James Bovard (editorial page, Sept. 30) argues that World
Bank loans reinforce government control over the economy of
Third World countries. In fact, most adjustment loans,
including those to Morocco, Chile and Ecuador, have been
conditioned on dismantling controls or improving efficiency
of public-sector management. They aim at increasing
competition and helping private-sector activity.

The parallel claim that the Bank has been the force behind
nationalization of oil and gas is just as unfounded. For
example, the $92 million loan to Yugoslavia was made to three
companies, none of which is owned by the government; the loan
to Pakistan was not for the national oil company but mainly
for power generation. The Bank will simply not finance any
energy scheme which the private sector is willing and able to
take on. In energy, as in other sectors, our advice is to
facilitate the involvement of private enterprise. In most oil
and gas ventures, the Bank has been a catalyst for major
private-sector participation.

Mr. Bovard criticizes the limited share of lending to
Africa and the high rate of growth of lending to communist
countries. In fact, in fiscal 1985, lending to Sub-Saharan
Africa from the Bank and its affiliates was about 11% of
total lending. But Africa's share of lending by the
International Development Association (IDA), the Bank's
concessional lending affiliate, was about 36%. Many
Sub-Saharan countries can't afford to borrow from the Bank,
which lends at market rates. They depend on highly
concessional sources such as IDA. Such funds are scarce, but
the Bank has recently made a successful effort to increase
concessional finance for Africa by mobilizing an additional
fund of $1.2 billion from its members.

Except for the special case of China -- a new member whose
entry into the World Bank signaled major policy reforms
toward liberalization in that country -- total lending to
centrally planned economies has actually declined. The real
point, however, is that Bank statutes prohibit political
considerations.

Mr. Bovard criticizes support for transmigration projects
in Indonesia and settlement projects in Brazil. In both
countries, extraordinary population pressures in heavily
settled areas have caused major environmental and social
problems. Most development experts see the necessity of
facilitating the movement of people to sparsely populated
areas. World Bank assistance has concentrated on improving
management by the governments.

We agree with Mr. Bovard that we should be judged not only
by what we say but also by what we do. We are the first
international development agency to have set up an
independent system of economic audit for our activities. The
Operations Evaluation Department (OED) reports directly to
our directors, representing the member countries. OED
assesses the outcome of every project financed by the Bank.
These evaluations confirm that about 90% of the projects
financed by the Bank have been successful.

The Bank focuses on poverty alleviation anchored in sound
policies. The Bank, its concessional affiliate, IDA, and its
private-development-finance affiliate, the International
Finance Corp., neither have the mandate nor are equipped to
police human-rights violations. But their record in helping
the poor and in liberating the creativity and enterprise of
developing countries is not fully seen by the public. And yet
it is directly relevant to the public because the Bank
contributes to economic growth, and growing markets in Third
World countries mean greater exports and more jobs in
industrial countries.

H. Martin Koelle

Acting Information Director

World Bank

Washington