[OPE-L] Wolfowitz's world

From: Jurriaan Bendien (adsl675281@TISCALI.NL)
Date: Thu Apr 19 2007 - 17:13:53 EDT

Rightwing Foxnews is unpopular among unthinking leftists, but it had quite
an interesting clip on the World Bank on 31 January 2007:

(...) Personalities aside, the main problem is the World Bank's history and
structure. It is, after all, an open-handed lending agency where half the
governing board is made up of directors who represent borrowers - a concept
that would be unthinkable in a private-sector bank. "I can't recall a
borrowing country ever voting against a loan [to its own country], or
criticizing it, or voting against a budget," says one current top insider.
"We have no support reining in the budget."
Indeed, by most accounts, the borrower-directors mainly see their job as
simply getting as much money for their countries as possible - supervising a
global pork-producing machine, where everybody votes in favor of one another's
projects and nobody abstains from voting for their own.

"This reflects a genuine governance conundrum," says Robert Holland, a
Dallas attorney and former CEO of Triton Energy, who served as the U.S.
director on the World Bank's board from 2001 until last May. "On the one
hand, borrowers have a legitimate interest in the development prescriptions
handed down by the bank. On the other hand, no characteristic of the bank
that I have mentioned to my friends in the private sector produces greater
astonishment than the fact that half the board represents borrowers. Their
typical response upon hearing that is, 'My God, the inmates are running the

Holland remains a huge supporter of Wolfowitz's effort to try to put a lid
on corruption, which some experts believe taints more than 20 percent of the
funds the bank disburses every year - for a loss of $100 billion since 1945.
"His emphasis on corruption is the most serious challenge to the status quo
the lending culture has ever faced," says Holland.

Indeed, the problem is serious enough that even the World Bank itself has
acknowledged it. One internal review confessed that the bank had been
overtaken by a dangerous "culture of approval," where staffers felt heavy
pressure to push new loans out the door even when presented with
overwhelming evidence that the development projects were ill-advised.

One big problem is an utter lack of accountability for projects that
typically take long time spans to develop, implement and finally to measure
the results. "By then, the guy who originated the project is gone, and
governments in that country have come and gone, so there is no
accountability," says Holland, "If it goes wrong, they just blame it on a
previous manager, or a previous government."

Indeed, a World Bank development project evaluation in 2000 actually began
with the admission, "Despite the billions of dollars spent on development
assistance each year, there is still very little known about the actual
impact of projects on the poor."

The admirable battle against corruption would be easier if the board were
less secretive in its deliberations. Since Wolfowitz took over, there have
been two board votes on whether to loosen up its anti-disclosure policy.
Both efforts were soundly defeated by the vast majority of directors. Says
Transparency International's Nancy Zucker Boswell, whose organization is
working closely with the bank on its anti-corruption strategy: "You need
political will. We need the shareholders to agree to be more transparent."
(...)  http://www.foxnews.com/story/0,2933,248601,00.html

The FT adds:

The regions leaning in favour of Mr Wolfowitz are headed by officials
appointed to vice-president rank by him; the regions leaning against him are
headed by vice-presidents from the Wolfensohn bank. At the vice-president
level, the number of Wolfowitz appointees and Wolfensohn era executives is
roughly equal. At all other levels of management and staff, officials from
the Wolfensohn bank greatly outnumber the Wolfowitz appointees.

In Britain,

International Development Secretary Hilary Benn aspiring to higher office
later this year took aim at key elements of the Bush administration's policy
on Monday, rejecting its phrase "war on terror" as only likely to encourage
terrorists. http://news.scotsman.com/latest_uk.cfm?id=585232007 Mr Benn used
a keynote speech to criticise the [World] bank for concentrating on
corruption at the expense of its wider fight against poverty and disease. He
also threatened to withhold 50m of aid money from the [World] Bank unless
it showed proof that it had ended the practice of attaching tough economic
conditions to its grants and loans.


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