No jubilation at Jubilee over Eskom loan

The World Bank will bestow economic and environmental problems on South Africa through the granting of a US3.75 billion loan to electricity parastatal Eskom, social movement Jubilee South Africa says.

"The large size of the loan, as well as the signal that the granting of the loan sends to other lenders to make further loans, will have serious economic repercussions," Jubilee said in a statement.

It said the World Bank was now not only a designer of the country's social and economic policies, but a financier as well.

South Africa was standing at the threshold of the problems that the World Bank and International Monetary Fund (IMF) had bestowed on other southern countries for many decades.

The social movement said the sanctions campaign during apartheid had actually shielded South Africa from the damage that the policies of the World Bank and IMF caused in other countries.

"This supposed punishment was a blessing in disguise for post-apartheid South Africa, in that the country, unlike its counterparts in the rest of Africa and the South, had limited obligations to these agencies."

Jubilee said that while the World Bank loan to Eskom was being promoted as supporting development, "nothing could be further from the truth".

The loan was based on an intensification of coal-fired power.

"This requires the expansion of coal mining, entailing the further dispossession of people from their land," Jubilee said.

"Coal-fired power stations need highly purified water, but mining pollutes water, so people's water needs will also be sacrificed."

The local effects would be exacerbated by the impact of the loan on carbon emissions and global warming, the impact of which was felt disproportionately in the south as altered weather patterns impacted on agriculture.

"The privileging of capital-intensive power stations over more extensive small-scale renewable projects also impacts negatively on employment opportunities," Jubilee said.

Moreover, the negative impacts of local and global environmental destruction would be passed on to future generations.

"It is becoming increasingly evident to all that sustaining the environment and engaging in appropriate development go hand in hand.

"The collaboration between the World Bank, the government and Eskom towards the granting of this loan represents an attack on both the environment and the people."

Jubilee said it was on this basis that it opposed the loan "and, more broadly, any form of collaboration between South Africa and the World Bank".

Indeed, this loan is another glaring example of why the World Bank should be shut down, Jubilee said.