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ISSUE 121 VOL 15 PUBLISHED 3/21/2008

World Bank scrutinized

By Aaron Rozanski
Associate Editor

Friday, March 21, 2008

Sustainability and development were the hot topics in the Sun Ballroom on Monday night as University of Minnesota professor and McKnight Presidential Fellow Michael Goldman delivered his informative lecture, "The World Bank, Global Poverty, and Bangalore, India."

By spending a year living in Bangalore, India, located in the southeastern part of Karnataka, Goldman encountered the results of World Bank actions on developing nations first-hand.

"I was quick to learn that around 75 percent of the city's gross domestic product (GDP) was generated from local, family owned businesses," Goldman noted. "This is changing rapidly with the cities' expansion and globalization, and will only continue to do so."

At the current rate of development, the city of Bangalore is set to grow to 8,200 kilometers within a few years and will eventually become the world's largest city. However, Goldman was quick to shift his attention to the perspectives of the citizens of Bangalore and the importance of social justice.

"Local livelihoods will need to be destroyed to accommodate for the cities growth and all these new businesses," Goldman said. "And ever since these companies have been arriving, the income inequality has only increased."

Much of the push for offshore operations from American companies comes from the booming information technology industry, which has contributed to making the city of Bangalore the Silicon Valley of India. Goldman discussed the effects of globalization and the role of corporate ethics, in particular that of these IT companies that seek lower taxes.

"The way that the city entices these companies is by having lesser to no taxes," Goldman noted. "But there are roads that must be built and water resources distributed that all need funding, and the government often has to foot the bill."

Goldman used the city of Bangalore to paint a picture of how the World Bank is involved with not only how much the nation develops, but the manners in which they do so.

"There are plans to bring in a New Jersey corporation to invest one billion dollars for road construction," Goldman stated. "This will displace about 20,000 people from their homes, and only about 20 percent of them will receive compensation."

The specific research presented by Goldman was geared toward poverty-reduction policies and the necessity of sustainability in practice from the World Bank. Since much of the development efforts are for the use of the companies, it leaves little decision-making ability in the hands of the government, and ultimately of the people.

"There is too much land that is being set aside for these IT companies, and thus it can only be profitable if it is used for these corporations," Goldman said. "The World Bank must focus on providing infrastructure that will be a catalyst for the whole country."

The example of Bangalore and the insights Goldman offered from his time there helps illustrate the crucial impacts that the decisions of bodies like the World Bank can have on a nation's path to development.

"One problem with the World Bank is the belief that a developing country should focus on certain cities to become globally competitive," Goldman stated. "They do not see the need for giving money to the governments themselves." The issues of industry globalization, offshore investments and the role of corporate ethics are core themes in contemporary political dialogue. Bangalore, India and its place within the rapidly expanding IT industry is just one example of how these issues affect citizens of all nations.

The event was co-sponsored by the departments of sociology and anthropology, economics and political science, and also the faculty of social services and Omicron Delta Epsilon. It continues St. Olaf's 2006 -- 08 theme of Global Citizenship.

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