Ms. BRAMBLE. Sort of secret discussion. Senator SYMMs. And I think that is one of the purposes of the U.S. being the big contributor or the second biggest but always a very large contributor in most of these banks. Obviously, if we don't take the lead on it, it won't be done. Now, my able staff assistant, Trent Clark, lived in Brazil for two years, and he has indicated to me many times that that was the case in Brazil. The Brazilian people didn't want to be clear cutting and decimating the rain forest, knowing that nothing valuable could be done with the land afterwards. Yet, these projects continue to roll on, financed by treasuries and governments from many of the developed countries around the world for somebody's idea that it would help them. Another point that we really haven't discussed too much this morning is the further in debt these underdeveloped countries get, then the more of their total income they are forced to pay to service the debt. This then requires them to grow food themselves when the economic record shows that they can usually buy corn and wheat and soybeans that were grown in Iowa much cheaper than they can grow them themselves in many cases. They could increase their standard of living, but are forced into a situation where, because of the huge debt, the people end up paying a higher price for the basics of life. Unlike Americans who pay 25 percent of their income, on the average, for groceries, they pay 95 percent of their income for higher priced food that we force them to develop and exclude our own agriculture machine from the opportunity to provide it for them. So, the interface of what happens is not only bad for the environment but, in some cases, bad for trade and bad for the living standards of the very people that we are trying to help. I want to thank all of you very much and thank all the witnesses and the agencies that prepared and helped us with this hearing and say a special thanks to Chairman Baucus for his willingness to participate and his obvious interest in this issue and his obvious grasp of what the issue is. I am very grateful. And, as he mentioned, Senator Durenberger is very interested in this, but because of his membership on the Finance Committee, couldn't stay here this morning. I think this is an issue that we will hear a lot about in the future, and I think we are going to need the guidance of many people, hopefully, including the U.S. Treasury to finalize what this amendment should be so that the goals of what the amendment can be would be appropriate and productive. On that note, this hearing is adjourned. [Whereupon, at 11:58 a.m., the subcommittee adjourned, to reconvene subject to the call of the Chair.] [Statements submitted for the record follow:] ENVIRONMENTAL ISSUES AND THE MULTILATERAL DEVELOPMENT BANKS Remarks by James B. Burnham Former U.S. Executive Director, The World Bank and Senior Vice President, Mellon Bank U.S. Senate Subcommittee on Hazardous Wastes and Toxic Substances June 16, 1988 Mr. Chairman, and other members of the Subcommittee, appreciate the opportunity to appear before you today to discuss various aspects of how the United States should I appearing here primarily in light of my three years service as the U.S. Executive Director at the World Bank, 1982-1985. However, my interest in the Issues surrounding economic development and finance the developing countries goes back to Πι undergraduate degree from Princeton and the Woodrow Wilson School of Public and International Affairs, a Fulbright Scholarship to study development ח ו Brazil In the early 1960S, and subsequent experience sector. חו the private Let me begin by emphasizing that I am not in a position to provide you an up-to-date schematic of exactly how the World Bank, ог the other development banks, factors environmental analysis into its lending decisions. There has been a substantial increase In the amount of time and resources that the World Bank devotes to these questions Since I left the World Bank in July 1985. Over 40 new staff positions have been created, and additional staff years have been added through the substantial However, 1 believe that the general consultancy budget. description of World Bank operations and the U.S. role which I am about to share with you should be helpful. The U.S.Role The World Bank 15 owned by its shareholder governments. Unlike many multilateral institutions, however, voting iS not оп a one-government, one-vote basis. Given the fact that it 15 & financial institution In the business of lending money, its charter prudently made sure policy. However, it would be a serious mistake to assume that we have an absolute veto over each and every activity carried out at the Bank. Nor should we strive to achieve such a position, for that could weaken the strength of the Bank in dealing with would-be borrowers and In mobilizing resources, when needed, from other contributors. On environmental Issues, while I was on the World Bank Board of Executive Directors there were frequent, useful discussions with staff as well as other Executive Directors, in both informal settings as well as at the formal deliberations of the Board. Such issues as deforestation the variety of Africa and the Amazon, air pollution, and ecological implications of flooding resulting from high dam construction were typical of the topics covered. governments for U.S. In terms of support from other expressions Ot interest or concern, I would say that the Nordic countries, particularly Sweden, were perhaps the most supportive. But as a general rule, there was a sense at the Board that if Bank staff had laid out for the borrower environmental Implications the or risks of a lending project which otherwise met basic economic rate of return critera, the Bank staff had properly performed its work. There was a proper reluctance to project into other countries the complex value judgements that are strictly domestic environmental frequently involved in controversies. The Lending Process There are a variety of routes by which an I BRD loan reaches the Executive Directors for decision. may have been gestating for several years In the various ministries or public agencies of a developing country. Other lending agencies or donors may have been solicited for expressions of interest. If the project involves importing equipment or advanced construction techniques, foreign suppliers may be active in promoting the project, both with the World Bank and member governments whose constituents stand to win export contracts. lending More recently, with a substantial portion of the program shifting into "structural adjustment lending" or "sector development loans," broader policy based Issues agricultural prices or import tariffs, for example |