10
The World Bank and the
Third World Debt Crisis
It is striking that the World Bank has no department that conducts
after-the-fact analyses of its forecasts in order to determine how
accurate they have been and, if necessary, what corrections could be
made in future.
Its nonchalant attitude towards Third World debt is very revealing.
It is nonchalant, but not entirely unaware of the problem. Indeed, as
far back as the beginning of the 19 70s, McNamara felt Third World
debt was a problem. He wrote:
By the end of 19 72, the debt totalled 75 billion dollars and annual
servicing was more than seven billion dollars. Debt servicing rose
by 18 per cent in 1970 and by 20 per cent in 19 71. The average
rate of increase of the debt since the 1960s has been almost twice
as high as the rate of increase in the export revenues that these
countries must use to service the debt. This situation cannot
continue indefinitely. (McNamara, 1973)However, as a result of its policies, the World Bank actively
contributed to creating the conditions that led to the debt crisis.
It would be wrong to suggest that there has been some kind of plot
deliberately hatched by the Bank. The World Bank is one of the guilty
parties, but it did not premeditate the crime. Once the crime had been
perpetrated, however, it fully profited from it in both the figurative
and the literal sense. The Bank has raked in profits on the backs of the
indebted countries and seen its power grow by leaps and bounds.
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