EU Referendum

Showing posts with label World Bank. Show all posts

Paul-Wolfowitz[i-Paul-Wolfowitz]How could you have forgotten the Wolfowitz saga? The man who was not fit to head that wonderfully pure and clean institution, the World Bank?

We followed it quite carefully. Here is the beginning and the comparison with the Verheugen tale, which ended quite differently in that Verheugen, despite breaking every rule of his employment and, indeed, cheating on his wife, retained his job.

Here is the tale of African representatives wanting Wolfowitz to stay as he was beginning to clean out the Augean stables, that is the World Bank.

A link to Tobias Buck's blog in the FT that points out the differences between the Verheugen and the Wolfowitz sagas (having started this tale with the similarities above). Just to remind our readers:

The main differences had to do with the fact that Mr Verheugen was secretive about the affair, had actually promoted the lady to be his chef du cabinet, is a married man and has not had to resign. Otherwise, it is all the same.

We did have a piece about Mr Wolfowitz's successor, Robert Zoellick with some doubts whether he was quite what those purer than the snow tranzis were looking for.

We have, however, left the story alone for some time. Thankfully, Thomas Lifson and Clarice Feldman on American Thinker are made of sterner stuff. Mr Lifson has linked to the Wall Street Journal article, which is, sadly, available only on subscription, that has taken the trouble to find out what the result of that investigation into Mr Wolfowitz's behaviour was.

Following a call from us, a bank spokesman says the investigation has been completed, and that the report finds "no basis to conclude misconduct occurred." The tab for this fishing expedition? The bank won't say, and Goodmans didn't return our calls. But a source estimates the cost to the bank runs north of $500,000.

That figure may be pocket change at the bank, though it is hardly so for the poor people whom the bank ostensibly exists to serve.

Mr Lifson calls it disgraceful. Really? I call it par for the course. After all, the main purpose was served and Mr Wolfowitz was removed from a position where he might have shaken the World Bank up.

Meanwhile, Reuters reports that Britain has become the top donor to the World Bank. In fact, the amount of money the World Bank under the emollient Robert Zoellick is garnering continues to rise. The question is, what good will come of it all. Let us hope that all those people who are rejoicing now will be just as keen on giving an account of how the money was spent when it does its usual disappearing act.

In the circumstances, I believe, it behoves this blog to adopt the World Bank as yet another organization whose goings on must be followed as closely as possible.

ChinaPoll[i-ChinaPoll]From Spiegel an article based on a report in the Financial Times. It would seem that the Chinese government has been putting pressure on the World Bank to change its reports on such matters as the number of people who might die prematurely because of pollution.

According to a report in Tuesday's edition of the Financial Times, the Chinese government put pressure on the World Bank to take potentially damaging statistics out of a report on pollution in China.

Among the alleged cuts made were the report's finding that around 750,000 people in China are dying prematurely every year due to high levels of air pollution and poor water quality. Another deletion was a particularly damning map of China showing which parts of the country suffered from the most pollution-related deaths.

The FT editorial huffs and puffs if I may use that expression without punning.

Even in a China that is more capitalist than ever, the instinctive official response to bad news is to suppress it with all the force available to the nominally communist state. Beijing needs to accept that in 2007 this kind of reaction is as futile and dangerous as it was in 2003, when the authorities kept secret the spread of the deadly Sars virus. It is futile because the truth will out and dangerous because secrecy delays the necessary remedial action.

Futile and dangeours for whom? It seems that the World Bank happily (or, perhaps, not so happily) acquiesces in this sort of behaviour and accepts the Chinese government’s argument that this sort of information might cause social unrest in the country.

The alternative of publishing the truth in the expectation that fear of social unrest might encourage the authorities to tackle the problems clearly did not occur to any of those hightly paid officials.

Next time you see criticism of the United States as the Great Polluter, especially from the World Bank, remember the Chinese figures they agreed to blank out.

Zoellick[i-Zoellick]We are all assuming that the World Bank directors will accept Robert Zoelick as their next boss but will they and all those who have been screeching their triumph over Paul Wolfowitz be happy with what comes next? On Zoelick’s past performance it seems unlikely that he will be a typical tranzi as Wolfowitz’s predecessors, John McCloy and James Wolfensohn (a close friend of former SecGen Kofi Annan’s) were. At best, one can say that his immediate manners are smoother than those of Wolfowitz.

Der Spiegel has an interesting and rather unhappy article on the subject. Zoellick, they point out, is a man Germans know and like.

Robert Zoellick will be the first World Bank president to take office already decorated with the Federal Cross of Merit, Germany's distinguished state honorary badge. His predecessors John McCloy and Jim Wolfensohn also received the Cross -- but only later. Zoellick already wears it, in recognition of his efforts to help bring about German reunification. As the main United States mediator in the "Two Plus Four Agreement" -- the Treaty on the Final Settlement with Respect to Germany that emerged from the 1990 talks between the two German states and the four World War II victors, and which led to German reunification -- he vigorously championed German self-determination. The Germans thanked him by awarding him the order.

He is also a man who seems to believe strongly in free trade across the world. Certainly, he pushed many of the WTO agreements forward. So, everything in the garden is lovely? Sadly, no.
It seems that Mr Zoellick puts America’s interests first. I am shocked, I tell you, shocked. That a man employed by the United States government should put that country’s interests first!!!

Worse is to come. Robert Zoellick, it seems, is a long-standing friend of the Bush family and part of the very close political circle around both Bush Senior and Junior.

When George W. Bush, then still the governor of Texas, set his sights on the White House, Zoellick was part of an intimate circle of advisors led by later National Security Advisor Condoleezza Rice. They called themselves "the Vulcans" and they sought to transform him into a man of the world.

Gulp and double gulp. The President nominates someone who is close to him politically and personally and has also a formidable track-record in international negotiations. This just proves it. Not sure what it proves but it proves something.

In case the Europeans who managed to get Wolfowitz out (notably it was not the Asian or African members of the World Bank who hatched or even took part in the plot) should relax, Der Spiegel has this to say:

Zoellick is "moderate" only by comparison to Wolfowitz and his former Under Secretary of Defense for Policy Douglas Feith, a classic neoconservative, writes Tom Barry, the director of the left-leaning International Relations Center. Zoellick himself accepts the "the neoconservative premise of US global supremacy" but wants to "wisely manage that power," according to Barry.

He's not an ideologist, then, but an idealist: As early as one year before George W. Bush took office in January of 2001, Zoellick articulated his ideas about a "Republican foreign policy" in an essay for Foreign Affairs. The United States would shape the future world order on the basis of its military supremacy, Zoellick wrote, predicting the events of the years to come. "A modern Republican foreign policy," he wrote, "recognizes that there is still evil in the world." Bush himself couldn't have said it better.

In other words, the left does not like him but he seems to appeal to others in the US, whether they are Bush supporters or not. To me, that is quite a good recommendation. His tough love approach to the EU over Airbus and sundry other matters is also something in his favour.

Meanwhile, Irwin Stelzer views the issue from a slightly different perspective in the Daily Telegraph. In his opinion, the Europeans, led by the Germans, ably supported by our own Hilary Benn, himself involved in some doubtful financial activity (but that’s OK, chaps, he is one of us, i.e. nuanced), may well regret their Pyrrhic victory.

They did not achieve what they really wanted, which is a non-American as President of the World Bank because it was made clear to Bush by the people who matter, his American supporters that this was out of the question.

As Pyrrhic victories go, this one is top of the list. For one thing, George W. Bush heard in no uncertain terms from his supporters that they would raise a fuss if he appointed a non-American, even the respected Afghanistan central banker Ashraf Ghani, who holds both Afghan and US citizenship. For another, to sacrifice the wounded Mr Wolfowitz is one thing; to sacrifice the perk that goes along with being the largest single contributor to the World Bank, with no concessions in return, is quite another.

One did not have to be a Bush supporter or a Wolfowitz admirer to feel disturbed, not to say nauseated, by the proceedings whereby the latter was got rid of. In other words, American opinion on the matter became more united, give or take a few out and out left-wing Democrats and nutroots, whose hatred of Bush and everyone around him overcomes everything.

This may lead to what Europeans, in their hearts of hearts, fear most of all: a slow American disengagement from all these transnational organizations. What Mr Stelzer does not postulate is that there might be a much faster disengagement from Europe and matters European.

That, I am sad to say, will include Britain. It would not have escaped anybody’s attention that of the developed countries only Japan supported Wolfowitz throughout the whole mess. (Of course, the actual countries to whom his fight against corruption matters, also supported him but that is another story.) Britain, on the hand, was among the leaders of the pack.

There is, Mr Stelzer thinks, a slow realignment in American attitude to the rest of the world. This has been said before, as one or two of the sillier responses to the article point out, but never with so much force.

The Europeans' partial victory is going to come at a very high cost. Americans, and not only the neo-cons so reviled by the elite in Europe's capitals, are beginning to wonder about the usefulness of their commitment to many international institutions: "These institutions need to be rethought and restructured," said Bob Rubin, Bill Clinton's highly regarded treasury secretary. The fight over Mr Wolfowitz made Americans notice that they are squandering billions on armies of bureaucrats who think it a good idea to wreak vengeance on a man who shaped official US foreign policy, and a man who had as his central goal the elimination of corruption at the bank and among its client states.

Then there is the World Trade Organisation. The Democratic Congress has decided that the costs of ever-freer trade are too high to make the game worth the candle, and is preparing legislation that will end in tariffs on Chinese imports, restrictions on purchases from countries that do not meet US-determined labour and environmental standards, and the likely death of the Doha round of trade talks.

What of the other organizations?

Then there is the UN, an organisation that recently decided that Zimbabwe is just the country to put in the chair of its sustainable economic development committee. With an inflation rate of 2,200 per cent, rampant starvation and a bankrupt government, Zimbabwe's UN representative, who would not be in the job were he not a supporter of Robert Mugabe, can't have very much to teach America - or anyone else.

Besides, even those Americans who are unenthusiastic about Iraq, and want to see Mr Bush back in Texas clearing brush on his ranch, were offended when the UN provided the platform for Venezuela's Hugo Chávez to rant at Mr Bush, as "the devil" trailing a smell of sulphur. There is a mounting feeling that money spent to support the UN - its reputation already seriously dented by the oil-for-food scandal, its members devoted to embarrassing America and Israel while forgiving Arab nations all their sins - might not be in America's long-term interests.

Perhaps of most significance is a growing realisation in Washington that Nato is past its sell-by date. As America takes mounting casualties in Afghanistan, EU countries, with Britain the notable and honourable exception, refuse to provide significant support for an effort in which they agreed to participate. The handful of German troops are not allowed out of their barracks after dark, and soldiers from other nations patrol the most peaceful regions of that violent country.

Besides, Americans are increasingly aware that Europe is funding its generous welfare states by stinting on military spending, something they can do because they rely on American-funded Nato "assets" such as transport planes. That makes America, stung by its experience in Iraq, more rather than less likely to cut back on its role as world policeman.

Perhaps the best early clue to emerging attitudes towards international organisations was Treasury Secretary Hank Paulson's decision not to attend the recent meeting of G8 foreign ministers. He simply had more important things to do than to sit through sessions that could not possibly have tangible results. Mr Paulson's German counterpart agreed with the Treasury Secretary's priorities, and sent a deputy rather than postpone his own holiday.

Will all those who revile American “arrogance” be all that happy with that outcome? It would, however, be one of history’s supreme ironies that the slow destruction of tranzis will have been started by the arrogant and seemingly completely victorious activity of their greatest promoters.

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zoltec[i-zoltec]President Bush has nominated Robert Zoellick, the former U.S. trade representative and an executive at Goldman Sachs Group Inc. and the Treasury Department's original candidate, to become President of the World Bank once Wolfowitz retires.

Zoellick is somewhat smoother than Wolfowitz or Bolton and he has always worked on the trade side rather than policies that might upset people who prefer to admire dictators and lambast the United States. So the board might be reasonably happy to agree to his appointment, having lost the battle to hand the position to a European.

As Bloomberg puts it:

Zoellick will take over an agency racked by conflicts over Wolfowitz's role as an architect of the Iraq war, his recruitment of staffers from the Bush administration and a campaign to battle corruption. The bank also faces questions over its role as a lender to middle income nations that can raise money in capital markets.

It is, of course, the last two that are really problematic and the first two were raised in order to prevent Wolfowitz from even attempting to deal with them. Robert Zoellick will need all the strength of character and acumen he can muster.

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Today's Wall Street Journal has another interesting editorial about the players in the Wolfowitz saga. The ad hoc committee that was supposed to decide whether Wolfowitz has acted unethically is dominated by Europeans most of whom are former politicians and they decided before hearing either him or Ms Riza that he was guilty, despite the evidence, and had to go.

On Saturday, the Washington Post cited "three senior bank officials" as saying that the committee has "nearly completed a report" concluding that Mr. Wolfowitz "breached ethics rules when he engineered a pay raise for his girlfriend." The Post also reported that, "According to bank officials, the timing of the committee's report and its conclusions have been choreographed for
maximum impact in what has become a full-blown campaign to persuade Wolfowitz to go." So there it is from the plotters themselves: Verdict first, trial later.

The timing is crucial in another way. President Bush is about to meet Commission President Barroso and Chancellor Merkel in a summit. He will, presumably, be put under some pressure from them to rid the World Bank of Wolfowitz and let it lapse back into its cosy, corrupt cronyism.

The article is scathing about certain Dutch politicians in particular:

The "ad hoc" chairman is Herman Wijffels, a Dutch politician who has his own blatant conflict of interest in the case. One of the main "witnesses" against Mr. Wolfowitz is Ad Melkert, another Dutch politician who had previously run the bank board's ethics committee that advised Mr. Wolfowitz to give the raise to his girlfriend that is now the basis for the accusations against him. Whom do you think Mr. Wijfells is going to side with: His fellow countryman, or an American reviled in Europe for wanting to depose Saddam Hussein?

Mr. Melkert has played an especially craven role by running from his own responsibility in the case. As head of the ethics committee in 2005, he refused to let Mr. Wolfowitz recuse himself from dealings with Shaha Riza, who had been long employed at the bank. Then Mr. Melkert advised him to ensure that Ms. Riza got a new job that included some kind of raise or promotion to compensate for the disruption to her career. Now, however, Mr. Melkert claims he was an innocent bystander who knew nothing about Ms. Riza's raise.

How very European. This is the same Ad Melkert, who on October 24, 2005, after Ms. Riza had been told of her new job and salary, wrote in a letter to Mr. Wolfowitz that "Because the outcome is consistent with the [Ethics] Committee's findings and advice above, the Committee concurs with your view that this matter can be treated as closed."

And it is the same Ad Melkert who absolved Mr. Wolfowitz after inspecting two whistleblower emails from an anonymous "John Smith" that circulated around the bank in early 2006 and charged malfeasance. A January 21 whistleblower email included a reference to Ms. Riza's "salary increase of around US$50,000" and was sent to the entire bank board.

Oh and one more point. Ms Riza, details of whose employment and salary were leaked to the media against all rules, has not had a chance to give her side of the story. Until now.

COMMENT THREAD

World+Bank[i-World+Bank]The Wall Street Journal has an interesting article on the Wolfowitz saga. Mr Berkowitz of the Hoover Institution (there are two listed on its website, so it is hard to work out which one wrote the article) points out that the recipients of World Bank assistance, particularly if they are interested in reforming their countries want Paul Wolfowitz to stay.

At a press conference during this month's World Bank-IMF meetings in Washington, four of the more progressive African finance ministers were asked about the Wolfowitz flap. Here's how Antoinette Sayeh, Liberia's finance minister, responded:

I would say that Wolfowitz's performance over the last several years and his leadership on African issues should certainly feature prominently in the discussions ... In the Liberian case and the case of many forgotten post-conflict fragile countries, he has been a visionary. He has been absolutely supportive, responsive, there for us ... We think that he has done a lot to bring Africa in general ... into the limelight and has certainly championed our cause over the last two years of his leadership, and we look forward to it continuing.

She was supported by the deputy prime minister for Mauritius, Rama Krishna Sithanen, who pointed out that Mr Wolfowitz had been supportive of reforms in the country.

Zambian Finance Minister N'Gandu Peter Magande said:

We should keep positive that whatever happens to the president, if, for example, he was to leave, I think whoever comes, we insist that he continues where we have been left, in particular on this issue of anticorruption. That is a cancer that has seen quite a lot of our countries lose development and has seen the poverty continuing in our countries. And therefore . . . we want to live up to what [Wolfowitz] made us believe" that "it is important for ourselves to keep to those high standards."

There are one or two interesting points in the article. Paul Wolfowitz, as has been noted before, has demanded results from his staff and has concentrated on the poorest areas of sub-Saharan Africa. (Though some of the countries in that list are extremely rich in resources.)

He has emphasized the need for reform and an end to the culture of corruption. Now, this may be just talk but, clearly, those who have viewed the World Bank as a sinecure for themselves are more than a little worried. So, maybe, this time the talk was going to be translated into action.

After all, it seems to be something of a shock to the system having the President of the World Bank appointing two African-born women as Vice-Presidents. Then there is this problem of results. As the article says about those working for the organization:

the World Bank has always been a sinecure for developed-world politicians. They get handsome salaries, tax free, and their performance is measured not by how much poverty they cure but by how much money they disperse.

The fate of Africa and her people come very low down on their list of priorities. And if the Bank acquires a President who wants to change that situation, a concerted effort is needed to get rid of him.

Imagine how much could have been achieved if the World Bank officials had spent half the time they have wasted on trying to get rid of Wolfowitz on what they are supposed to be dealing with: solving the problems of African countries.

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