[lg policy] World Bank Faults Itself for Slow Progress in East Timor

Harold Schiffman haroldfs at GMAIL.COM
Thu Apr 21 22:08:55 UTC 2011

World Bank Faults Itself for Slow Progress in East Timor
Published: April 21, 2011

  WASHINGTON — A frank evaluation by the World Bank’s internal auditors of a
decade of efforts to help East Timor underscores the challenges facing
international organizations attempting to assist struggling nations.

The draft report, which has yet to be released publicly, assigns much of the
fault for slow progress in East Timor, which only emerged in 1999 after a
quarter-century struggle for independence from Indonesia, to the bank
itself. But it also illustrates the dilemmas that arise as development
agencies try to meet urgent needs while ensuring that donor money is not

The report by the Independent Evaluation Group, which reports directly to
World Bank directors, covers the period from 2000 to 2010. It says that:

•The World Bank delayed the opening of four desperately needed hospitals for
a year because it adhered too rigidly to its own procurement rules. This was
in a country where the child mortality rate was among the highest in
Southeast Asia, life expectancy was barely over 55 and there had been “a
total breakdown of the health care system.”

“They kept these hospitals offline for a year, though they had money in the
bank to equip them,” said a bank official familiar with the evaluation
process, who spoke on the condition of anonymity because he was not
authorized to discuss the report. Some bank advisers were deeply frustrated
by the delay, he said.

*•Efforts to support education were unsatisfactory. On the positive side,
the bank helped build and repair schools. But, at the request of the new
government, which was trying to dismantle the Indonesian education system,
it distributed teaching materials in Portuguese. This had been the main
language of instruction before the Indonesian occupation, when Timor was a
Portuguese colony, and the new government restored it as an official
language along with Tetum, an indigenous language. But Portuguese was spoken
by only 5 percent of the population, and few younger teachers could
understand the materials.*
* *
*It might have been more useful, the report says, to have developed
indigenous-or English-language texts, because English is a far more widely
spoken language than Portuguese and the language of nearby Australia, as
well as the language of the U.N. Transitional Administration in East Timor.*
* *
*One result: By 2009, more than 70 percent of students tested at the end of
the first grade “could not read a single word” of a simple text in
Portuguese. “This is a dismal record after 10 years of efforts,” the report
says. “A full cohort of the population may be functionally illiterate.”*
* *
•The report asserts that, at the urging of the bank — which provides loans
to developing countries with an explicit goal of fighting poverty — East
Timor saved too much of its precious petroleum revenues rather than spend
them on social projects, an approach that contributed to needlessly high
levels of poverty and unemployment.

Poverty, already at twice the rate of Indonesia, “rose significantly through
most of the evaluation period and declined only after 2007, when the
government, against bank advice, increased its spending using petroleum
resources,” the report states.

Ferid Belhaj, World Bank country director for East Timor, said it was
against bank policy to comment on an evaluation not yet final. But he said
the country had made “tremendous progress” in the past decade, building or
rehabilitating 637 schools, and helping increase life expectancy from 56 in
2000 to 61 in 2008.

“The World Bank has been supporting their efforts to overcome the huge
development challenges which are faced by all post-conflict countries where
political and social institutions are fragile, and things can go wrong,” he
said. “In Timor, we have had to adjust over the years to fast changing and
unpredictable situations.”

The bank’s new World Development Report 2011 points to the need for long
time horizons in fragile states. “True institutional transformations require
time,” it says. “It typically takes 15 to 30 years for weak or illegitimate
national institutions to become resilient to violence and instability.”
At independence, East Timor was devastated. An estimated 70 percent of its
economic infrastructure had been destroyed in years of fighting that had
killed thousands and displaced much of the population.

The World Bank is supposed to work through local governments, but East Timor
barely had one then. Ministry offices were sometimes staffed by former
rebels fresh from the hills.

“It’s a lot easier to look backwards,” said Scott Guggenheim, a former World
Bank adviser who worked in East Timor. “The country had been burned down.
You had half the population in refugee camps.”

Mr. Guggenheim, who spoke by telephone from Kabul, where he is working with
that government on development, said that project delays like those
afflicting East Timor are equally common in Afghanistan.

“Procurement is always tricky. It’s where most corruption happens,” he said.
“The donors clamoring for faster procurement are the first to scream bloody
murder if an audit says that people cut corners to speed things up.”

It is a classic tension, development specialists said. Recipient countries
want assistance quickly. Donors want assurances their money will be well
spent. The World Development Report emphasizes the need to help fragile
countries quickly but responsibly.

“International agencies and partners from other countries must adapt
procedures so they can respond with agility and speed,” it states. “We need
to accept a higher level of risk: If legislatures and inspectors expect only
the upside, and just pillory the failures, institutions will steer away from
the most difficult problems and strangle themselves with procedures and

The question raised by critics — and at least indirectly by the new
evaluation, is whether the World Bank, has fully internalized those lessons
about flexibility and less risk-aversion.

“We err on the side of caution,” said Lant Pritchett, a former World Bank
adviser who is now a professor of economic development at the Kennedy School
of Government at Harvard University.

He noted how Ellen Johnson Sirleaf, the newly elected president of Liberia
in 2005, issued desperate pleas to international donors for a $15 million
industrial generator, because she had promised to restore electrical power
to parts of the capital within 100 days. Her government approached the World
Bank, the United Nations, the African Development Bank, the European Union
and the U.S. Agency for International Development. All had money, but none
could meet the deadline.

“Everyone said, we could do that in a year, year and a half,” said Mr.
Pritchett. Mrs. Sirleaf could not wait. She finally got help from Ghana.

“All the procedures are set up for sort of functioning places with long time
horizons,” not countries facing chaos and desperate need, said Mr.

Difficult compromises are often necessary, specialists say.

“If you’re in a post-conflict situation and you think people’s lives are at
stake, you are going to want to try to move as quickly as possible, even
though you recognize that maybe some things are going to be used less
efficiently,” said Michael Morfit, a professor of international development
at Georgetown University who worked in Indonesia for Usaid. “You just accept
that as the tradeoff.”

The case of the Portuguese-language school texts in East Timor poses a
somewhat different but still challenging question: when to resist a
government’s policies if these seem ill-advised.

“In 1999, the education system had collapsed and enrollment was close to
zero,” the evaluation report states. But it said there appeared to be no
serious discussion within the World Bank as to “whether it made sense for
the bank to finance the distribution of textbooks in Portuguese to teachers
and children who didn’t understand the language.”

But present and former officials said the bank had little choice but to
accept a government’s preferences when it comes to such matters as an
official language.

“They’re not ill-meaning,” Mr. Pritchett said of bank officials. “They’re
just trying to follow the rules of the organization.”



 Harold F. Schiffman

Professor Emeritus of
 Dravidian Linguistics and Culture
Dept. of South Asia Studies
University of Pennsylvania
Philadelphia, PA 19104-6305

Phone:  (215) 898-7475
Fax:  (215) 573-2138

Email:  haroldfs at gmail.com

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