World Bank’s Destructive Policies About Shrimp Farming Endanger Communities in Developing Countries

April 18, 2005

World Bank’s Destructive Policies About Shrimp Farming Endanger Communities in Developing Countries

Public Citizen Releases Final Report in Its ‘Pharmed Shrimp’ Series, Focuses on International Finance Institutions’ Role

WASHINGTON, D.C. – For the past 30 years, millions of dollars in development aid has been funneled into shrimp farming, with the intent of improving impoverished conditions along rural coastal areas in developing countries. But in reality, shrimp farming has damaged the very communities for which it was meant to be a savior, said Public Citizen today as it released its fifth and final report, part of its Pharmed Shrimp series, as the annual World Bank/IMF Spring meetings in Washington, D.C., come to a close.

The latest report, Fishy Currency: How International Finance Institutions Fund Shrimp Farms, is available by clicking here. Shrimp aquaculture uses an intensive factory-farming model, and most shrimp farms are in Southeast Asia and South America, where labor and environmental standards are considerably weaker than in the United States.

Since the 1970s, development banks such as the World Bank, the International Bank for Reconstruction and Development, and the Asian Development Bank have dumped money in the form of loans or direct aid into many countries to build large aquaculture sites and processing facilities.   Early on, funds to promote and expand shrimp farming were targeted primarily at Asian countries such as India and China, but also to several countries within Latin America, particularly Ecuador.

“After 25 years of investing in shrimp farms, these banks refuse to acknowledge that shrimp farming contributes to the export-oriented economic model that drives countries into further poverty instead of elevating them,” said Andrianna Natsoulas, field director for the shrimp campaign at Public Citizen. “This vicious pattern creates larger divides between the rich and poor and deprives communities of the right to determine what is best for their own lives and livelihoods.”

For example, Ecuador was an early recipient of international development money as well as private investment from foreign investors. Between 1979 and 1985, shrimp farms grew 20-fold, thanks in part to an increased demand from consumers in the United States and Japan and loans from development banks. Members of the Ecuadorian government, including the president, were early investors in this industry. In total, the World Bank financed $956 million in loans to Ecuador between 1980 and 2000, much of which was targeted for shrimp aquaculture.

The World Bank claims that shrimp farming is a good investment because it provides food security to native people. However, most of the shrimp is exported to first-world consuming countries such as the United States, Europe and Japan. This was true of Ecuador. Further, Ecuador’s coast lines are now littered with both abandoned and new shrimp farms. 

The report concludes that the immense influx of development money has contributed to the decline of many of these countries, rather than improving their conditions. With damaged coastlines, many communities are left without any opportunity to find work. Coastal ecosystems are not regenerating after the massive clearing of mangroves, leaving permanent environmental damage.

“The development banks and agencies continue to support shrimp farms through emergency aid, as was the case in the December 2004 tsunami in Asia. They only perpetuate the problem, while coastal communities are relocated inland, far from the ocean, upon which they depend,” said Natsoulas. “Public Citizen calls on the international finance institutions to stop funding aquaculture expansion and maintenance.”