Day By Day

Friday, June 03, 2005

Wolf at the World Bank

Paul Wolfowitz, one of the architects of Dubya's foreign policy and number two man at the Pentagon, has now become President of the World Bank.
WASHINGTON, June 1 (Reuters) - Paul Wolfowitz became World Bank president on Wednesday and said his agenda would focus on Africa, tackling corruption and making poor countries feel less sidelined in the bank's decisions.

There was an enormous cacophony of criticism when Bush nominated him several months ago, and for a while European nations were threatening to block him, but he was appointed unanimously. I worried that to get the post he would have to make significant concessions to his critics that would limit his freedom of action as President, but that seems not to have been the case.

The World Bank under previous president James Wolfensohn was far from careful in how its money was spent. The result was a lot of waste and corruption, both in Bank programs and in recipient nations, so much of it that Congress was threatening to take action against the Bank.
[L]awmakers led by Indiana Republican Richard Lugar, chairman of the Senate Foreign Relations Committee, are fighting to stamp out corruption in multilateral development bank projects.

Lugar has presented legislation that would encourage independent auditing and transparency and would set up a trust fund to help poor countries combat corruption on their own.
Wolfowitz has made it clear that the party is over and that strict accountability will be enforced, both within the Bank and in recipients of its funds.

To quiet his critics, Wofowitz has promised to be open to input from underdeveloped countries themselves in crafting Bank policies.
He said he wanted to ensure that developing countries that had complained to him about feeling alienated were brought into the decision-making of the bank.

Without saying outright he would give them a bigger role through management changes, Wolfowitz said, "I would like to work very hard at changing that feeling so that at the very least their views are brought in a serious way."
The key point here is that Wolfowitz has not specified any management changes, so it is unlikely that recipient nations will have any larger role in constructing policy than they had under Wolfensohn.

Wolfowitz also refused to issue any guarantees that World Bank policy would not be coordinated with US interests, and he specifically stated that the Bank had a role to play in reconstructing countries devastated by war [a clear reference to Iraq, although he included Congo and Liberia].
Wolfowitz indicated that Africa would be a major focus of his efforts. Under his predecessor Wolfensohn, the emphasis had been on aid to alleviate poverty, but now the Bank will focus on development.

To help Africa develop, Wolfowitz said, requires a plan that combines developmen assistance, foreign private investment, the development of the private sector and progress in trade talks so Africans can sell what they produce on world markets.

"New energy, new commitment and new realism is required and I, as president of the World Bank, am ready to help that great institution make a contribution and a keen effort" to eradicate poverty, promote growth and eliminate corruption.

Basically, Wolfowitz is conceding nothing of substance to his critics. The World Bank is in for a spate of reform efforts. It will be interesting to see just how successful Wolfowitz will be in reforming the organization and its practices; NGO bureaucracies are notoriously resistant to change. I wish him well.

Stay tuned....

Read about it here and here.

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