Friday, April 20, 2007

Billions of $$$ earmarked for poverty alleviation in the developing world are used to subsidize large international oil corporations

What on earth (no pun intended) is going on here when large oil and other energy corporation that are already reaping record profits are subsidized by the World Bank through it’s oil development program. These rich oil companies would have done these projects anyhow as the world's oil and gas reserves are shrinking and they are all fighting for shares in the world’s decreasing oil reserves. Why then should the World Bank spend billions on these profit and market driven oil companies when this money could be far better spent on sustainable development projects helping those directly affected rather than causing further reliance of poor nations on large multinational corporations?

"Each year, billions and billions of dollars that should be spent on ending poverty around the world and improving the environment are being used to subsidize oil and gas projects in developing countries that lead to debt traps for those countries and an increase in greenhouse gas production."

-- U.S. Rep. Maurice Hinchey, D-N.Y, in a statement introducing a bill to Congress April 17 that he hopes will limit the World Bank's lending for oil development projects. He introduced the "End Oil Aid Act" in wake of news that the bank's lending for oil projects has increased more than 75 percent over the past year. The lending increase comes despite a recommendation from a stake-holder group for a phasing out of financing of oil projects by 2008, he said. "It is unfathomable that the U.S. and other wealthy countries would spend billions of dollars on subsidies for Big Oil when those energy companies are reaping record profits," Hinchey said.

(Source: Global Development Briefing)

1 comment:

Wes S. said...

I agree with you and Maurice Hinchey that if the World Bank is subsidizing big oil, that this is something of a travesty, but it is this type of government program started under the auspices of increasing the general welfare that results in pork and misallocation of resources.

Stating this money "should be spent on ending poverty around the world and improving the environment" ignores the fact that these well-intentioned programs would be no less duplicitous and ultimately wasteful, just as the famed "oil for food" program of the United Nations turned out to be a sham in which dictators and UN leaders padded their own wallets.

If governments will simply stand down, this petroleum fixation will soon pass, just as the coal belching railroads and methane laden waste dropped by horses became margingally inisignificant in the United States when the twentieth century hit full stride with automobiles powered by internal combustion engines.

The fact is that had massive government action been taken to subsidize horse breeding farms or limit the amount of methane produced from their shit on the streets, the car would still have run over the horse-and-buggy era.

How would Teddy Roosevelt have possibly understood how the twentieth century would evolve? Had he projected the increase in wealth in the United States, his best experts would probably have predicted each person owning a stable of horses, taxing agricultural resources and creating massive piles of shit. He wouldn't have assumed people would be listening to radios much less watching plasma televisions with color in High Definition or using home computers rather than riding horses all over the countryside for entertainment afforded by their new wealth. He would have been worried about the back injuries suffered by people carrying victrolas on their backs and the lengths of extension cords necessary to allow this, not having a clue how an iPod works today to carry a thousand records in the palm of your hand.

In an age of increasingly rapid change, do you seriously believe that the year 2107 will bear a closer resemblance to 2007 than 2007 bears to 1907?

The great hope of the world is not government bureaucracy, but yankee ingenuity. The devils you most fear, the oil companies, will either develop hydrogen cells or whatever the next great energy source proves to be, or they will shrink as the companies who come up with the better solution becomes dominant, regardless of whether or not government agencies cause some short-term disallocations of resources.