Manipulating Consent:The World Bank and Public Consultation in the Nam Theun 2 Hydroelectric Project

12 December 2004 by Shalmali Guttal , Bruce Shoemaker

The World Bank World Bank
The World Bank was founded as part of the new international monetary system set up at Bretton Woods in 1944. Its capital is provided by member states’ contributions and loans on the international money markets. It financed public and private projects in Third World and East European countries.

It consists of several closely associated institutions, among which :

1. The International Bank for Reconstruction and Development (IBRD, 189 members in 2017), which provides loans in productive sectors such as farming or energy ;

2. The International Development Association (IDA, 159 members in 1997), which provides less advanced countries with long-term loans (35-40 years) at very low interest (1%) ;

3. The International Finance Corporation (IFC), which provides both loan and equity finance for business ventures in developing countries.

As Third World Debt gets worse, the World Bank (along with the IMF) tends to adopt a macro-economic perspective. For instance, it enforces adjustment policies that are intended to balance heavily indebted countries’ payments. The World Bank advises those countries that have to undergo the IMF’s therapy on such matters as how to reduce budget deficits, round up savings, enduce foreign investors to settle within their borders, or free prices and exchange rates.

is currently considering providing financial support to o­ne of the most controversial projects in Southeast Asia, the Nam Non-Aligned Movement
The Non-Aligned Movement is a group of countries who, beginning in the 1950s, promoted a policy of neutrality towards the blocs led by the two superpowers – the USA and the Soviet Union –, who were by then fully engaged in the Cold War. In April 1955, a conference of Asian and African countries was held in Bandoeng (Indonesia) to promote unity and independence for the Third World, decolonization and an end to racial segregation. The initiators were Tito (Yugoslavia), Nasser (Egypt), Nehru (India) and Sukarno (Indonesia). The actual birth of the Non-Aligned Movement occurred in Belgrade in 1961. Other conferences would follow in Cairo (1964), Lusaka (1970), Algiers (1973) and Colombo (1976).
The work of the Non-Aligned Movement, which includes 120 countries, has had limited impact in recent years.
Theun 2 Hydroelectric Project in the Lao People’s Democratic Republic (Laos). Although the Bank has not yet publicly declared its decision to appraise the project - appraisal indicates that the project will be submitted to the Bank’s Board of Executive Directors for approval - it has been involved, both financially and institutionally, in the project for more than 15 years.

The World Bank funded the first feasibility study for Nam Theun 2, has helped the Government of Laos to appoint and finance a Panel of Experts to advise o­n the handling of social and environmental issues in the project and legal experts to negotiate financing arrangements, and has required the project developer to undertake social, environmental, economic and resettlement studies that have been instrumental in project preparation. The World Bank also required a “public consultation” procedure for the Nam Theun 2.

Source: Focus on the Global South (, september 2004.



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