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 asylum.'" 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. http://www.ft.com/cms/s/f1f83f4c-ee04-11db-8584-000b5df10621.html 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. http://news.independent.co.uk/business/news/article1603945.ece Jurriaan
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