conditions for environmental standards or community resettlement that can hold up major projects. The aid does not carry penalties for corruption that are being increasingly used by the World Bank president, Paul D. Wolfowitz. And China’s offers rarely include the extra freight of expensive consultants, provisions that are common to World Bank projects.
On the final point, it is hard to argue with the developing countries’ objections to loans that are also employment programs for Western consultants. Western countries and the IFIs may have lessons learned and terrific human capacity to share, but making developing countries pay for it, often at very high rates, is bound to be resented.
But these new trends in foreign assistance really do raise some tough questions. Many Gristmill readers will be very critical of World Bank or regional bank infrastructure loans that they believe are part of the problem, not part of the solution to solving environmental sustainability challenges. Yet will we someday yearn for the level of environmental accountability that comes with World Bank projects? The NYT piece alludes to the World Bank decision to help fund an environmentally controversial dam in Laos in part because China stood ready to fund it, presumably with no pesky environmental considerations attached to the financing.