Discussion Summary:

In Mozambique, left-leaning policy planners tried to create a model society. Unfortunately, too much idealism led to poor outcomes.

In Bangladesh, John had worked in a small village that flooded every year. When the government proposed building an embankment, he argued against the project, believing that it would only benefit the wealthy. Various environmental NGOs also criticized the embankment project. Decades later, he returned to find the embankment in place and the lives of local people greatly improved.

With respect to infrastructure, one must discriminate between middle income and low income countries. In middle incomes, the highest returns are found by improving management. However, in low-income countries the highest returns are found in simple infrastructure investments.

• In a World Bank study on a dam in Bhaka, although the rich benefited from the dam, the poor benefited proportionately more.
• The borrowing countries want to develop more infrastructure.

The World Bank bureaucracy is very difficult to navigate. Only middle income countries can afford to hire experts, while low income countries simply cannot manage the paperwork. The World Bank also spends too much time on “flavor of the month” projects and lacks a long-term vision.

Asian agriculture is entering a new era. Its dependence on groundwater cannot continue, and the region must invest in surface water networks. Unfortunately, the states in this region remain too weak to implement such ambitious plans.

Lessons for donor countries

• The dynamics of aid are changing with the rise of the BRICs
• The views of post-affluent NGOs should be taken lightly
• Respect and build good governance
• Give technical help when needed, but respect the capacity of developing countries

Lessons for developing countries

• Invest in R&D
• Use biotechnology
• Do not discount the value of large projects
• Look for help from the middle income countries