Did the World Bank fund Karachi’s nullah evictions?
There are two little stories about international donors that everyone who lives in Karachi should know.
In 1994, the World Bank gave the Sindh government a roadmap to privatise Karachi’s water supply. It shortlisted international utility companies as possible private operators. They were International Water, Thames Water, Severn Trent Water, Générale des Eaux, Lyonnaise des Eaux and Enron. The KW&SB trade unions and civil society challenged the privatisation in court by 1999 and the entire process was frozen. The Sindh government formed a committee to look into the matter. It discovered that given the change of mood in the city, eventually even the World Bank lost its appetite.
The second story takes place in 1997. The Asian Development Bank wanted to loan Karachi 70 million dollars for a $100 million Landhi Korangi Sewerage Project. The Orangi Pilot Project team, including Arif Hasan and Perween Rahman, were left scratching their heads at how big the loan was. They sat down and took apart the numbers. When they finished, they discovered, and told the Sindh government, that the same work could be done in $20 million—one-fifth the cost. No foreign loan was needed. The Sindh governor cancelled the project in 1999.
The World Bank stayed away from Karachi’s main issues for roughly twenty years (aside from a few port projects, see list at the end).
The return of the donor dollar
When it returned in 2017, the Sindh government started to sign up for loans for
– Karachi Neighborhood Improvement Project (KNIP)
– Competitive and Livable City of Karachi Project (CLICK)
– Karachi Mobility Project (KMP)
– Karachi Water and Sewerage Services Improvement Project (KWSSIP)
– Solid Waste Emergency and Efficiency Project (SWEEP)
– Second Karachi Water and Sewerage Services Improvement Project (KWSSIP 2)
Today we are $1,078,000,000 in debt to it.
Ironically, just like in 1999, the World Bank is distancing itself from what is happening with one of its projects: SWEEP or the Solid Waste Emergency and Efficiency Project.
In a nutshell, urban flooding last monsoon propelled the government to start cleaning the city’s nullahs which drain rainwater away into the sea. Because these waterways are clogged, silted up and hemmed in by houses on both sides, their paths have to be cleared.
In November the scrapers appeared in Manzoor Colony at the Mehmoodabad nullah where a riot broke out. The administration abandoned the nullah widening and cleaning. NED University experts were brought in to map and survey “encroachments”. The demolition squads returned in January. Hundreds of houses were marked to be torn down. Civil society protests erupted. As people learnt that thousands of houses along Orangi and Gujjar nullah were next, the panic grew.
In January, over 250 concrete houses were razed at Manzoor colony. In February, work started at the other two drains. An estimated 3,000 structures at Gujjar and over 2,000 at Orangi are on the lists. The official line is that KMC is executing the plan with the help of district administrations.
The first installment of compensation to the families is Rs90,000 for six months based on an average of Rs15,000 in monthly rent. The total compensation is Rs360,000 for two years.
The retroactive financing mystery
SAMAA Digital acquired a copy of a letter that WB Country Director Najy Benhassine sent Chief Minister Murad Ali Shah on April 9 as a follow-up on one of their meetings. He referred to their discussion on the ongoing anti-encroachment drive and the government’s “plan to have a framework to guide development and equitable resettlement, and the implications for the World Bank’s continued engagement in projects in Karachi”.
They agreed that the framework to resettle and rehabilitate the people evicted by the nullah cleaning would be made in consultation with stakeholders, particularly those affected, and their representative organizations. That framework would be shared with the Sindh Cabinet by April 30 so it could be implemented by May 15.
“It was also discussed that under the SWEEP project, retroactive financing would only be possible if World Bank’s social and environmental standards are met, as stated in the project’s legal agreements,” Benhassine wrote. “In the absence of a Resettlement and Rehabilitation framework, future financing for cleanup of nullahs that are not affected by ongoing anti encroachment drive will not be an option under SWEEP.”
Benhassine concluded by saying that a senior mission would visit Karachi in the next two weeks.
The World Bank is now saying that demolition along the stormwater drains is not in any way related to or financed by any “WB-supported projects”. It is saying that SWEEP was approved in December and only became effective in March, so by that measure it was nowhere near the anti-encroachment operations.
The problem is that the people who have lost their homes and have nowhere to go have written the WB asking for answers. They have loosely organised as the Karachi NGOs Joint Action Committee and Karachi Bachao Tehreek.
They said they wanted proper resettlement and compensation and that the government had no proper plan. They told the bank that the Sindh government was using the WB’s name when demolishing their homes.
They were told that the WB had nothing to do with what was happening and that the bank did not support it either. In fact, WB-supported projects will be prohibited from financing any future investment on the affected nullahs.
SWEEP’s Project Director Zubair Channa told SAMAA Digital, for his part, as well that there was no connection. “Not even a single penny of SWEEP is being used on the current anti-encroachment drives on nullahs,” he said. “We have not initiated the project yet.”
He said the World Bank had just asked them to open a bank account a few days ago and the funds had not even been transferred yet. Channa, who is also the MD of the Sindh Solid Waste Management Board, said they had pointed out encroachments during a meeting after last year’s monsoon rains.
“It was decided at a Provincial Coordination & Implementation Committee meeting, last year that the encroachments over stormwater drains would be removed,” he said.
KMC senior officer Masood Alam added also that the WB had nothing to do with the work. It is being supervised by the National Disaster Management Authority, which pays the Sindh government to execute the anti-encroachment operation. He was not able to specify how much money.
A high-ranking government officer who worked on WB projects was able to tell SAMAA Digital that last year the nullah cleaning took around Rs280 million.
And what Zubair Channa is saying is true, except it isn’t the whole truth.
“SWEEP’s money has not been released yet by the bank,” said the high-ranking officer who worked on the WB projects. The project was indeed finalized and signed much later, on February 25, 2021. But: “Last year the nullah desilting and cleaning was done under SWEEP—it was decided that the government would provide the funds as the project was under discussion and later the funds would be reimbursed.” This method is called bridge-financing.
But this year, the WB backtracked over reimbursing the Sindh government over social concerns. “The bank is pissed off with the anti-encroachment drives,” said the officer.
If this is indeed true, it would explain why Benhassine used the words “retroactive financing” in his letter to the CM. Just to recall the exact words from his letter to the CM: “It was also discussed that under the SWEEP project, retroactive financing would only be possible if World Bank’s social and environmental standards are met, as stated in the project’s legal agreements.” (Our italics)
If Benhassine is referring to his discussion with the CM on “retroactive financing” we can assume that the Sindh government asked for it or the WB had offered it. This would be a large sum of money, running into the millions of dollars (SWEEP is $100m itself). It is hard to believe a government would ask to be reimbursed such a large sum out of the blue unless there had been some prior understanding with the donor.
So we asked the bank…
For what it is worth, SAMAA Digital put these questions to the World Bank. Had it agreed to bridge financing and backed out? “This is not correct,” the bank responded through its External Affairs Officer Mariam Sara Altaf.
But she went on to convey in an email: “In view of high flooding risks anticipated before the monsoon season in 2020, SWEEP included potential funding under Component 1 for the Government of Sindh to finance emergency cleaning of solid waste from nullahs in 2020. The scope of eligible activities under this Component 1 was limited to cleaning of solid waste clogging nullahs, transportation of dredged material to a disposal site, development of a disposal facility for the dredged waste, and interventions to reduce public dumping of waste into nullahs. Eligible interventions do not include any removal of encroachments around nullahs.”
She added that to be eligible for “potential retroactive financing”, the emergency nullah cleaning had to be conducted during the 2020 monsoon season (July-September, 2020) only. No funding was available under SWEEP for nullah cleaning beyond 2020.
“Accordingly, none of the activities conducted by the Government of Sindh under any of the 2021 anti-encroachment drives in the Gujjar nullah, or any other nullahs in Karachi, have been associated with, financed under, or conducted in anticipation of SWEEP.”
SAMAA Digital asked if the bank’s policy on forced resettlement would apply to a borrower like the Sindh government in case of any action taken under SWEEP in which people are displaced. It said it did.
“Yes. As is the case of all World Bank-financed projects, SWEEP was designed and will be implemented in accordance with the principles and requirements of the World Bank’s policies on involuntary resettlement,” Altaf wrote. This would seem like an admission of guilt, except that a study of the WB documents reveals that part of SWEEP involved displacing people—at Karachi’s landfill sites, which are part of the picture. So the bank can claim its involuntary resettlement was referring to this.
The missing connection
A long standing critic of the World Bank, architect and town planner Arif Hasan doesn’t buy this rhetoric. He argues that the ongoing work at the nullahs are part of SWEEP. For him the connection is simple.
SWEEP is for cleaning the nullahs which cannot be done without removing encroachments (houses), he told SAMAA Digital. “It is on this basis that I say the removal of poor houses through the anti-encroachment drives is a part of SWEEP,” he said. The authorities want KMC to do this dirty work of demolishing houses constructed on nullahs through anti-encroachment drives and then the nullahs have to be cleaned under SWEEP.
How are you supposed to clean drains without removing houses, he said. If you can’t then you have two options: either tell the Sindh government you’re taking the loan back since it is in violation of your policies or stop the project until you have a proper resettlement framework.
Hasan said that before the demolition began, the authorities had surveyed the nullahs. He described these (NEDUET) satellite surveys as unreliable as they did not factor in surveys on the ground. He says that even if the WB wanted to have its policies followed it would not have had the right data. The NED survey of the nullahs and housing along them did not include household numbers. “One building would have six to seven families,” he said. “It didn’t include the number of stories, family size. You can’t have a rehabilitation policy based on this report.”
He felt that if the bank respected its own rules and procedures it should cancel the loan to the Sindh government to remove garbage from the drains. “It is obvious that the WB will be a beneficiary in its SWEEP program from the activity being carried out on the nullahs,” he said.
He referred to the destruction caused in Saddar, which was also a World Bank project area for its Karachi Neighbourhood Improvement Project. “KNIP. What happened in the Saddar project area? Now you should say you won’t fund Saddar and take the loan back,” he said. The entire market and informal vendors around Empress Market were razed to the ground in that case.
But at the end of the day, the biggest elephant in the room, a concern overrides all others, is that you can desilt the nullahs but unless you ensure the exit points are clear, the water will still have nowhere to go. “Where will it go? Why have you not spoken about these things?” He is referring to the outfall in DHA, for example, where the Manzoor Colony-Mehmoodabad nullah ends. Its exit into the sea is choked. Why did SWEEP not address that?
Jekyll and Hyde WB and the cunning state
There is a lot of writing that criticises the World Bank. One useful study is by Shalini Randeria and Ciara Grunder The (Un)Making of Policy in the Shadow of the World Bank: Infrastructure Development, Urban Resettlement, and the Cunning State in India. And there is a book, Hypocrisy Trap: The World Bank and the Poverty of Reform by Catherine Weaver.
Weaver’s book is on the hypocrisy of the World Bank: the contradictions between its “organizational talk, decision, and action”. Take the example of its $225 million loan for dam in Uganda in 2001 which violated numerous of the bank’s own policies: safeguards against the involuntary resettlement of indigenous peoples, adequate assessment of the potential environmental impact, disclosure of information, a proactive consultation with local “stakeholders” (i.e., the affected population). If you ask the people who live along Gujjar, Orangi and Manzoor colony nullahs, you’ll hear the same story: evictions, a lack of information sharing, no discussions with the people of the neighbourhood.
Weaver says that the Bank’s harshest critics see cases like these as showing the “Jekyll and Hyde character of the Bank”. It “preaches sustainable, participatory, and accountable development while, in practice, doing whatever is necessary to get big loans approved and out the door as quickly as possible.”
Perhaps far worse than the hypocrisy that the World Bank is globally accused of, is the problem of the governments that it deals with. They are the ones, after all, who invite the bank in and take its loans. It is here that the work of Shalini Randeria and Ciara Grunder is helpful.
They studied one project: the Mumbai Urban Transport project. It involved four groups, the World Bank, the Mumbai Urban Transport Authority in the shape of the Maharashtra government, real estate developers and NGOs. They found that “a proliferation of policy actors leads to a dispersal of power and dilution of accountability”. People who suffered because of the project “seek in vain to hold the state and the World Bank accountable for problems of resettlement”. In the case of Karachi’s nullah cleaning exercise, the same is happening. This is why the Karachi Bachao Tehreek and JAC had to write the WB to ask why its name was being used during the demolition drive.
The World Bank and government had strategies to disavow responsibility for policies they decided together, Randeria and Grunder wrote. The World Bank took credit for the policy but not its implementation.
But most useful is their theory of the “cunning state” that makes it unaccountable to its citizens.
In Mumbai when people affected by the plan could not get their elected representatives to help, they went to court. The same is happening here in Karachi. In the Mumbai project, new highways and railway lines needed land from which people had to be removed.
The World Bank learned from its experience in the 1980s and 1990s with the Sardar Sarovar dam that displaced 200,000 people that it had to have a resettlement policy. The World Bank’s Operational Policy has to be followed by any borrower for a project that removes people. It says those people need to be consulted. Sally Falk Moore describes this as the command of aid conditionalities being couched in the language of contract. She called it the dance of the donor and the dependent state.
In the Mumbai case, the government was at odds with the World Bank. The World Bank said that anyone evicted or displaced should be compensated. But the government did not want to help people who it saw as “illegal encroachers” on land. This is exactly what has played out at Karachi’s nullahs. The cunning state remains a central actor in selectively transposing neoliberal policies to the national terrain and capitalises on its perceived weakness in order to render itself unaccountable to its citizens.
As things stand, the Sindh government appears to have received the memo that the WB is not having anything to do with its nullah cleaning. On Thursday, a handout from CM House announced that the government would cough up the cash itself. There are 298 nullahs in seven districts of Karachi which would be cleaned starting May 17. This will cost Rs316 million, of which the DMCs would spend Rs119 million and the remaining amount Rs 197 million could have to come from the Sindh government.
The anti-encroachment drive will continue. Roughly 5,500 houses will be torn down.
Published In SAMAA | Sohail Khan – May 6, 2021 Editing & Writing | Mahim Maher