Education Policy

Impact of World Bank’s Policies: Barriers for Community Development and Education for Social Justice

World Bank and Community Development
World Bank and Community Development
Written by Web Editor

A Case Study on community development: “Ms. Setara Akter (17) of East Chorbata village of Subarnachar Upazila in Noakhali District was a student of class seven and his family consists of seven members. She was bound to stop her education in 2008 due to high expenses of education and educational materials, like book, paper and pen (Boi, khata, Kolom) etc. He was in frustration and very anxious about her future life (Asad, 2009a). This is nothing but the result of the conditionalities of World Bank in Bangladesh. World Bank imposed to reduce state expenditures on service sector including education; And as a result day by day poor people are getting unable to catch it and education is going to the hand of rich like other commodities (SUPRO, 2007). So, like Setara many students of Bangladesh are bound to stop their education. In 2002 the dropout rate in Bangladesh was 33 percent and in 2006 it was 40 percent; And day by day this rate is increasing. (SUPRO, 2007).


The World Bank is a vital source of financial and technical assistance to developing countries around the world (World Bank, 2009). The World Bank provides loans to developing countries for education, health, infrastructure, communications as well as in economic system reforms through it structural adjustment programs. The World Bank is an American-based organization with 184 member countries (World Bank, 2006).The World Bank was created at the Bretton Woods meetings in 1944 following World War II. The main goal was to rebuild post-war Europe and capture the world market. However, this organization now focuses on bringing developing nations into the international, free (open) economy. Proponents of the World Bank see it as a vehicle to alleviate poverty. However, critics suggest it actually creates poverty. (International Forum on Globalization, 2006).

It’s very true that in the traditional capitalist and male dominated society the ‘Development’ of developing countries is in trap. This is proved from the historical activities of World Bank and also the history of the suffered people of suffered countries. World Bank’s main agenda is to increase poverty and save the capitalist ideology in the name of community development and decreasing poverty (Rahi, 2005).

The Bank’s declared mission is ‘Global poverty reduction and the improvement of living standards’. But it is difficult to take issue with the Word Bank’s expressed desire for poverty reduction, education for all, community development and empowerment and so on. The problem is not its declared aims, however, but it deeds. As a major lender to indebted countries in desperate need of assistance, and with its practice of attaching specific conditions to its loans, the Bank has considerable power to dictate policy to Governments and choose which to reward and punish; in the exercise of this power, many criticisms have been directed at the Bank.

Historical role of World Bank in the name of development

In pressuring governments to accumulate money to pay back debts, the Bank forces them to cut public spending, even on basics like education, health and subsidies on the price of food. In the 1990s the results were often devastating, with education and health services collapsing in many countries, farmers being forced into deeper poverty through price falls and the urban poor being made increasingly desperate by cuts in food subsidies. In forcing governments to accept these so-called `Structural Adjustment Policies’, the World bank and the IMF have created a human rights catastrophe (Global Exchange, 2001).

The Bank promotes `free trade’ for poorer countries yet, in reality, this can mean that local producers of food, having had their subsidies removed, are forced to compete on the global market with highly subsidized producers from the `first world’. As happened with rice-growing in Haiti, this can destroy a country’s ability to produce its own food and makes it dependent on imports, the creation of dependency being arguably one of the Bank’s aims in the first place.

The Bank also pressurizes for the deregulation and privatization of a state’s economic activities, making economies attractive to foreign investors. As a result, the Bank’s policies clearly benefit multinational companies which then acquire control over large parts of a country’s economy. As Global Exchange (2001) put it, “for more than 50 years, the IMF and the World Bank have advanced a form of economic `development’ that prioritizes the concerns of wealthy lenders and multinational corporations in the industrialized north while neglecting the needs of the world’s poor majority. The institutions work as a kind of international loan shark, exerting enormous influence over the economies of more than 60 countries.”

The Bank’s practices can also undermine democracy by enforcing its standard economic recipe on countries regardless of what is decided through democratic processes. In Nicaragua the Bank and Fund have demanded that the country privatize its water resources-including its hydroelectric dams as a condition to further loans. The condition comes in the wake of legislation passed by the Nicaraguan National Assembly in August 2002, suspending all water privatization plans until a national debate on the issue takes place. By insisting on such conditionality, the Fund is undermining national democratic processes in Nicaragua. (Chavez Malaluan and Guttal, 2003, p.4).

World Bank (WB) at a glance (1944-2009)

1944: 45 countries signed an agreement in Bretton Woods, USA for creating international Bank for reconstruction and community development (World Bank) and International Monetary Fund (IMF).

1947: Netherland took 195 US Dollar loan from WB. Dutch government expended this amount to resist the fight for independence of Indonesia.

1956: WB fashioned International Finance Corporation (IFC) for joint venture with multinational companies.

1964: WB funded the hydro-electric plant in Thailand. As a result of this project, 30 thousand of people threw out from their own land.

1964: WB decided to give more loans in Brazil after military ruling.

1972: Romanion dictator Chosesku got huge loan from WB.

1973: WB bothered socialist leader Alende of Chili and after his diminishing WB strongly supported the dictator Pinosh.

1976: WB gave loan in Tarbeta dam project of Pakistan. As a result, 3 lac people ousted from their own land.

1979: Maknamara, the president of WB proposed for Structural Adjustment lending in the meeting of UNCTAD in Manila.

1980: The government of Bangladesh launched a mid-term structural adjustment programme in the mid 1980s.

1980: Turkey got loan under Structural Adjustment Programme (SAP) as a first country.

1984: As conditionality of SAP, WB-IMF proposed to increase the prices of fuel. As a result, people of Jamaica came to road for procession.

1985: As a conditionality of SAP, WB-IMF proposed to increase the prices of food and fuel; and people of Bolivia called for 15 days Hartal.

1986: WB-IMF formed Structural Adjustment Facility (SAF) for giving loan to third world countries.

1989: Transport bill and prices of fuel increased in Venezuela. People knocked together against this decision and three hundred died.

1991: As a part of SAP of WB-IMF, the government of Honduras privatized the national electricity company and people called hartal against this autocratic decision.

1994: WB established an Information Centre at Washington.

1995: The government of Papua Neugini started to work with some multinational companies as a conditionality of SAP.

1996: The government of Bangladesh complained to WB supervision team on Jamuna Bridge Project. But they corrected the project without any inquiry.

1996: The government of Bangladesh complained to WB supervision team on the debt of jute sector adjustment and they abandoned the project without any inquiry.

1996: WB and IMF decided to impose the conditionality of SAP for debt cancellation of the poor countries.

1999: WB and IMF decided to impose to his member countries the Poverty Reduction Strategy Paper (PRSP) for the national and community development.

2000: The government of Paraguay decided to privatize the Telephone, Water and Rail Company as a pressure of WB and the general people of that country called 48 hours hartal all over the country. (Rahi, 2005).

2003: In March 2003, Bangladesh produced the National Strategy for Economic Growth, Poverty Reduction and Social and Community Development, titled to I-PRSP.

2005: The Government of Bangladesh produced the draft PRSP (PRSP-1) on 12 January 2005. PRSP was submitted to the Executive Committee on the National Economic Council (ECNEC) on 18 October 2005. (LCG Bangladesh, 2005).

2009 : In Bangladesh Equity and Justice Working Group along with 14 other right based organizations organized a mass meeting and rally on 24th August, 2009 at capital’s Shagbagh area protesting them conspiracy of the establishing authoritative role of the World Bank on the Management of country’s Multi Donor Trust Fund (MDTF) for climate change adaptation.(Equity BD, 2009).

2009: On 1st September, 2009 in Bangladesh Several right based organization criticized and condemned role of DFID and British Government as they are creating pressure to the government for accepting authority of the World Bank on the management of country’s multi donor trust fund. (Equity BD, 2009).

2009: The government of Bangladesh is set to start implementing second amended Poverty Reduction Strategy Paper (PRSP-2) from early next year after finalising the procedure by December. (BD, 2009).

How the World Bank stands against people

For more than six decades the Breton woods giants like World Bank and the International Momentary Fund (IMF) has aggressively done lot of misdeeds in the world which affect people’s life and livelihood. Though there remains a huge critique on the WB and IMF, hardly there is any profound response from the Bank and the Fund. Not only critics, people around the globe raised many concerns on the anti-people and damaging role of WB and IMF which caused innumerous problems to people around the globe particularly in the poorer countries through imposition of policies and conditionalities in the field of community development. Increasingly WB and IMF along with their allies such as multinational companies (MNCs), WTO, and the US led domination create the premise of corporate globalization including the neo-liberal hegemony often been criticized as anti-people for their imperialist and capitalist roles. The policies of the Bank and Fund play role in line with the US militarization and war on terror while it unexpectedly influence over economic sphere of a country including political process as well to the spheres of social, cultural and indigenous knowledge and practices. The dominating role undermines common human aspirations and ultimately goes against the democratic sphere creating injustice and inequality in the society. The economic governance of the world is controlled by the WB, IMF and big MNCs that work for maximization of their profit even sucking human blood. And for their unjust and undemocratic role voices are being heard against Bank and Fund.

Since the inception of the Breton woods giants, the very nature of their roles and functions indicate the authoritarian regime, which only keeps the interest of the riches, multinational companies of the rich nations and acts against the people’s interest. The evidences, theories and practices clearly show that the lending agencies control the way and means of livelihood of the communities of the world. The policies formulated by the financial institutions go in favour of the multinational companies that constitute the market as a whole in line with the policy frame of WTO, MNCs and US dictations. Unfortunately, the economy of our country is controlled by a few international institutions like the World Bank, International Monetary Fund and the ADB, that provide us with external loans and grants in the name of accelerating community development. But at the same time, they intervene into the very many stages of administrative framework of the country including the economy and politics.

The history of the present framework of foreign aid dates back to the Second World War when different organizations were established to help the post war reconstruction. Paradoxically, in many places like Micronesia, Bangladesh, India, Egypt, Haiti, Guatemala, Kenya and others, aid has in reality, put an end to the possibility for sustained economic growth by driving local producers, particularly farmers, out of business, instead of coming to their aid, giving rise to unlimited corruption. As regards Bangladesh, despite receiving almost 20 billion US dollars in aid since its independence in 1971, the country remains one of the poorest and most corrupt nations of the world.

Donor agencies always suggest privatizing as a means to reduce poverty. Japan has identified 12 priority sectors, including the private sector and power sector, under its new country assistance program. The priority sectors are information and communication technology, tourism, transport, agriculture and rural community development, education, health environment etc. Donors always choose those sectors that can promote their business.

In October 1974, under the direct supervision of the World Bank, Bangladesh Aid Group was formed, comprising 26 donor agencies as well as countries that made the commitment of providing US$551 million in aid in FY1974. Aid to Bangladesh has remained at a high level since the consortium came into existence, although with substantial fluctuations in new commitments from year to year. After the high initial commitments, the figure fell to US$ 964 million in FY 1976 and to US$ 744 million the following year, before turning upward again. Fiscal year 1979 was another breakthrough period, with new commitments of nearly US$1.8 billion, a figure surpassed 3 years later when the level reached US$1.9 billion, the all-time high through FY 1987.

The third largest debtor country of the World Bank, Bangladesh has been provided with credit assistance totaling nearly $20 billion by the IDA since 1973, the year the country joined the WB, with the surprising result that the ‘aid’ could not do anything substantial to its still remaining stigmatized as one of the poorest countries of the world. The WB provides most of its loans for a specific project or for one which is based on one or another particular strategic policy such as Structural Adjustment Programmes or SAPs the main policies of which have been:

1. Massive privatization of industries and major utilities, e.g., water, electricity, gas, railway, ports, etc.

2. The blanket application of the ‘free market policy’ which actually means a unilateral canceling of all tariff and non-tariff restrictions by the country on the receiving end of the loans.

3. Withdrawal of all types of subsidies for the sake of ‘Efficiency’.

4. Drastic cuts in government spending in order to ensure so-called ‘macro stability’ of the economy.

In the mid eighties, when Bangladesh was under a military regime, the SAPs started to be introduced here, resulting in the disintegration of a number of industries including Adamji Jute Mills. Bangladesh Petroleum Corporation (BPC) has still been under tremendous pressure of being privatized, and so has been the Chittagong Port, the purpose of all this being putting the oil, gas and energy sector of the country at the mercy of the large multinational companies (Mahmud, 2009).

The World Bank imposed conditionality in education, health, agriculture as well as natural resources of Bangladesh. They suggested withdrawing subsidization on agriculture so that the production costs of farmers are increased. These farmers are competing with the farmers of other countries who get subsidization, and they are getting poorer from poor. Finally they have developed themselves dependent on hybrid seeds, fertilizers and insecticides of multinational companies (SUPRO, 2007).

There are two types of health services in Bangladesh, one is for poor and marginalized; and another for the rich. The elite persons and the ministers or bureaucrats are captivating health services from Apollo or this type of hospital; on the other hand the lower class or poor people are dying without treatment. The state is emphasizing on private investment and increasing health expenses day by day without considering the general condition of the rural people. (SUPRO, 2007). Very recently Bangladesh Government privatized all the community development such as clinics, and now it is out of reach for the rural poor.

So, it can be easily said that the World Bank is not a politically neutral community development agency. As one of the World’s ruling financial institutions, the power of the World Bank lies with the governments of the richest countries, particularly the USA, and its policies and practices are grounded in a particular political economic ideology, which happens to serve their own particular interests, known through most of the world `neoliberalism’. The World Bank has four pre-prepared steps:

(a) The first is privatization of national assets, like water and electricity, though given their sale at knockdown prices in return for `commissions’, it is more accurately called `briberisation’. Multinational companies can then come in, buy up these assets and take control.

(b) The second is `Capital Market Liberalization’, allowing investors to transfer money between countries without impediment: when they decide to take money out `at the first whiff of trouble’ it can drain a country’s reserves, cause interest rates to rocket and demolish local economies.

(c) Third is `Market Based Pricing’ or the removal of subsidies on basics, like food: market policies can be abandoned, however, if banks, as opposed to people, need to be bailed out.

(d) And the fourth is the Bank’s `poverty reduction strategy’, is so-called `free trade’.

The World Bank and Education for Development and Community Development

The role of education is to build the nation and making linkages with knowledge and empowerment. It is true that education directly influences politics, culture and economy of a country. Ideological influences play a crucial role in shaping our educational framework. But in Bangladesh, discussion and thought on education are limited in an apolitical discourse. In popular thinking and practice, education is assumed as a neutral phenomenon. It is not analyzed in relation to colonialism, globalization, cultural imperialism, nationalism and other political issues alone. It is though campaigns and educational initiatives are enough to establish a people oriented educational system. That’s why our educational system is not encountering any criticism and resistance and thus, is being used as a tool of post colonial neo liberal power.

As global capitalism acts as the driving force for rapid transformation in education sectors, the process of globalization and the policy divide have impeded creation of a complete and comprehensive education system in the country. These rapid neo liberal reforms present a weak linkage between knowledge and empowerment making education inaccessible and dearly. The educational divide has given rise to an inward, concentric and conformist pattern of knowledge generation and dissemination, where diversity and inclusiveness of education remains reclusive and empowerment and socio economic growth becomes a far cry (Asad, 2009b).

Understanding the political, economic and ideological background to the Bank’s work is important in making sense of its activities in education for development. On the basis of its ideological underpinnings, a key aspect of the Bank’s view of education is that it should be responsive to the needs and demands of the global market economy. On its education website, it states that education is about `building dynamic knowledge societies that are key to competing in global markets’ (World Bank, 2006).

As with everything else in the Bank’s vision of the `Knowledge economy’, it generally wants to see education privatized, deregulated and marketized (Levidow, 2002, p. 7). As it states in a report on its `reform agenda’ for Higher Education, `the reform agenda…. is orientated to the market rather than to public ownership or to governmental planning and regulation. Underlying the market orientation of tertiary education is the ascendance, almost worldwide, of market capitalism and the principle of neoliberal economics’ (Johnston et al., 1998).

During 1990s when primary education was liberalized and as a result of this, privatization in primary education was increased on one hand while quality of public primary education was deteriorating on the other, no serious attempt was taken to unearth the underlying politics behind this. As a result, private provision increased drastically and primary education reduced to NGO activities; furthermore, to a commercial product. As a part of this process, public primary education system had turned into a ‘guinea pig’ for WB and IMF, which has resulted into an inefficient, inactive educational system.

On the other hand, since 1990s, privatization in higher education has been initiated and as a result, private sector has become dominating in the field of higher education for the last few years. The issues of public welfare and state responsibility remained out of analysis too. This is due to our misunderstanding to the approach of education.

Now the government is under consideration of implementing a Strategic Plan for Higher Education in Bangladesh 2006-2026 which will discharge the autonomy of higher education. This would further privatize and commercialize the higher education sector making it out of reach for the poor. These policy shifts will instill neo liberal reforms in education replacing the colonized educational reforms that will keep pace with the ever changing western order of community development needs. The ongoing changes in our education sectors do not reflect the people’s experiences and aspirations (Asad, 2009).

Society is fundamentally unjust and education should have an open, political commitment to work with the victims of social, political or economic injustice in their struggle to bring about progressive social changes. Among many of the ideas key to education for social justice are that in addition to what can be offered by `experts’, the knowledge held by ordinary people is important, people should develop the ability to think critically, they are potentially if not already capable of becoming `subjects’ rather than `objects’ of change and they should be encouraged and enabled to do so. The same ideas are at the heart of transformative approaches to community development (Fraser, 2005). Some agencies ostensibly dedicated to community development are also seen as pioneers in education for change, such as the Mexican Institute for Community Development, one of the best known popular education centres in Latin America (IMDEC, 2009).

What is education? What is it’s relation with the state, politics, power and people? In Bangladesh we don’t have any appropriate analysis of education as we don’t relate these political questions with our educational analysis. This is why, our education policy failed to be mass oriented; in contrast, it has been working as a discrimination producing tool, keeping the discrimination politics active (Asad, 2009).

It is very difficult to be acquainted with the nature of World Bank and also crucial to understand where power lies within the Bank and that a particular political-economic ideology drives its activities. The Bank gives loan for schools in poor countries, while destroying schooling worth many times this amount by insisting on cutting public spending to repay debts. It can be easily said that the Bank’s role is-`First they break our legs, then, by way of compensation, they offer us a pedicure’.


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