World Bank Needs to Make Infrastructure Work for the Poor
Kikwit is a town of almost one million people in the Democratic Republic of Congo (DRC). Its inhabitants have no access to electricity. Because the water pumps are no longer working, they have no access to clean water either. In the 1990s, the town made news through an outbreak of the deadly Ebola virus, which was helped by the poor sanitary conditions.
Kikwit is not located at the end of the world. It lies underneath the power lines of the Inga dams on the mighty Congo River. Yet the electric current that hums overhead is not meant for poor people. It is exported to the mining companies in the southern Katanga province. Over the past decades, billions of dollars have been invested in the DRC's power sector. They have created a stark energy divide: eighty-five percent of the country's electricity is consumed by energy-intensive industries, while 94 percent of the population has no access to electricity.
There can be no prosperity without infrastructure. But infrastructure has many faces: it supplies water to poor communities and irrigates golf courses, builds local access roads and bridges to nowhere. The example from the Congo Basin demonstrates that infrastructure investment can bypass poor people completely for the benefit of powerful interests. Globally, more than one billion people live without access to clean water, sanitation, and electricity.
In recent years, infrastructure has one again become a buzzword of the international development debate. The World Bank and the powerful Group of 20 have prepared new strategies for the hardware of development. They propose to concentrate investment on large projects with private participation such as big dams and transport corridors that can transform whole regions. They have identified the Inga hydropower scheme on the Congo River as an exemplary project for their new approach. At a cost of $80 billion, this project would produce electricity for export - and perpetuate the DRC's energy divide in the process.
The strategy of the World Bank and G20 will generate contracts for global corporations, financing deals for big banks, and opportunities for politicians to cut ribbons and bag some kickbacks along the way. Yet by hoping that social and economic development will trickle down to poor people such as the inhabitants of Kikwit, it ignores the lessons of past experience.
A new report by International Rivers demonstrates that a different approach is available. Most rural poor in Africa and South Asia - the epicenters of global poverty - live closer to local sources of renewable energy than to the electric grid. The International Energy Agency proposes that 70 percent of the investment needed to provide energy for all should go into local mini-grids and off-grid solutions such as micro hydropower, solar, and wind. The cost of these technologies has fallen rapidly in recent years. High-quality solar lanterns light family homes and charge cell phones at less than half the cost that poor consumers pay for dirty kerosene and candles every year. Yet the markets for poor consumers don’t work properly, and new technologies are often not available where they are needed. This is where the World Bank and other donors should come in.
Promoting clean, decentralized energy solutions will not only provide access for people that have been left in the dark for too long. It will also boost local economic sectors such as agriculture, agricultural processing and tourism, which are important for broad-based job creation. It will reduce the social and environmental footprint of energy projects. By diversifying and decentralizing supply, the same approach will make energy sectors more resilient to the vagaries of climate change. It will also strengthen the institutions of local governments and civil society, which are often overwhelmed by large, top-down infrastructure projects.
In July, a new World Bank President will take office. Dr. Jim Yong Kim has made great contributions to improving public health by empowering poor local communities. A similar change of course is called for in the infrastructure sector. The World Bank should shift its ample resources - its lending, guarantees, technical assistance and policy advice - from the top-down projects of the past to the bottom-up solutions of the future. The new presidency offers an opportunity to finally address the global infrastructure divide.