New Internationalist

The energy tug-of-war

November 2004

More evidence of how the World Bank teams up with profit, not the poor

Photo:<b> <b>Ami Vitale / Panos/
Many Indians remain unconnected to the power system but the World Bank is offering no strategies that would help increase poor people’s access to electricity. This mosque in New Delhi is silhouetted against power lines that have been hacked into in order to steal electricity for the energy-poor. Photo: Ami Vitale / Panos/

When the World Bank finances oil, gas and coal projects, it wades into a global energy tug-of-war. Pulling on one side of the rope are the world’s poorest: the nearly two billion people whose basic energy needs remain unfulfilled. Political and economic powers hungry for profit tug against them.

For years, the World Bank has been faced with mounting pressure to accept accountability for the impact of its investments in the Majority World. In response, World Bank President James Wolfensohn pledged in 2000 to undertake a review of the World Bank’s support for the extractive industries (oil, gas and mining).

The Extractive Industries Review (EIR) reported in January 2004. It concluded that World Bank support for fossil fuel and other mining projects simply doesn’t alleviate poverty, which is the World Bank’s stated mission. After spending millions of dollars for an independent team of experts to evaluate the effects of its energy lending, the Bank brushed off most of the final report’s recommendations. Instead, its management and board of directors opted merely to endorse minimal commitments to change the way the Bank does business. Pivotally, it pledged to provide indigenous peoples and affected communities with ‘consultation’ instead of the recommended ‘consent’ before the Bank backs projects on their lands. It also pledged to measure the poverty impact of bank lending; but the poverty indicators will be developed at some later time.

The Bank’s rationale for continuing to subsidize oil companies is that people in developing countries need energy. However, research by the Institute for Policy Studies demonstrates that 82 per cent of all oil projects that the Bank has invested in since 1992 – the year of the Earth Summit – are primarily designed for export of oil to the United States, Western Europe, Canada, Australia, New Zealand/Aotearoa and Japan. The Institute has also calculated that the largest number of procurement contracts for World Bank fossil fuel extractive projects go to some of the largest companies in the developed world: Halliburton, Shell, ChevronTexaco, Total, and ExxonMobil, in that order (see ([ Facts], ([NI 361]). With or without the World Bank’s involvement, energy systems based on fossil fuels will eventually become obsolete. The only question is how soon, and how much damage will be endured – particularly by the poorest – in the meantime. By ignoring the recommendations of its own report, the World Bank has declared itself to be more concerned with the needs of oil companies than the impoverished people it is officially supposed to serve.

Latin America co-ordinator for the Sustainable Energy and Economy Network (SEEN), a project of the Institute for Policy Studies in Washington DC. For further information, visit

Front cover of New Internationalist magazine, issue 373 This column was published in the November 2004 issue of New Internationalist. To read more, buy this issue or subscribe.

Comments on The energy tug-of-war

Leave your comment


  • Maximum characters allowed: 5000
  • Simple HTML allowed: bold, italic, and links

Registration is quick and easy. Plus you won’t have to re-type the blurry words to comment!
Register | Login

...And all is quiet.

Subscribe to Comments for this articleArticle Comment Feed RSS 2.0

Guidelines: Please be respectful of others when posting your reply.

Get our free fortnightly eNews


Videos from visionOntv’s globalviews channel.

Related articles

Recently in Currents

All Currents

Popular tags

All tags

This article was originally published in issue 373

New Internationalist Magazine issue 373
Issue 373

More articles from this issue

New Internationalist Magazine Issue 436

If you would like to know something about what's actually going on, rather than what people would like you to think was going on, then read the New Internationalist.

– Emma Thompson –

A subscription to suit you

Save money with a digital subscription. Give a gift subscription that will last all year. Or get yourself a free trial to New Internationalist. See our choice of offers.