Thursday, April 19

The China angle: Pundita offers yet more advice for Paul Wolfowitz

There is an eerie sameness to the worst mistakes that Paul Wolfowitz has made at the World Bank and during his actions to support the US-led democratization of Iraq. Wolfy's friendship with Ahmad Chalabi, as did his friendship with Shaha Riza, blinded him to the most basic personal survival issues.

Obviously Wolfy didn't know the size of the golden handshakes that were given, even to support staff, during the Bank's reorganization a couple decades ago --else he would have sat back and let the Bank's human resources department handle Ms Riza's problem. But if he had resisted the instruction to work out a salary deal, which he had every right to do, Riza would probably have received a bigger secondment salary than he could have envisioned!

At the least he should have waited to see what the Bank's human resources department could come up with, before being helpful.

Paul Wolfowitz has no one but himself to blame for falling into the obvious trap of getting involved in a personnel matter that should have been decided by the Bank's way of doing things. Just as he has no one but himself to blame for promoting and defending Chalabi, whose close ties with Tehran were well known. Wolfowitz took off the blinders too late about Chalabi to save his reputation in Washington.

Yet even more dangerous than his willingness to play don Quixote on behalf of his friends is that Wolfy doesn't grasp the concept of prioritizing when it comes to fighting the bad guys.

In a perfect world, the across-the-board de-Baathification Wolfowitz supported is a splended idea. But if de-Baathification means utter and absolute collapse of the Iraqi government and military, that means it's impossible to move forward with post-conflict stabilization measures! And there was the problem of what all those unemployed Baathists would do with their time; many of them ended up on al Qaeda's payroll.

At the Bank, Wolfy again displayed his difficulty with setting priorities when battling the bad guys. Consider the internal ethics drive that Wolfy ordered launched at the Bank in addition to the anticorruption drive against government borrowers.

We can all agree that pilfering supplies, padding expense accounts, and fudging vacation leave days are bad things for Bank employees to do. But if you look out your castle window and see the armies of Mordor bearing down on you, is this the time to lecture the servants about filching silverware?

Who marshals the armies of Mordor in this context? Beijing, after Paul Wolfowitz put teeth in the World Bank's talk about fighting corruption. Beijing has gotten together with every corrupt government on the planet to make war against Paul Wolfowitz, every other Bank employee, and every high-level government official around the world who dares support a serious anticorruption policy at the World Bank!

What's at stake for Beijing and other very corrupt governments? Trillions of dollars, for starters -- the loss of which can crash governments. Then there are the career and social status of corrupt government officials who skim or misuse development loans to pad their salaries and retain power.

Beijing sees the World Bank's anticorruption policy as a slippery slope: first the Bank, then other multilateral lending agencies, then regional development banks, then private banks will demand strong anticorruption measures. So at all costs, the Bank's anticorruption drive must be stopped.

What are Beijing's weapons, beyond bullying and scare talk to other corrupt governments? China can halt all borrowing from the World Bank, which Beijing has already threatened, and urge other large government borrowers to suspend borrowing from the Bank.

Halting loans to the biggest government borrowers would drive down the Bank's bond rating, which could put the Bank out of business as a lender. In that event the Bank would have to depend completely on donations from the richest governments to stay afloat; that would lead to the Bank becoming nothing more than a multilateral aid agency.

Here some readers might observe that it would be no great loss to the world if the Bank stopped being a lender. Well, that would mean less competition for China's very destructive lending policies in the poorest countries. That is one reason why several African leaders have gotten behind Paul Wolfowitz's anticorruption drive and his fight to retain his position at the Bank. The fight would be easier if Wolfy learns to prioritize Enemies of The Good.

For more on the China angle and the Bank's adventures fighting government corruption, read Richard Behar's March 27 report for Fox News. It's virtually certain that Americans in Wolfy's circle at the Bank, or Wolfowitz himself, leaked the China Memo to Behar. So there is a curious disconnection between Wolfowitz's knowledge of Beijing's actions against the Bank's anticorruption drive and his estimate of how far Beijing is willing to go to remove teeth from the Bank's anticorruption drive.

The disconnect indicates a theme about Wolfowitz's temperament that was also evident in his advice about stabilizing post-invasion Iraq. He understands evil in an abstract sense and has the courage one needs to fight evil. But he keeps forgetting to factor in human nature, which is more powerful than human evil or good.

One of the first rules of human nature is that people won't stick out their neck for you, if you make them fear for their livelihood. That rule holds especially true at the World Bank, where firing for expat employees on a work visa means they only have so many hours to rip up their life in the US and return themselves and their family to their home country.

Paul Wolfowitz and the American aides he brought into the World Bank never considered that Bank mandarins who are expats will fight for their jobs with a fierceness that even a Pentagon general can't muster. A Pentagon mandarin who is forced out of the US military doesn't have to leave America; unless a Bank employee immediately finds other employment in the US, he has no choice but to leave if he's fired or forced out of the Bank.

Wolfy needs to look to human nature for instruction on how to proceed in his relations with other Bank employees and while prioritizing battles against corruption. He needs to gather some expat employees as his closest aides at the Bank and put some distance between himself and his hand-picked American crew.

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