I don't know what to make of Klein's piece for The Nation. (H/T World Bank President site.) After mentioning a micron's worth of the corruption the World Bank has participated in, she wants to see the Bank go down with Wolfy. Not so fast.
I'd like to ask Ms Klein how she'd feel if, after being the victim of a robbery, the police officer taking her complaint replied, "The attack happened before I came on duty. Sorry; I can't help you."
That's what happened to a Congolese who asked then-World Bank President James Wolfensohn whether he could investigate all the money stolen from the Bank -- and the Congolese people -- by Mobutu Sese Seko.
Wolfensohn replied, "[...] The question of where the money went and what the objections were at the time is something I can't really answer seeing as I wasn't around."(1)
The reply is a window on how the World Bank has aided and abetted some of modern history's worst dictators.
The World Bank doesn't need to be shut down. It needs to be investigated. There needs to be a commission set up, along the lines of the commission that investigated the UN Oil-for-Food Program.
At the least, a class action suit needs to filed against the World Bank so that the publics in countries that contribute to the World Bank, and publics that were outright victims of World Bank corruption, can learn the names of Bank employees who were involved in the largest Bank corruption deals.
And now that the Bank is finally making a pass at tackling corruption, the US Congress and the European Parliament need to get involved in reviewing the Bank's anti-corruption guidelines.
Paul Wolfowitz was on the right track in putting teeth in anti-corruption measures, but his decisions on which corrupt government to penalize were based more on emotion than a comprehensive plan and thus, counterproductive.
What should emerge from all the fireworks concerning Wolfy's tenure is a set of anti-corruption guidelines that can be used as a model for all other development banks.
But above all, the past should not be buried by shutting down the World Bank -- at least, not until much more light has fallen on the past.
1) BBC Forum, 2000
Monday, April 30
Understatement of the century
"A full public airing of the high salaries at the [World Bank] is not something that top officials want, many bank officials said."(1)
Wolfy's lawyer is threatening to publish the salaries. This is turning into a shooting war. O happy day! Pundita is laughing so hard I can't finish writing this post.
1) http://www.iht.com/articles/2007/04/29/news/wolf.php
Wolfy's lawyer is threatening to publish the salaries. This is turning into a shooting war. O happy day! Pundita is laughing so hard I can't finish writing this post.
1) http://www.iht.com/articles/2007/04/29/news/wolf.php
"Fuera todos!" Ecuador crystallizes Hugo Chavez's Southern Strategy
The US Department of State needs to get their head screwed on straight about Latin America then radically revise their policy in the region. Enlightenment begins with acknowledging that Hugo Chávez and his copycats in Latin America have popular support for valid reasons.
With regard to democracy the stakes in understanding the situation couldn't be higher. Consider these comments by Emir Sader, the executive secretary of the Latin American Social Sciences Council and one of Brazil's leading intellectuals:
Sader's disingenuous excuse for subverting the democratic process is being used to great effect by Hugo Chávez, but both know that democracy is hard to defend when the democratic process has been used to trample the rights of a majority.
Eucador is a good case study for understanding conditions in Latin America that prompted a backlash against the richest nations and their multilateral lending/aid agencies and economic policies.
Just so we're clear at the start, 60% of Ecuador's 13 million citizens live in terrible poverty. Yet Ecuador has oil wealth. So why hasn't the windfall from high oil prices helped to raise the masses out of the worst of their poverty? For the answer, walk the cat backward:
With regard to democracy the stakes in understanding the situation couldn't be higher. Consider these comments by Emir Sader, the executive secretary of the Latin American Social Sciences Council and one of Brazil's leading intellectuals:
I am reminded of Bill Cutting's remark in The Gangs of New York, after he lodges a meat cleaver in the back of a politician in Boss Tweed's machine: "That is the minority vote."Should the [Latin American] social movements be circumscribed by democracy?
Sader: What would you say democracy is?
Government of the people by the people.
Sader: I would say that, interpreted that way, there are few democracies. The democracies have been governments of the elites to reproduce the power of the elites, so we must not limit ourselves to that type of State that is there, which was made by inertia, by the reproduction of the existing power relationships.I think the social movements will have to do what they are doing in Ecuador or Bolivia, which is to reconsider their instrument of power, to become a transformer, not a reproducer of existing relationships, that smashes the private monopoly of the oligopolies over the media, over the ownership of energy resources, over the banks, the financing capacity, etc."(1)
Sader's disingenuous excuse for subverting the democratic process is being used to great effect by Hugo Chávez, but both know that democracy is hard to defend when the democratic process has been used to trample the rights of a majority.
Eucador is a good case study for understanding conditions in Latin America that prompted a backlash against the richest nations and their multilateral lending/aid agencies and economic policies.
Just so we're clear at the start, 60% of Ecuador's 13 million citizens live in terrible poverty. Yet Ecuador has oil wealth. So why hasn't the windfall from high oil prices helped to raise the masses out of the worst of their poverty? For the answer, walk the cat backward:
January, 2000
Gustavo Noboa, the right-wing vice president who steps into Ecuador's presidency after a coup, signs off on all World Bank-IMF structural adjustment lending terms, including the decision to make the US dollar Ecuador's official currency. The radical dollarization plan leads to collapse of the export market, decimation of payrolls and a halving of real wages.
2003
The terms of the World Bank's Structural Adjustment Program loan for Ecuador are released to Ecuador's officials. The terms require Ecuador to pay bondholders 70 percent of the revenue received from any spike in the price of oil.The result: Ecuador must give up the big bucks from the Iraq War oil price surge. Another 20 percent of the oil windfall is set aside for "contingencies" (i.e., later payments to bondholders). The document specifies that Ecuador may keep only 10 percent of new oil revenue for expenditures on social services.2005
[...] When the oil market went bust in the 1980s, so did Ecuador, and its bonds sold at dimes on the dollar. Now Ecuador's debt sells at a full face value, yielding windfall profits to speculators of as much as 500 percent for those who bought cheap.
[Constitutionally elected president] Alfredo Palacio doesn't object to paying off the bonds. The problem is that the World Bank and IMF want the principal of the bonds paid down early, a rare and financially suspect demand to make on any nation.(2)
A United Nations official tells The Nation that the bondholders are the old oligarchs who originally stripped the nation's banks of assets in the 1980s, fled to Miami and now hold a mortgage on the nation. Palacio's plan to move some of the oil money to social services threatens these bondholders' windfall.A closer look at the Structural Adjustment Program suggests that the World Bank may not be putting Ecuador's interests first. Paragraph III-2 requires electricity rates to rise to double the average price charged in the United States, far above production costs. This is quite a boon to the Ecuadorian electricity suppliers such as Noble Energy of Houston and Duke Power of the Carolinas.April 15, 2007
Outside the presidential palace, indigenous women in bowler hats and pigtails chanted, "Fuera todos! Fuera todos!" Everyone out. As far as they are concerned, every one of the seven presidents who have entered office in the past nine years has sold them out to the bondholders, to the oil companies, to the World Bank and its austerity punishments. To them, Palacio is just another in a long line of disappointments.(2)Eucador's President Rafael Correa said Ecuador was canceling a $9 million loan from the IMF. Along with Argentina, Brazil and Venezuela, Ecuador is promoting the creation of a Bank of the South to lower dependence on institutions like the World Bank and the IMF, which are dominated by Europe and the US.(3)April 16, 2007
Brazil decides to join the Bank of the South to help create a development fund for Latin America.Brazilian Housing Minister Guido Mantega made the announcement this Sunday at a meeting in Washington. Representatives from Brazil, Venezuela, Argentina, Bolivia and Ecuador met in Washington this weekend to discuss the formation of the new bank. The Brazilian minister said he hopes Argentina and Venezuela will formally invite Brazil to have full membership.April 28, 2007
The Bank of the South, initiated by Venezuelan President Hugo Chávez, is being developed jointly by South American countries as an alternative to the World Bank and the International Monetary Fund. Since these organizations demand certain conditions from governments to which they lend money, Chávez and other leaders of the region accuse them of imposing policies that are damaging to their countries.
Chávez, who announced the complete payment of Venezuela's World Bank debt last weekend, has urgently pushed for the creation of the alternative fund in order to free the nations of the region from the IMF and World Bank. Unlike these organizations, the Bank of the South will be managed and funded by the countries of the region with the intention of funding social and economic development without political conditions. Among the first projects that they will fund is an 8,000 kilometer gas pipeline across South America.
Chávez has emphasized that the bank should maintain principles of solidarity and cooperation among the countries of the region, always keeping the control of the institution among the countries of the region. Chávez hopes to have the project will be launched by the end of June, and the Bank should begin operations sometime late this year.(4)President Rafael Correa has expelled the World Bank's representative from Ecuador, accusing the institution of attempting to extort him when he was economy minister in 2005 [...](5)1) Bolivia Rising. H/T: Latin American News Review
2) The Nation
3) WW4 Report
4) Venezuela Analysis. H/T Latin American News Review
5) Taipei Times
Sunday, April 29
Update to today's earlier post
From today's Washington Post:
Since reading the Wapo news, I've tacked on more paragraphs to the quotes published from the Chicago Tribune. (See second article quoted in the earlier post.)
FDA, USDA Won't Recall Pork Over Tainted Pet FoodThe agencies couldn't have thrown together studies so quickly to determine the harm to humans from ingesting processed pork products that contain melamine.
Two federal agencies said yesterday that a contining investigation affirms that the risk to humans from hogs that may have eaten contaminated pet food is very low and that no recall is warranted.
Since reading the Wapo news, I've tacked on more paragraphs to the quotes published from the Chicago Tribune. (See second article quoted in the earlier post.)
Tainted food from China: Before you reach for that vitamin bottle --
If you think tainted pet food is the only problem with our heavy reliance on China for our food supplies, read on:
We are staring down the barrel of a tragedy that could make the SARS epidemic look like nothing. But last week, in a communication with me about the first article in this post, Dave holds US food importers responsible as well:
Noon Update
From today's Washington Post:
Earlier this spring, Europe narrowly averted disaster when a batch of vitamin A from China was found to be contaminated with Enterobacter sakazakii, which has been proved to cause infant deaths. Thankfully, the defective vitamin A had not yet been incorporated into infant formula. Next time we may not be so fortunate.I had planned to leave discussion of the tainted food issue to other bloggers, but this morning Dave Schuler (who is giving daily updates on the pet food recalls) informed me that:
Currently, most of the world's vitamins are manufactured in China. Unable to compete, the last U.S. plant making vitamin C closed a year ago. One of Europe's largest citric acid plants shut last winter, and only one vitamin C manufacturer operates in the West. Given China's cheap labor, artificially low prices and the unfair competitive climate it has foisted on the industry, few Western producers of food ingredients can survive much longer.
Western companies have had to invest heavily in Chinese facilities. These Western-owned plants follow strict standards and are generally better managed than their locally owned counterparts. Nevertheless, 80 percent of the world's vitamin C is now manufactured in China -- much of it unregulated and some of it of questionable quality.
Europe is ahead of the United States in seeking greater accountability and traceability in food safety and importation. But even the European Union's "rapid alert system" is imperfect. Additional action is required if the continent is to avoid catastrophes.
Read more.
We still need to trace the distribution chain of the [contaminated] rice gluten (not to mention the corn gluten). It's possible that the rice gluten was used in baby food.The contaminated food has already entered the human food chain:
[...] About 45 [California] residents ate pork from hogs that consumed animal feed laced with melamine from China. Melamine is used to make plastics, but it also artificially boosts the protein level -- and thus the price -- of the glutens that go into food.The foreign relations angle is so obvious as to scarcely need comment. If Beijing does not cooperate in full with the FDA in the coming week, the US Department of State needs to lodge a diplomatic protest -- and the Bush administration needs to follow up with strong action if the Chinese continue to be obstructive.
It was already fatal for some pets: 17 cats and dogs are confirmed dead, more have likely died without being reported, thousands have suffered kidney problems, and 57 brands of cat food and 83 of dog food have been recalled. On top of that, roughly 6,000 hogs will be destroyed because they ate tainted feed.
The effects of melamine on people are thought to be minimal, but no one really knows. Its consumption by humans is considered so improbable that no one has even studied it.
But they are studying now. What last month was a limited recall of canned pet food is on the verge of becoming a full-fledged public health scare, potentially overwhelming government agencies and raising troubling questions about U.S. food safety in the global economy and in the post-Sept. 11 era.
The Food and Drug Administration, criticized by some in Congress for responding too slowly, is struggling to catch up with the implications of the spread of melamine-contaminated glutens from China to hogs, and the human food chain. The FDA is still trying to get its investigators into China, where a skeptical government only last week assented to investigators' visa requests.
At a time when food imports are growing, and only 1 percent to 2 percent of food imports receive any government scrutiny, critics say the scare reveals the shortcomings of a weakened food safety bureaucracy, the inadequacy of existing regulations and the inability of the FDA, which has suffered significant cutbacks, to protect the food supply. [...]
[...] The FDA is also examining imported vegetable proteins earmarked for human products like pizza, protein bars and baby formula. That investigation, still in its early stages, hasn't uncovered any contaminated ingredients, but the agency, an FDA doctor said, wanted to "get ahead of the curve."
The melamine-laced food reached hogs because surplus pet food—crumbled and broken food bits rejected as unsuitable for dogs or cats—was sent to hog farms and turned into feed. The FDA says bulk shipments of feed were delivered to hog farmers in California, Utah, Ohio, Kansas, Oklahoma, New York, North Carolina and South Carolina. FDA officials said they were also concerned that contaminated livestock feed may have been shipped to Missouri. [...]
Even as the tainted wheat gluten cases have multiplied, the FDA has learned of another problem: Chinese rice protein. U.S. importer Wilbur-Ellis told the agency that a single bag of rice protein that it had imported tested positive for the presence of melamine. Wilbur-Ellis imported the rice from Binzhou Futian Biology Technology Co. in China's Shandong province. In the U.S., the protein went to five U.S. pet food makers in Utah, New York, Kansas and Missouri.
While the FDA has targeted select states for hog inspections, the pet food recall and the large number of sick cats and dogs have overwhelmed state agencies that often only investigate a dozen pet food complaints a year. The FDA says about 400 employees across the country are collecting pet food samples, monitoring the recalls' effectiveness and preparing complaints.
The investigation's progress in Illinois alone illustrates the problem.
About half of the 32 FDA investigators in the state have worked on responding to more than 500 complaints of sick or deceased dogs and cats since the recalls began March 16. They must collect medical records from veterinarians and gather samples of contaminated pet food.
The office is also involved in recall effectiveness. "It's very taxing on our resources," said Scott MacIntire, director of the FDA's Chicago office, which oversees state operations.
MacIntire said his office is investigating a shipment of rice protein concentrate imported to Illinois and potentially used in a human product.
Nationwide, the FDA has only enough inspectors to check 1 percent to 2 percent of the 8.9 million imported food shipments in 2006.
"We don't have the resources or the capabilities to test every single shipment of every single food item that crosses into our country or into our state borders," said Frank Busta, director of the National Center for Food Protection and Defense.
Stupak is among a small number in Congress who for several years have pressed for stiffer food safety regulations. He said legislation likely to pass this year could include a provision giving the FDA authority to order food processors to recall questionable items.
Currently, the FDA can issue mandatory recall orders only for baby formula [...]
Read more
We are staring down the barrel of a tragedy that could make the SARS epidemic look like nothing. But last week, in a communication with me about the first article in this post, Dave holds US food importers responsible as well:
One of the aspects that I find most troubling in all of this is that so many companies apparently see no need to do due diligence and actually know anything about their overseas suppliers. As best as I can tell they're judging by price lists alone. Quality, reliability, etc. play little role.To which I can only add, "a very opaque monopoly."
[...] China is, in effect, operating as one huge monopoly. We have no idea what their costs of production are and, in all probability, neither do they. All we see is prices and it's not clear, at least to me, how price signals are communicated in a command economy.
Noon Update
From today's Washington Post:
FDA, USDA Won't Recall Pork Over Tainted Pet FoodThe agencies couldn't have thrown together studies so quickly to determine the harm to humans from ingesting processed pork products that contain melamine.
Two federal agencies said yesterday that a contining investigation affirms that the risk to humans from hogs that may have eaten contaminated pet food is very low and that no recall is warranted.
Friday, April 27
Canada's onrushing dhimmification, the CanAmerMex superstate, and globalizing labor unions
April 19
Dear Dymphna:
I was just at Dan Riehl's site and saw a link to is report, which floored me. I am staggered by the accommodations for Muslims that Canadian colleges are considering. I can scarce believe what I am reading.
Pundita
"It's true, Pundita. Minnesota is already dhimmified; Michigan is working on it, especially Detroit. [...] Did you see the recent backwash on Minnesota cab drivers? They're mostly Somali and they wouldn't pick up anyone who appeared "kaffir" -- a bit of a problem at the airport. It took the authorities long enough but they finally cracked down.
These are the people who will help bring Obama to the Oval office. Hillary must be fuming.
Did you see the essay I did on the uniting of the North American continent? Most people dismiss it as scare tactics, but read the meetings with Condi Rice, the huge taking of private lands through the middle of the US to make the superhighway from the ports in Mexico all the way to Alberta, Canada.
Four lanes for cars, four for trucks, four for boxcars, and one section for electronic maintenance of this supposed "smart" highway. There's an inland port in Kansas City, largely funded by (I think) the Chinese. And, of course, they now control both ends of the Panama Canal. To think we ever worried about Fidel....
The unit of money suggested is the amero.
The concept of sovereignty seems to be fading. See my post, Yes Virginia, there is an American Union waiting in the wings.
It is going to be a Mexican-Muslim standoff, though. Crime in Canada by immigrants -- the trash and dash, or slash and dash, as the case may be -- is so common that people aren't even reporting anymore. It is as [politically correct] and repressive as the EU now.
I think the point tipped, Pundita, but I hope I'm wrong.
Consider joining the Center for Vigilant Freedom. [...] Their basic premise is that "we're on our own." The federal government is too swollen and too corrupt to be of any practical value in the struggles ahead. And the EU, especially with the new hate speech laws, is becoming ever more repressive. Some of the proposals are directed specifically against blogs.
Americans and Europeans have different issues but the core problem is the same: the silencing of dissent.
Also, read the latest Fjordman essay, Is Islam Compatible With Democracy?
Dymphna
Gates of Vienna"
Dear Dymphna:
I was very impressed with Fjordman's essay. I didn't know about the CanAmerMex superhighway but I was struck by this passage from your Yes Virgina essay.
Substitute the Republican and Democrat parties for the scorpions, the European Union for the Cadillac, the globalized investor-banking sectors for Las Vegas, and globalized business for the boxing world, and you have a handy metaphor to explain the way things are going right now in the world.
1) Unions for a Global Economy by Harold Meyerson, The Washington Post, April 26, 2007.
Dear Dymphna:
I was just at Dan Riehl's site and saw a link to is report, which floored me. I am staggered by the accommodations for Muslims that Canadian colleges are considering. I can scarce believe what I am reading.
Pundita
Accommodations could open door to more demands by Katherine Kersten, Star Tribune, April 18, 2007April 20
Last week, I wrote about Minneapolis Community and Technical College's proposal to install ritual washing facilities to facilitate Muslim prayer. Is this a tempest in a teapot, as some have suggested?
Canada, our neighbor to the north, is farther down the "accommodations" road. A glance north can shed light on whether prayer spaces and ritual washing facilities are likely to satisfy activists for long.
Last month, the Canadian Federation of Students issued a report, titled "Final Report of the Task Force on Needs of Muslim Students," that calls for sweeping changes at the country's institutions of higher education. The federation represents more than 500,000 students across Canada, about half of the nation's total. While the report focuses on Ontario, its conclusions are applicable across the country and internationally, said Jesse Greener, the Federation's Ontario chairperson.
Some recommended changes could affect all students. For example, the report criticizes Canada's loan-based system of financing higher education and calls for outright grants to students. "Education related government loans should not accumulate interest," it says, since Islam "opposes usury and involvement with interest-bearing loans."
Other changes would be more focused. The report endorses "women-only" time at athletic facilities, and urges colleges to "provide curtains or screens over the observation windows" when women are using the pool.
The report calls not just for Muslim-only prayer space but for "multiple prayer spaces" with "easy access" from all over campus. All new building plans should include prayer space and ritual washing facilities if necessary, it adds. Food service workers must learn to prepare halal food, which is ritually slaughtered and otherwise permissible under Sharia law. After preparing non-halal food, staff must "change sanitary gloves and wash cutlery and surfaces" to avoid contaminating halal food.
What if a campus fails to make these changes, and others like them?
It is guilty, says the report, of "Islamophobia" -- an "emerging form of racism," according to the Ontario Human Rights Commission. Islamophobia includes more than clearly inappropriate behavior such as violence against Muslims or unreasonable suspicion of them.
It can be as "subtle" as a remark that includes a "stereotype" or betrays the speaker's "lack of understanding" of Islam (such as the notion that Sharia law treats women as second class citizens).
Just "one comment" of this kind can create a "poisoned" learning environment for Muslim students, the report says.
"Islamophobic" comments will soon land Canadians in serious trouble, if the federation has its way. The report outlines a comprehensive system "to encourage and facilitate a culture of reporting Islamophobia on campus.
Anti-discrimination officers should be notified whenever such a comment is made, it says.
But the report makes clear that systems like this will not eradicate Islamophobia from Canadian campuses. To remove stereotypes, faculty, staff, students and administrators must all learn "the tenets of Islam," it said. "Education modules" for professors should incorporate a focus on "Islam and Islamophobia," while student activities could range from more courses on themes of the Qur'an and the Islamic world today to "socials, programs and other initiatives" to teach about Islam.
Everyone on campus should learn to recognize his or her "collective responsibility to identify and stop Islamophobia."
Throughout this process, however, Islam must not be taught from a "Western perspective." This qualifies as Islamophobia, because it "misrepresents Islam." At the same time, the report says, some Muslim students have called for integrating "Islamic perspectives" in disciplines such as marketing, nursing and finance," since Islam's view of these differs from those of the West.
The Muslim Students Association of the U.S. and Canada is heavily involved in the Canadian Federation of Students' new report and lobbying. Its president is a member of the task force, and has been a spokesman for its recommendations. The association is the organization that Minneapolis Community and Technical College has looked to for guidance on the ritual washing issue. Its main goal, it says, is "Dawah": spreading Islam.
"It's true, Pundita. Minnesota is already dhimmified; Michigan is working on it, especially Detroit. [...] Did you see the recent backwash on Minnesota cab drivers? They're mostly Somali and they wouldn't pick up anyone who appeared "kaffir" -- a bit of a problem at the airport. It took the authorities long enough but they finally cracked down.
These are the people who will help bring Obama to the Oval office. Hillary must be fuming.
Did you see the essay I did on the uniting of the North American continent? Most people dismiss it as scare tactics, but read the meetings with Condi Rice, the huge taking of private lands through the middle of the US to make the superhighway from the ports in Mexico all the way to Alberta, Canada.
Four lanes for cars, four for trucks, four for boxcars, and one section for electronic maintenance of this supposed "smart" highway. There's an inland port in Kansas City, largely funded by (I think) the Chinese. And, of course, they now control both ends of the Panama Canal. To think we ever worried about Fidel....
The unit of money suggested is the amero.
The concept of sovereignty seems to be fading. See my post, Yes Virginia, there is an American Union waiting in the wings.
It is going to be a Mexican-Muslim standoff, though. Crime in Canada by immigrants -- the trash and dash, or slash and dash, as the case may be -- is so common that people aren't even reporting anymore. It is as [politically correct] and repressive as the EU now.
I think the point tipped, Pundita, but I hope I'm wrong.
Consider joining the Center for Vigilant Freedom. [...] Their basic premise is that "we're on our own." The federal government is too swollen and too corrupt to be of any practical value in the struggles ahead. And the EU, especially with the new hate speech laws, is becoming ever more repressive. Some of the proposals are directed specifically against blogs.
Americans and Europeans have different issues but the core problem is the same: the silencing of dissent.
Also, read the latest Fjordman essay, Is Islam Compatible With Democracy?
Dymphna
Gates of Vienna"
Dear Dymphna:
I was very impressed with Fjordman's essay. I didn't know about the CanAmerMex superhighway but I was struck by this passage from your Yes Virgina essay.
[...] Once complete, the new road will allow containers from the Far East to enter the United States through the Mexican port of Lazaro Cardenas, bypassing the Longshoreman’s Union in the process. The Mexican trucks, without the involvement of the Teamsters Union, will drive on what will be the nation’s most modern highway straight into the heart of America. The Mexican trucks will cross border in FAST lanes, checked only electronically by the new “SENTRI” system. The first customs stop will be a Mexican customs office in Kansas City, their new Smart Port complex, a facility being built for Mexico at a cost of $3 million to the U.S. taxpayers in Kansas City.[...]If it's any comfort, the superhighway won't bypass the Longshoreman and Teamsters unions for very long. The most powerful American unions have decided to fight fire with fire: if they can't beat the US companies that globalize production to avoid unions, then globalize the unions. That's the trend right now with labor organizers; eventually it will have a huge impact on the global economy help chip away at national sovereignty.
The business press has barely noticed and the usual champions of globalization have been mute, but an announcement last week in Ottawa signaled a radical new direction for the globalized economy. The United Steelworkers [...] entered into merger negotiations with two of Britain's largest unions (which are merging with each other next month) to create not only the first transatlantic but the first genuinely multinational trade union.Have you seen an old Wayans Brothers movie, The Great White Hype? It's a sendup of the US professional boxing world. The opening scene is a closeup of two scorpions trying to sting each other to death. The camera pulls back to show that the scorpions are locked in their death battle on a road to Las Vegas. They are so intent on the battle that they don't see a Cadillac in the distance, bearing down at top speed. The Caddy, which is driven by a boxing promoter, pulverizes the battling scorpions as it zooms down the road.
[...] The Ottawa declaration broke new ground, but the transnational coordination of unions has been building for more than a decade. The Communications Workers of America has been meeting with telecommunications unions in Europe and elsewhere for years to better deal with common employers. The Service Employees International Union (SEIU) has for the past two years been working with, and helping to fund, security guard and janitorial unions in other nations as ownership of the property service industry has been consolidated into an ever-smaller number of multinationals.
Last November, the SEIU organized 5,300 immigrant workers who clean the office buildings in downtown Houston -- a stunning achievement in the heart of the anti-union South. Stephen Lerner, chief strategist for the SEIU's Justice for Janitors campaign, attributes the success partly to the same consolidation and globalization processes that have generally proved so debilitating to union power.
Last year just five cleaning contractors -- all either national or global in scope -- employed the majority of the city's janitors, and many of the office buildings were owned by global investors. The emerging global network of property-service unions staged demonstrations supporting the Houston janitors in Mexico, Moscow, London and Berlin.
The Steelworkers' network of strategic alliances with foreign unions dates to the early '90s. As the production of steel became a global enterprise, the union formed alliances with mining and manufacturing unions in Brazil, South Africa, Australia, Mexico, Germany and Britain. In part, the alliances emerged because these unions shared common employers -- Alcoa in metals, Bridgestone in tires and, now, with the Steelworkers and Britain's Amicus having grown to include paper workers, Georgia Pacific and International Paper as well. The unions share research, discuss common bargaining strategies and support one another during strikes.
But the purpose of the proposed merger is broader. "We determined that the best way to fight financial globalization was to fight it globally," says Gerald Fernandez, who heads the Steelworkers' international affairs and global bargaining operations.
"Exploring a merger is the necessary first step to building a global union or federation of metal, mining and general workers."
Whether or not the merger goes through, the Steelworkers and their British partners have already committed to fund human rights and union rights operations in Colombia (which perennially leads the world in murdered unionists) and parts of Africa. They plan to mount a global campaign to protect employees' retirement benefits, under assault in a growing number of countries from financiers who view workers' financial security as a dispensable commodity.(1) [...]
Substitute the Republican and Democrat parties for the scorpions, the European Union for the Cadillac, the globalized investor-banking sectors for Las Vegas, and globalized business for the boxing world, and you have a handy metaphor to explain the way things are going right now in the world.
1) Unions for a Global Economy by Harold Meyerson, The Washington Post, April 26, 2007.
Wednesday, April 25
Of Ingos, Gongos, and Rogue Aid: three pieces of the 21st century puzzle
"What we have here—in states like China, Iran, Saudi Arabia, and Venezuela—are regimes that have the cash and the will to reshape the world into a place very different from where the rest of us want to live."
When I started this blog in November 2004, the Ukraine presidential election was the farthest issue from my mind. But within days of attempts to focus my writing on the Bush democracy doctrine I was slammed by news -- news suppressed in the US mainstream media -- that some EU nations and the US in particular were acting through proxy individuals and organizations to influence the election. I was horrified by the implications.
On the one hand the US government was loudly proclaiming for the implementation of real democracy in developing nations; on the other, the government was using underhanded means to foment a phony "orange revolution" to put a US and EU-favored Ukrainian oligarch in power as a means to counter Russia's influence in Ukraine.
I warned readers that the contradiction would not stand and that meddling in Ukraine's democratic process would come back to bite US foreign relations. Two years later Russian President Vladimir Putin signed into law sweeping authority to monitor the activities and finances of NGOs (nongovernmental organizations).
What is a gongo? A gongo, according to foreign policy analyst Moisés Naím, is a government-organized nongovernmental organization. Isn't that definition a contradiction in terms? Why yes, it is.
Gongos represent Me-Tooism in foreign relations ploys. Used to be that only the biggest governments acted globally behind the friendly mask of citizen movements; now any government can play the game, as witness gongos fronted by Burma and North Korea: the Myanmar Women's Affairs Federation and Chongryon, the General Association of [North] Korean residents in Japan.
One of the worst effects of gongos is the backlash against them, as can be seen in Putin's crackdown on ngos, both foreign and domestic. Fear of meddling by external governments, no matter how overblown, makes the perfect excuse for governments to crack down on democracy movements and other groups in their country that defend human rights.
Add to the proliferation of gongos that are fronts for rogue governments is what Naím terms "rogue aid" -- foreign aid programs mounted by oppressive governments. The example that Naím uses to introduce his essay on rogue aid is instructive on many levels and underscores the pressure on the World Bank and other multilateral lending agencies to keep lending to corrupt governments -- and with no strings attached:
2) Democracy's Dangerous Imposters by Moisés Naím, The Washington Post, April 21, 2007
3) Rogue Aid by Moisés Naím, Foreign Policy March/April 2007 issue.
When I started this blog in November 2004, the Ukraine presidential election was the farthest issue from my mind. But within days of attempts to focus my writing on the Bush democracy doctrine I was slammed by news -- news suppressed in the US mainstream media -- that some EU nations and the US in particular were acting through proxy individuals and organizations to influence the election. I was horrified by the implications.
On the one hand the US government was loudly proclaiming for the implementation of real democracy in developing nations; on the other, the government was using underhanded means to foment a phony "orange revolution" to put a US and EU-favored Ukrainian oligarch in power as a means to counter Russia's influence in Ukraine.
I warned readers that the contradiction would not stand and that meddling in Ukraine's democratic process would come back to bite US foreign relations. Two years later Russian President Vladimir Putin signed into law sweeping authority to monitor the activities and finances of NGOs (nongovernmental organizations).
The new powers, which include the right to suspend NGOs should they "threaten Russia's sovereignty or independence", have been condemned by both domestic and international rights groups. The rules are widely seen as a Russian effort to prevent any Ukraine or Georgia-style revolution spearheaded by NGOs.With those words President Putin became the first leader of a major nation to publicly spotlight the role of ingos (international ngos) in 21st century international relations and their implications for a sovereign nation's defense policy. Whereupon officials in every repressive government the world over gleefully broke out the champagne. Russia had just handed them, on a silver platter, the moral authority to block human rights reforms favored by ingos -- and the excuse to brand even the most innocent ingos as gongos.
The FSB security service -- the main successor to the Soviet KGB -- has accused Western intelligence agents of using NGOs to foment revolution in the former Soviet Union. The authorities' new powers cover the activities of numerous charities in Russia as well as non-profit groups promoting human rights and democracy.
"We are for [ngo] funding being transparent ... we don't want them led by puppeteers from abroad," Putin. "NGOs must not be used by some states as an instrument of foreign policy on the territory of other states."(1)
What is a gongo? A gongo, according to foreign policy analyst Moisés Naím, is a government-organized nongovernmental organization. Isn't that definition a contradiction in terms? Why yes, it is.
Behind this contradictory and almost laughable tongue-twister lies an important and growing global trend that deserves more scrutiny: Governments are funding and controlling [ngos], often stealthily.I dispute that any gongo is "benign." A deliberate contradiction in terms, when carried out by a government, is never benign. But this does not take away from Naím's excellent argument that the world now needs a rating system for ngos to distinguish whether they are genuine or a gongo.
Some gongos are benign, others irrelevant. But many ... are dangerous. Some act as the thuggish arm of repressive governments. Others use the practices of democracy to subtly undermine democracy at home. Abroad, the gongos of repressive regimes lobby the United Nations and other international institutions, often posing as representatives of citizen groups with lofty aims when, in fact, they are nothing but agents of governments that fund them. Some governments embed their gongos deep in the societies of other countries and use them to advance their interests abroad.(2)
Gongos represent Me-Tooism in foreign relations ploys. Used to be that only the biggest governments acted globally behind the friendly mask of citizen movements; now any government can play the game, as witness gongos fronted by Burma and North Korea: the Myanmar Women's Affairs Federation and Chongryon, the General Association of [North] Korean residents in Japan.
One of the worst effects of gongos is the backlash against them, as can be seen in Putin's crackdown on ngos, both foreign and domestic. Fear of meddling by external governments, no matter how overblown, makes the perfect excuse for governments to crack down on democracy movements and other groups in their country that defend human rights.
Add to the proliferation of gongos that are fronts for rogue governments is what Naím terms "rogue aid" -- foreign aid programs mounted by oppressive governments. The example that Naím uses to introduce his essay on rogue aid is instructive on many levels and underscores the pressure on the World Bank and other multilateral lending agencies to keep lending to corrupt governments -- and with no strings attached:
My friend was visibly shaken. He had just learned that he had lost one of his clients to Chinese competitors. “It’s amazing,” he told me. “The Chinese have completely priced us out of the market. We can’t compete with what they are able to offer.”1) Putin warning over 'puppet' NGOs, BBC, January 31, 2006
Of course, manufacturing jobs are lost to China every day. But my friend is not in manufacturing. He works at the World Bank.
His story begins in Nigeria. The Nigerian government operates three railways, which are notoriously corrupt and inefficient. They are also falling apart. The World Bank proposed a project based on the common-sense observation that there was no point in loaning the Nigerians money without also tackling the corruption that had crippled the railways. After months of negotiation, the bank and Nigeria’s government agreed on a $5 million project that would allow private companies to come in and help clean up the railways. But, just as the deal was about to be signed, the Chinese government offered Nigeria $9 billion to rebuild the entire rail network—no bids, no conditions, and no need to reform. That was when my friend packed his suitcase and went to the airport.
It is not an isolated case. In recent years, a variety of wealthy, nondemocratic regimes have begun to undermine development policy through their own activist aid programs. Call it rogue aid. It is development assistance that is nondemocratic in origin and nontransparent in practice; its effect is typically to stifle real progress while hurting average citizens.
China has backed such deals throughout Africa; its funding of infrastructure there has boomed from $700 million in 2003 to between $2 and $3 billion for each of the past two years. Indeed, it is a worldwide strategy. In Indonesia, Beijing agreed to expand the country’s electrical grid. Too bad the deal calls for building plants that use a highly polluting, coal-based Chinese technology. No international agency would have signed off on such an environmentally unfriendly deal. In the Philippines, the Asian Development Bank, which lends money at low interest rates to poor countries, had agreed to fund Manila’s new aqueduct. It too was suddenly told that its money was no longer needed. China was offering lower rates and fewer questions. [...]
China is not the first country to rely on aid as a tool to advance its interests abroad. The Soviet Union and the United States spent decades giving “development aid” to dictators in exchange for their allegiance. Even today, American largesse to Egypt and Pakistan is rooted in geopolitical calculations. But, beginning in the 1990s, this system slowly began to improve. With greater media scrutiny, many developed countries were shamed into curbing these practices.
Today, the projects of organizations like the World Bank are meticulously inspected by watchdog groups. Although the current system is far from perfect, it is certainly more transparent than when foreign aid routinely helped ruthless dictators stay in power. Nor is China the only regime offering rogue aid. President Hugo Chávez has not been shy in using his nation’s oil-fueled international reserves to recruit allies abroad.
Indeed, Venezuela’s ambassador to Nicaragua, explaining his country’s large aid packages to the region, bluntly announced in early January, “We want to infect Latin America with our model.”
Thus, hopes for Cuba’s opening as a result of Fidel Castro’s demise and the island’s bankruptcy will likely be dashed by the roughly $2 billion in rogue aid that Chávez supplies to Cuba every year. Worse, his generosity ultimately harms Cubans who, because of these artificial lifelines, will be forced to wait even longer for the indispensable reforms that will bring their society opportunities for true prosperity.
Iranian aid to Hamas in Palestine or Hezbollah in Lebanon is equally damaging to the people there. Clearly, this financial support has boosted Iran’s influence in the region. Far less clear is whether average Palestinians and Lebanese will ever be better off thanks to Iran’s generosity.
The same can be said of Saudi Arabia’s massive overseas educational aid program. Are Pakistani boys whose parents cannot afford to send them to school well served by attending Saudi-sponsored religious schools that fail to equip them with the skills needed to get a job? They are surely better off going to any school than being in the streets. But why should these be the only two options? Why can’t the Saudis fund education, the Chinese pay for infrastructure, and Chávez help Cuba’s economy without also hurting poor Pakistanis, Nigerians, or Cubans?
Because their goal is not to help other countries develop. Rather, they are motivated by a desire to further their own national interests, advance an ideological agenda, or sometimes line their own pockets. Rogue aid providers couldn’t care less about the long-term well-being of the population of the countries they “aid.”
What we have here—in states like China, Iran, Saudi Arabia, and Venezuela—are regimes that have the cash and the will to reshape the world into a place very different from where the rest of us want to live.
Although they are not acting in concert, they collectively represent a threat to healthy, sustainable development. Worse, they are effectively pricing responsible and well-meaning aid organizations out of the market in the very places where they are needed most. If they continue to succeed in pushing their alternative development model, they will succeed in underwriting a world that is more corrupt, chaotic, and authoritarian. That is in no one’s interests, except the rogues.(3)
2) Democracy's Dangerous Imposters by Moisés Naím, The Washington Post, April 21, 2007
3) Rogue Aid by Moisés Naím, Foreign Policy March/April 2007 issue.
Tuesday, April 24
Should Paul Wolfowitz leave the Bank without a fight or launch a counterinsurgency?
"Pundita! You're driving me crazy with talk about pirates and fallacies. Are you saying the Bank is a pirate organization and should get really efficient at making loans to tyrants and crooks? I just want know if Wolfowitz should fight to stay at his job as bank prez, or should he go quietly?
BTW what's this thing you have against Hilary Benn? I don't want 50 paragraphs, just spit it out.
Caesar in San Francisco"
Dear Caesar:
Paul Wolfowitz should make his fight to stay at the Bank as messy, protracted, and operatic as possible. He should chain himself to his desk and go on a hunger strike.
Why? Because the battles surrounding his tenure have attracted US mainstream media attention. The upshot is that many Americans have learned more about the World Bank during the last month than the last 60 years.
The Bank is an extraordinarily opaque organization, but lips have been loosened since staffers who want to boot Wolfy are intent on garnering as much outside support as possible. The more that staffers hurl cannon fodder against Wolfowitz, the more light is shed on operations at the Bank that are not generally available to the public. And that's greatly needed.
A related reason for Wolfy to fight on is that the longer this situation drags out, the longer the World Bank President website will stay up. In 2005 I tried to persuade them to keep the site going beyond the selection of the Bank's president but they didn't gear up again until a couple weeks ago. I seem to recall noting in 2005 that the site could help avert a world war. I guess readers who don't understand the importance of aid and development issues thought I was joking.
Last but not least -- it is most unfortunate that the panda Robert Zoellick frolicked with in China in 2006 didn't maul him. So if Wolfowitz leaves the presidency, Zoellick will probably take the job. Then Beijing will declare a national holiday because any hope for the Bank working out a viable anticorruption policy will go down the drain. And China will gain so much more power at the Bank that we might as well rename the organization "The Black Pearl."
Do I have a beef with Hilary Benn, aside from the fact that he's a twit? What can you say to someone who makes Bank employees rearrange chairs just so he won't be photographed sitting next to Wolfy? "Yes, sahib?"
But I suppose I envy Benn, or rather his job. The United States of America does not have a secretary of international development. Why don't we have such a cabinet-level position? Because half of US foreign relations policy is stuck in the 1970s and the other half is in the horse-and-buggy era.
Trust me when I tell you that the Bank has always been very efficient at making loans to crooks and tyrants. But there is a movement afoot, which Hilary Benn seems to support, to transform the World Bank into an outright aid agency that asks no questions of corrupt governments and makes no effort to impose economic modernization on a developing country.
I could have done better at explaining the Benn Fallacy, which technically I should have termed the Jeffrey Sachs Fallacy. The fallacy is not that development banks should keep lending even if a government is corrupt. The fallacy is that the harm done by lending to corrupt governments in poor countries is outweighed by the responsibility of the richest nations to help the neediest in a country run by a corrupt regime.
To get a handle on the fallacy let's first return to its exposition in the quote I used in yesterday's essay:
Benn's argument has weight when applied to disaster situations. It's established that a significant amount of disaster aid to a poor a country is stolen if the government overseeing the aid distribution is corrupt or very inept. But if the priority is to render aid to disaster victims, theft or waste of some part of the aid is not enough reason to suspend aid.
However, Benn clearly takes a page from Jeffrey Sachs and transposes the disaster aid argument to nondisaster situations. Sachs argues that the worst consequences of desperate poverty in the poorest countries -- starvation, lack of medical treatment, etc. -- are a disaster and should be treated as such by donor nations.
From there, Benn applies the same reasoning about dealing with corruption in a disaster situation to all kinds of aid and development situations. To boil it down, he's saying that if human suffering from abject poverty is a disaster, one can't suspend aid just because a government will steal part of it.
In the earlier essay, Pundita used too many dramatic and diverting examples to point up the flaw in Benn's line of reasoning but my point holds. Benn ignores the difference between a disaster and a chronic situation.
If you're going to say that lack of adequate medical treatment and food is a disaster, do you keep trying to empty the ocean with a sieve or do you locate underlying causes?
If chronic starvation is defined as a disaster, can we not say that a government's inadequate and corrupt agricultural policy is also a disaster?
If chronic lack of medical treatment is a disaster, why isn't a malfunctioning electrical grid also a disaster? Without electricity, hospitals and clinics find it hard to operate and doctors have trouble communicating with each other about cases. And so on.
Once you start looking at underlying causes, this is where the issue of government corruption becomes crucial for a development bank that makes loans to corrupt governments.
You can keep throwing food and medicine into a disaster situation and hope that at least some of the aid reaches the victims. But you can't keep throwing billions of dollars or euros into infrastructure projects that do not adequately materialize or maintain because of the borrowing government's corruption.
Yet this throwing of development money into a bottomless pit has been done for decades by the World Bank and other development banks.
Hilary Benn mixes up aid and development issues. If you truly believe that development of crucial government services and infrastructure gives a nation an economic boost that can reduce the worst poverty, you must take responsibility for seeing that your development loan money is not stolen by the government.
This is a Herculean task when applied to dispensing money for countless small aid projects. There is just too much paperwork, manpower and oversight mechanisms required to succeed. But the World Bank can chop down the task by making a clear distinction between aid and development.
To this end, the Bank should let go of the IDA, which has become a virtual aid agency, and concentrate on development loans for large infrastructure and government services projects. Such projects are easier to oversee the Bank has developed a pretty good track record at such oversight, although there is big room for improvement.
Hilary Benn and Paul Wolfowitz should note that I have not advised suspending lending to corrupt governments. A clear distinction also has to be drawn between government corruption and development bank lending to corrupt governments. I don't think that Wolfowitz listened well enough when he first came to the Bank, or did enough research, to be clearly aware of the distinctions and understand their importance.
The Bank does not have authority to stop government corruption. And because the Bank is in the development loan business, it can't halt lending programs because a government is corrupt. What the World Bank can do is tag lending terms and loan size to compliance with Bank anticorruption oversight measures on projects.
To toss out an arbitrary example, anticorruption measures can add, say, $10 million to a Bank loan for a dam project. This to ensure that a corrupt government's procurement specialists haven't substituted low-grade steel and cement on the dam, and that a thousand other kinds of theft aren't going on with the project.
Outrageous? Well, that's the cost of doing business under such circumstances. That should be clear enough but the issue becomes muddled when the Bank tries to function as both a development lender and an aid agency. Paul Wolfowitz and Hilary Benn need to write those words on the back of their hand.
1) The Next Crusade: Paul Wolfowitz at the World Bank by John Cassidy, The New Yorker; April 9, 2007.
BTW what's this thing you have against Hilary Benn? I don't want 50 paragraphs, just spit it out.
Caesar in San Francisco"
Dear Caesar:
Paul Wolfowitz should make his fight to stay at the Bank as messy, protracted, and operatic as possible. He should chain himself to his desk and go on a hunger strike.
Why? Because the battles surrounding his tenure have attracted US mainstream media attention. The upshot is that many Americans have learned more about the World Bank during the last month than the last 60 years.
The Bank is an extraordinarily opaque organization, but lips have been loosened since staffers who want to boot Wolfy are intent on garnering as much outside support as possible. The more that staffers hurl cannon fodder against Wolfowitz, the more light is shed on operations at the Bank that are not generally available to the public. And that's greatly needed.
A related reason for Wolfy to fight on is that the longer this situation drags out, the longer the World Bank President website will stay up. In 2005 I tried to persuade them to keep the site going beyond the selection of the Bank's president but they didn't gear up again until a couple weeks ago. I seem to recall noting in 2005 that the site could help avert a world war. I guess readers who don't understand the importance of aid and development issues thought I was joking.
Last but not least -- it is most unfortunate that the panda Robert Zoellick frolicked with in China in 2006 didn't maul him. So if Wolfowitz leaves the presidency, Zoellick will probably take the job. Then Beijing will declare a national holiday because any hope for the Bank working out a viable anticorruption policy will go down the drain. And China will gain so much more power at the Bank that we might as well rename the organization "The Black Pearl."
Do I have a beef with Hilary Benn, aside from the fact that he's a twit? What can you say to someone who makes Bank employees rearrange chairs just so he won't be photographed sitting next to Wolfy? "Yes, sahib?"
But I suppose I envy Benn, or rather his job. The United States of America does not have a secretary of international development. Why don't we have such a cabinet-level position? Because half of US foreign relations policy is stuck in the 1970s and the other half is in the horse-and-buggy era.
Trust me when I tell you that the Bank has always been very efficient at making loans to crooks and tyrants. But there is a movement afoot, which Hilary Benn seems to support, to transform the World Bank into an outright aid agency that asks no questions of corrupt governments and makes no effort to impose economic modernization on a developing country.
I could have done better at explaining the Benn Fallacy, which technically I should have termed the Jeffrey Sachs Fallacy. The fallacy is not that development banks should keep lending even if a government is corrupt. The fallacy is that the harm done by lending to corrupt governments in poor countries is outweighed by the responsibility of the richest nations to help the neediest in a country run by a corrupt regime.
To get a handle on the fallacy let's first return to its exposition in the quote I used in yesterday's essay:
In a speech in London, [Hilary] Benn objected to Wolfowitz's actions on corruption: "Where problems arise, some people argue that we should suspend our aid or withdraw it completely. I don't agree. Why should a child be denied education? Why should a mother be denied healthcare? Or an H.I.V.-positive person AIDS treatment, just because someone or something in their government is corrupt?"(1)Benn is deploying the half-a-loaf argument: Better to feed some than none; even if a corrupt government steals much of the aid donations, at least the remainder will get to where it's desperately needed.
Benn's argument has weight when applied to disaster situations. It's established that a significant amount of disaster aid to a poor a country is stolen if the government overseeing the aid distribution is corrupt or very inept. But if the priority is to render aid to disaster victims, theft or waste of some part of the aid is not enough reason to suspend aid.
However, Benn clearly takes a page from Jeffrey Sachs and transposes the disaster aid argument to nondisaster situations. Sachs argues that the worst consequences of desperate poverty in the poorest countries -- starvation, lack of medical treatment, etc. -- are a disaster and should be treated as such by donor nations.
From there, Benn applies the same reasoning about dealing with corruption in a disaster situation to all kinds of aid and development situations. To boil it down, he's saying that if human suffering from abject poverty is a disaster, one can't suspend aid just because a government will steal part of it.
In the earlier essay, Pundita used too many dramatic and diverting examples to point up the flaw in Benn's line of reasoning but my point holds. Benn ignores the difference between a disaster and a chronic situation.
If you're going to say that lack of adequate medical treatment and food is a disaster, do you keep trying to empty the ocean with a sieve or do you locate underlying causes?
If chronic starvation is defined as a disaster, can we not say that a government's inadequate and corrupt agricultural policy is also a disaster?
If chronic lack of medical treatment is a disaster, why isn't a malfunctioning electrical grid also a disaster? Without electricity, hospitals and clinics find it hard to operate and doctors have trouble communicating with each other about cases. And so on.
Once you start looking at underlying causes, this is where the issue of government corruption becomes crucial for a development bank that makes loans to corrupt governments.
You can keep throwing food and medicine into a disaster situation and hope that at least some of the aid reaches the victims. But you can't keep throwing billions of dollars or euros into infrastructure projects that do not adequately materialize or maintain because of the borrowing government's corruption.
Yet this throwing of development money into a bottomless pit has been done for decades by the World Bank and other development banks.
Hilary Benn mixes up aid and development issues. If you truly believe that development of crucial government services and infrastructure gives a nation an economic boost that can reduce the worst poverty, you must take responsibility for seeing that your development loan money is not stolen by the government.
This is a Herculean task when applied to dispensing money for countless small aid projects. There is just too much paperwork, manpower and oversight mechanisms required to succeed. But the World Bank can chop down the task by making a clear distinction between aid and development.
To this end, the Bank should let go of the IDA, which has become a virtual aid agency, and concentrate on development loans for large infrastructure and government services projects. Such projects are easier to oversee the Bank has developed a pretty good track record at such oversight, although there is big room for improvement.
Hilary Benn and Paul Wolfowitz should note that I have not advised suspending lending to corrupt governments. A clear distinction also has to be drawn between government corruption and development bank lending to corrupt governments. I don't think that Wolfowitz listened well enough when he first came to the Bank, or did enough research, to be clearly aware of the distinctions and understand their importance.
The Bank does not have authority to stop government corruption. And because the Bank is in the development loan business, it can't halt lending programs because a government is corrupt. What the World Bank can do is tag lending terms and loan size to compliance with Bank anticorruption oversight measures on projects.
To toss out an arbitrary example, anticorruption measures can add, say, $10 million to a Bank loan for a dam project. This to ensure that a corrupt government's procurement specialists haven't substituted low-grade steel and cement on the dam, and that a thousand other kinds of theft aren't going on with the project.
Outrageous? Well, that's the cost of doing business under such circumstances. That should be clear enough but the issue becomes muddled when the Bank tries to function as both a development lender and an aid agency. Paul Wolfowitz and Hilary Benn need to write those words on the back of their hand.
1) The Next Crusade: Paul Wolfowitz at the World Bank by John Cassidy, The New Yorker; April 9, 2007.
Monday, April 23
Paul Wolfowitz's responsibility to resolve muddle created by Benn's fallacy
Pundita has been eagerly waiting for William Easterly, a former World Bank economist, to comment on the controversy surrounding Paul Wolfowitz's presidency at the World Bank. On Sunday, in The Washington Post Outlook section, Easterly weighed in with an op-ed that helpfully focuses on broad sets of problems that the World Bank faces. And he stays on track with his criticism of Wolfowitz by zeroing in on leadership failures and Wolfowitz's inconsistent guidelines for the World Bank's anti-corruption drive.
But I was disappointed with Easterly's main argument, which confuses aid issues with development ones. Before adding my two cents, here are excerpts from the opinion piece:
I understand that the World Bank left this planet during Wolfensohn's tenure as Bank president, so Easterly is right to mock the Bank's wholesale embrace of the Millennium Development Goals. But if one really wants to mock the Bank's muddle -- indeed, locate the muddle -- the obvious place is with a review of the following concepts:
> lending vs aid,
> government infrastructure vs social development, and
> government economic development vs aid to the poor.
One isn't far into the review before coming up against the World Bank articles of agreement, which prevent the Bank from mounting programs designed to influence a country's politics. It is because of this stricture that the Bank (and Wolfowitz) has gotten most muddled with the anti-corruption drive.
The only way to make a dent in government corruption is to promote genuine democratic governance on the theory that in a real democracy, private citizens can muster oversight of government procedures and demand transparency in government deals. But this path is closed to the Bank.
What's the next best option for the Bank? Spin off the International Development Association from the Bank and transform the IDA into a multilateral aid agency. This would allow the World Bank to concentrate lending on the kind of projects it's always done best: national infrastructure development projects. These help a government build up or modernize critical industries and services (e.g., power and telecommunications) and extend to 'government operations' infrastructure. The latter include projects for strengthening a country's judicial system and sorting out hideously complex legal projects such as helping a government determine land ownership in their country and register large numbers of deeds.
Easterly asks:
Last September Hilary Benn, the British Secretary of State for International Development, announced that the United Kingdom was withholding from the World Bank a fifty-million-pound payment, to protest the conditions the bank attached to aid. Here we come to the Benn bug:
Maybe China's poorest citizens could have avoided the democide that their government set in motion by suspending HIV tests for large-scale blood plasma drives. All of the donors were poor villagers who sold their blood.(3)(4) The donors are now dying of AIDS by the hundreds of thousands. Hundreds of thousands, Mr Benn.
Recently Indonesia's corrupt government announced that most of the multilateral aid for Tsunami victims never reached the hundreds of thousands of victims; it was stolen. Hundreds of thousands, Mr Benn.
If the World Bank had been tough on corruption during the era that Indonesia had nowhere to turn for big development loans but the World Bank -- think of the horrific tragedies that might have been averted! By the time the Tsunami hit, why, Indonesia might have had a modern government, instead of a club of cronies, to monitor and distribute foreign aid to the victims!
Benn is pushing the fallacy that there is an either-or aspect to development lending: either development banks go easy on rules about dealing with corrupt governments, or the same governments won't allow critical help to the poorest.
Benn's fallacy ignores that the effects of widescale corruption are not limited to cushy lifestyles for thieving officials. Just how do you deliver education, AIDS medicine, clean water, and food to millions of people when there's no electricity, no means of travel through jungle, no functioning water purification plants?
Consider the debacle in Nigeria:
Clearly these points are details in the minds of slicks who want to lend without taking responsibility for what happens to the loan money. But as Britain's decision to withhold funds illustrates, the World Bank is now hostage to officials who won't hesitate to withhold replenishment funding if the Bank upholds strong anti-corruption measures.
The other side of the coin, which William Easterly touches on in his essay, is that the World Bank is in the business of lending, and it has to keep lending to stay in business. Considering the large number of corrupt governments, the Bank couldn't continue if it applied strict anti-corruption measures across the board.
How to resolve the conflict? The same advice I gave earlier applies. It is virtually impossible to closely monitor the many 'soft' loans the IDA makes, and which often are actually aid micro-projects. But the Bank has worked out effective measures for monitoring where the money goes for large infrastructure projects.
Am I proposing to kick the can down the road by fobbing corruption issues onto an outright aid agency? The multifaceted furor over Paul Wolfowitz's presidency is the most visible sign that the Bank is in deep trouble. So I am thinking in terms of triage: to save the World Bank, ditch the IDA and transfer redundant Bank employees, of which there are many, to a new aid agency. Once the agency is operational, Bank funding will be exclusively for infrastructure projects that build a modern society and the machinery of fair government.
Will the new aid agency's aid projects be subject to graft? Yes, and probably to the tune of 20% of the project money. But one removes a gangrenous arm to save the patient; by the same reasoning much graft will be off the table if the Bank concentrates on large-scale infrastructure programs and projects. These are more easily quantified -- and thus, more easily monitored -- than outright aid projects.
And by leaving off aid projects the Bank can stop being a football for politicians who use aid to placate governments they want to increase trade with.
Finally, by restoring the Bank to its original function as a development lender, the concerns that Hilary Benn expresses can find their outlet in outright aid. Let the donor governments eat losses from grafted donations if Mr Benn wants to suspend close scrutiny in the name of aiding the poorest individuals.
Could Paul Wolfowitz scrape up enough of a mandate for the surgery? Not at the present; that's for sure. But neither should he retreat in disarray. He's still the World Bank president; in whatever time he has left at the Bank he needs to fight Benn's Fallacy, not bow to it.
Wolfowitz should always keep before him that Benn's argument flies against the World Bank's own voluminous research. In 1998 the bank's research department published a landmark paper, Assessing Aid, which concludes that aid is effective only when given to a nation with honest government and efficient economic policies.
1) Does He Hear the World's Poor? Don't Bank on It by William Easterly, The Washington Post, April 22, 2007.
2) The Next Crusade: Paul Wolfowitz at the World Bank by John Cassidy, The New Yorker; April 9, 2007.
3) Democide includes deaths arising from a government's "intentionally or knowingly reckless and depraved disregard for life" [...] See Wikipedia discussion of democide. The AIDS deaths in China from HIV-infected state-run blood banks might be termed genocide if it could be demonstrated that officials in China suspended HIV tests on the blood as a means of depopulating the countryside. But finding evidence to support such an accusation would be impossible under China's present government.
4) For more on the China deaths arising from HIV-infected plasma, see The Truth About China by Guy Sorman, The Wall Street Journal, April 20, 2007.
5) As Vote for New President Nears, Democracy Disappoints Nigerians by Craig Timberg, The Washington Post, April 20, 2007.
But I was disappointed with Easterly's main argument, which confuses aid issues with development ones. Before adding my two cents, here are excerpts from the opinion piece:
Wolfowitz also continued a disastrous trend begun by [James] Wolfensohn, whose answer to every bank failure to meet a goal was to add three new goals. The pair have supplemented the bank's original objective -- promoting economic growth -- with everything from securing children's rights to promoting world peace. In so doing, they've sacrificed clarity of direction for ludicrously infeasible by PR-friendly slogans like "empowering the poor" and "attaining the Millennium Development Goals" (which cover every last ounce of human suffering). [...]Since when do we define "development lending to a government" as helping individuals to help themselves? Since when do we define "national infrastructure projects" as feeding the hungry?
The bank's problems would be simpler -- though still far from simple -- if it were not trying to transform whole countries but simply finding out which tools in its toolkit truly help individuals help themselves. We should hold the bank accountable for deregulating the overregulated, feeding the hungry, supplying clean water to the thirsty and treating the sick.(1)
I understand that the World Bank left this planet during Wolfensohn's tenure as Bank president, so Easterly is right to mock the Bank's wholesale embrace of the Millennium Development Goals. But if one really wants to mock the Bank's muddle -- indeed, locate the muddle -- the obvious place is with a review of the following concepts:
> lending vs aid,
> government infrastructure vs social development, and
> government economic development vs aid to the poor.
One isn't far into the review before coming up against the World Bank articles of agreement, which prevent the Bank from mounting programs designed to influence a country's politics. It is because of this stricture that the Bank (and Wolfowitz) has gotten most muddled with the anti-corruption drive.
The only way to make a dent in government corruption is to promote genuine democratic governance on the theory that in a real democracy, private citizens can muster oversight of government procedures and demand transparency in government deals. But this path is closed to the Bank.
What's the next best option for the Bank? Spin off the International Development Association from the Bank and transform the IDA into a multilateral aid agency. This would allow the World Bank to concentrate lending on the kind of projects it's always done best: national infrastructure development projects. These help a government build up or modernize critical industries and services (e.g., power and telecommunications) and extend to 'government operations' infrastructure. The latter include projects for strengthening a country's judicial system and sorting out hideously complex legal projects such as helping a government determine land ownership in their country and register large numbers of deeds.
Easterly asks:
Can -- or should -- the bank be saved? Yes, but not without real change. It would be a shame to discard the world's largest repository of development knowledge and experience.I agree that it would be a tragedy for humanity if the Bank's vast knowledge base went down the tubes. Indeed, the Bank's expertise is the best selling point when competing with private banks and regional development banks to make development loans. However, the Bank has been bitten by the Benn Fallacy Bug, which has eaten into development issues to such extent that the Bank's muddle is approaching chaos.
Last September Hilary Benn, the British Secretary of State for International Development, announced that the United Kingdom was withholding from the World Bank a fifty-million-pound payment, to protest the conditions the bank attached to aid. Here we come to the Benn bug:
In a speech in London, Benn objected to Wolfowitz's actions on corruption: "Where problems arise, some people argue that we should suspend our aid or withdraw it completely. I don't agree. Why should a child be denied education? Why should a mother be denied healthcare? Or an H.I.V.-positive person AIDS treatment, just because someone or something in their government is corrupt?"(2)Hello, Mr Benn, if China's government wasn't so corrupt, if the World Bank hadn't spent decades pandering to Beijing's corruption during an era when the Bank had little competition from other lending agencies, think of the tragedies that might have been averted!
Maybe China's poorest citizens could have avoided the democide that their government set in motion by suspending HIV tests for large-scale blood plasma drives. All of the donors were poor villagers who sold their blood.(3)(4) The donors are now dying of AIDS by the hundreds of thousands. Hundreds of thousands, Mr Benn.
Recently Indonesia's corrupt government announced that most of the multilateral aid for Tsunami victims never reached the hundreds of thousands of victims; it was stolen. Hundreds of thousands, Mr Benn.
If the World Bank had been tough on corruption during the era that Indonesia had nowhere to turn for big development loans but the World Bank -- think of the horrific tragedies that might have been averted! By the time the Tsunami hit, why, Indonesia might have had a modern government, instead of a club of cronies, to monitor and distribute foreign aid to the victims!
Benn is pushing the fallacy that there is an either-or aspect to development lending: either development banks go easy on rules about dealing with corrupt governments, or the same governments won't allow critical help to the poorest.
Benn's fallacy ignores that the effects of widescale corruption are not limited to cushy lifestyles for thieving officials. Just how do you deliver education, AIDS medicine, clean water, and food to millions of people when there's no electricity, no means of travel through jungle, no functioning water purification plants?
Consider the debacle in Nigeria:
Another casualty [of corrupt government] has been the nation's infrastructure, which has deteriorated despite a massive surge in oil revenue. Billions of dollars supposedly have been spent improving Nigeria's electrical system, but poorly maintained power plants generate far fewer megawatts than they did when [President] Obasanjo took office, prompting many Nigerians to conclude that much of the money for repairs and upgrades was simply stolen.Corruption kills; it kills in large numbers and puts a country at the mercy of corrupt foreign governments that rip off natural resources and reduce citizens to beggars and slaves -- and captives of organized crime, which owes much of its funding in the Third World to money stolen from foreign aid and development projects!
They also blame corruption for the aging schools, crumbling roads and meager supplies of clean water. The economic toll has been severe. ...
Without a steady supply of electricity and water, or decent roads and railways to deliver goods, factory owners say they struggle to compete in an increasingly global, open market.(5)
Clearly these points are details in the minds of slicks who want to lend without taking responsibility for what happens to the loan money. But as Britain's decision to withhold funds illustrates, the World Bank is now hostage to officials who won't hesitate to withhold replenishment funding if the Bank upholds strong anti-corruption measures.
The other side of the coin, which William Easterly touches on in his essay, is that the World Bank is in the business of lending, and it has to keep lending to stay in business. Considering the large number of corrupt governments, the Bank couldn't continue if it applied strict anti-corruption measures across the board.
How to resolve the conflict? The same advice I gave earlier applies. It is virtually impossible to closely monitor the many 'soft' loans the IDA makes, and which often are actually aid micro-projects. But the Bank has worked out effective measures for monitoring where the money goes for large infrastructure projects.
Am I proposing to kick the can down the road by fobbing corruption issues onto an outright aid agency? The multifaceted furor over Paul Wolfowitz's presidency is the most visible sign that the Bank is in deep trouble. So I am thinking in terms of triage: to save the World Bank, ditch the IDA and transfer redundant Bank employees, of which there are many, to a new aid agency. Once the agency is operational, Bank funding will be exclusively for infrastructure projects that build a modern society and the machinery of fair government.
Will the new aid agency's aid projects be subject to graft? Yes, and probably to the tune of 20% of the project money. But one removes a gangrenous arm to save the patient; by the same reasoning much graft will be off the table if the Bank concentrates on large-scale infrastructure programs and projects. These are more easily quantified -- and thus, more easily monitored -- than outright aid projects.
And by leaving off aid projects the Bank can stop being a football for politicians who use aid to placate governments they want to increase trade with.
Finally, by restoring the Bank to its original function as a development lender, the concerns that Hilary Benn expresses can find their outlet in outright aid. Let the donor governments eat losses from grafted donations if Mr Benn wants to suspend close scrutiny in the name of aiding the poorest individuals.
Could Paul Wolfowitz scrape up enough of a mandate for the surgery? Not at the present; that's for sure. But neither should he retreat in disarray. He's still the World Bank president; in whatever time he has left at the Bank he needs to fight Benn's Fallacy, not bow to it.
Wolfowitz should always keep before him that Benn's argument flies against the World Bank's own voluminous research. In 1998 the bank's research department published a landmark paper, Assessing Aid, which concludes that aid is effective only when given to a nation with honest government and efficient economic policies.
1) Does He Hear the World's Poor? Don't Bank on It by William Easterly, The Washington Post, April 22, 2007.
2) The Next Crusade: Paul Wolfowitz at the World Bank by John Cassidy, The New Yorker; April 9, 2007.
3) Democide includes deaths arising from a government's "intentionally or knowingly reckless and depraved disregard for life" [...] See Wikipedia discussion of democide. The AIDS deaths in China from HIV-infected state-run blood banks might be termed genocide if it could be demonstrated that officials in China suspended HIV tests on the blood as a means of depopulating the countryside. But finding evidence to support such an accusation would be impossible under China's present government.
4) For more on the China deaths arising from HIV-infected plasma, see The Truth About China by Guy Sorman, The Wall Street Journal, April 20, 2007.
5) As Vote for New President Nears, Democracy Disappoints Nigerians by Craig Timberg, The Washington Post, April 20, 2007.
Friday, April 20
Latest report on voting practices at the UN: Pundita rethinks her reply to Dan Riehl's advice
A month ago I published a two-year old Riehl World View post about a report on voting practices at the United Nations. After noting that the US continues aid to countries that vote against the US the majority of the time at the UN, Dan Riehl observed that perhaps it was time for the US to leave the United Nations "and give the tax savings back to the American workers [...]"
My reply, in Coalition of Punks, was that no matter how much US aid recipients vote against the US, for the US to leave the United Nations would be akin to a bank redlining a seedy neighborhood; I argued that the US would solve nothing and only give ground to "punk" governments.
I am coming around to Dan's view since reading about the 2006 State Department report on voting practices at the United Nations, which was issued this March. Fred Gedrich, a foreign policy and national security analyst and former U.S. State Department official, wrote Monday in The Washington Times:
Fred Gedrich also reports that a February 2007 Gallup poll "indicated that 66 percent of surveyed Americans believe the United Nations is doing a poor job. It's the worst global body rating in Gallup polling history."
So perhaps now the majority of Americans would be willing to seriously consider Dan Riehl's advice. Perhaps it is time to seriously broach an idea that has been around for years, which is that the US take the lead in forming a "United Free Nations" international agency. In any event the United States should not continue on with things as they now stand at the United Nations.
My reply, in Coalition of Punks, was that no matter how much US aid recipients vote against the US, for the US to leave the United Nations would be akin to a bank redlining a seedy neighborhood; I argued that the US would solve nothing and only give ground to "punk" governments.
I am coming around to Dan's view since reading about the 2006 State Department report on voting practices at the United Nations, which was issued this March. Fred Gedrich, a foreign policy and national security analyst and former U.S. State Department official, wrote Monday in The Washington Times:
[...] 191 U.N. General Assembly members collectively voted against U.S.-supported positions 76 percent of the time, out of 94 non-consensus votes cast, on important issues such as threats to international peace and security, terrorism, disarmament, economic and social development, humanitarian relief and human rights.That last observation is damning. Perhaps it is doing the United States, and the ideas that inspired the United Nations, a great disservice by likening tyrannical governments to mere punks.
To fully comprehend this one must first look at the type of governments voting. The General Assembly is currently split into two main factions: free nations and those that are not. According to Freedom House -- a democracy-focused group co-founded by Eleanor Roosevelt -- only 89 of 192 U.N. members have truly free governments.
In other words, the U.N. majority is composed of 103 nations whose governments and leaders do not provide their 3.5 billion subjects the full panoply of political rights and civil liberties like those enjoyed by citizens of free states. Worse, a substantial number of people residing in these countries suffer the dual indignity of severe oppression and extreme poverty.
Unfortunately for their citizens, most rulers of U.N. majority nations instinctively look to despots and human-rights abusers like Cuba's Castro, Iran's Ahmadinejad, Libya's Gadhafi, Venezuela's Chavez and Zimbabwe's Mugabe for leadership. Any doubters should attend a typical U.N.-sponsored global gathering and witness this cast of characters spewing their anti-American, anti-Israel, and anti-free-world diatribes while receiving loud accolades and encouragement from their many enablers.
They, along with putative U.S. European allies like France and Germany (who often place their national business interests with despotic governments over free world security interests), generally detest the United States standing as free-world leader and President Bush's stated national security strategy of defeating terrorism by promoting and expanding global freedom.
The General Assembly majority shrewdly uses democratic theory -- under the "one nation, one vote" concept enunciated in the U.N. Charter -- to protect their interests and oppose U.S.-supported positions -- while denying their own citizens the constitutional right to freely elect and replace government leaders.
To buttress and advance their national, regional and global agendas they have formed strong, intertwined U.N. alliances. And since the United States poses the greatest threat to their existence by advocating the expansion of freedom, they typically vote in blocs against this country.
For example, the 114-nation Non-Aligned Movement voted against the United States 85 percent of the time, the 56-nation Islamic Conference voted against 87 percent of the time and the 53-nation African Union voted against 86 percent of the time.
The State Department report also provides some other important facts. The United States authorized $13 billion in direct bilateral financial aid to 148 nations. Seven countries: Israel, Afghanistan, Columbia, Egypt, Jordan, Pakistan and Sudan received 57 percent of it. Israel voted with the U.S. 84 percent of the time. The six others collectively voted against the U.S. 88 percent of the time.
And what about the three Muslim countries U.S.-led coalitions liberated from invaders and oppressors at a cost of several thousand American lives and hundreds of billions of dollars in taxpayer expenditures? Afghanistan, Iraq and Kuwait expressed their independence, and ingratitude, by collectively voting against the United States 86 percent of the time.
America's European Union allies (25 nations) did somewhat better by voting against the United States only 57 percent of the time.
The majority of U.N. General Assembly members, over strong U.S. objections, have effectively blocked substantive and much-needed institutional reforms; refused to define deliberate attacks on civilians as terrorism; made Iran's terrorist state vice chair of the Disarmament Commission even though it actively pursues nuclear weaponry technology over Security Council objections; and placed human-rights abusers like China, Cuba and Saudi Arabia on the new Human Rights Council.
Fred Gedrich also reports that a February 2007 Gallup poll "indicated that 66 percent of surveyed Americans believe the United Nations is doing a poor job. It's the worst global body rating in Gallup polling history."
So perhaps now the majority of Americans would be willing to seriously consider Dan Riehl's advice. Perhaps it is time to seriously broach an idea that has been around for years, which is that the US take the lead in forming a "United Free Nations" international agency. In any event the United States should not continue on with things as they now stand at the United Nations.
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.
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.
Wednesday, April 18
China-Sudan: Francois Bayrou's courage; Steven Spielberg's betrayal of human rights.
The gusts died down late last night but for two days and nights the wind from the Nor'easter lashed at Washington, DC. The wind made a mournful wooooooooooo sound Monday night as it wuthered through the mail box opening, which only added to my feelings of sorrow and unease about the massacre in Blacksburg.
I'd had little sleep yesterday morning when I spied a lone copy of The Washington Times in a street vending machine. I plugged in a quarter then realized I'd bought a day-old paper. The editorial page carried a column by Nat Hentoff. The wind tried to rip the flimsy pages from my hands as I read. Something wet splashed on the newsprint; I looked up at the sky for rain then I realized it was my tears.
I'd had little sleep yesterday morning when I spied a lone copy of The Washington Times in a street vending machine. I plugged in a quarter then realized I'd bought a day-old paper. The editorial page carried a column by Nat Hentoff. The wind tried to rip the flimsy pages from my hands as I read. Something wet splashed on the newsprint; I looked up at the sky for rain then I realized it was my tears.
Khartoum's enablers in Beijing by Nat Hentoff
[...] The minuet of resolutions and meetings to end the mass murders and rapes in Darfur continues -- as does the genocide. For yet another example, United Nations Secretary-General Ban Ki-moon urges the United States and Britain to postpone stronger sanctions on the Sudan government so that he can arrange more time to convince President Omar Bashir to permit U.N. troops into his sovereign nation. But President Bush, reports Jackson Diehl in The Washington Post, has sharply told his envoy to Sudan, Andrew Natsios, to conceive of stronger sanctions.
Economic sanctions -- or travel curbs on Sudanese dignitaries -- have not and will not work so long as the Khartoum regime has Big Brother China as its vital economic partner -- sitting with veto power in the U.N. Security Council. China imports more than 60 percent of Sudan's bountiful oil output and has otherwise heavily invested in that nation's genocidal economy.
China, a ceaseless violator of the human rights of so many of its own citizens, is not going to be moved by a mere holocaust of black Africans in Darfur. And its complicity in these crimes against so much humanity has hardly blighted China's increasingly influential economic presence in other African countries and in Latin America while the corpses mount in Darfur.
However, as China moves steadily to replace the United States as the world's most powerful nation, China also desires worldwide respect as an eminently civilized nation with so long and rich a cultural history.
Savoring its delight in being selected as host of the 2008 Olympics, China created a slogan -- "One World, One Dream" -- for these ennobling events that will attract intense international attention on glistening Beijing. Memories of blood-soaked Tiananmen Square have faded around the world. But for those who remember, the Chinese government's massacre of thousands of students in June 1989 -- horrifying as it was -- pales in comparison with the more than 400,000 black Africans obliterated by China's close partner, Sudan, in Darfur -- along with the mass rapes of so many painfully surviving black African women.
I expect the present Chinese leaders -- as the glories of the 2008 Olympics approach -- would not want any references to their complicity in the ongoing holocaust in Darfur. It is because these horrors are unabated that Francois Bayrou, a leading candidate for the presidency of France, declares (Associated Press, March 22): "if this drama does not stop, France would do itself credit by not coming to the Olympic Games [in Beijing]."
This is not the only call for shaming the host of the 2008 Olympics. In an article in the March 28 Wall Street Journal, "The Genocide Olympics," human-rights activists Mia Farrow and Yale law student Ronan Farrow (both of whom have traveled to Darfur) call for corporate sponsors of the 2008 Olympics to recognize that: "... one thing that China may hold more dear than their unfettered access to Sudanese oil [is] their successful staging of the 2008 Summer Olympics. That desire may provide a lone point of leverage with a country that has otherwise been impervious to all criticism."
Mia and Ronan Farrow are appalled that "so many corporate sponsors [of the Olympic games] want the world to look away from that [genocide] atrocity during the games." The Farrows also cite "Steven Spielberg [who is preparing] to help stage the Olympic ceremonies to sanitize Beijing's image."
It astonishes me that the same Mr. Spielberg so admirably founded the Shoah foundation that records the testimony of the survivors of the Nazi Holocaust. How can he fail to make any connection with Shoah and the holocaust in Darfur?
The Farrows also ask whether "the various television sponsors [of the Beijing Olympics] want to share in that shame" of the host's complicity in genocide -- along with such American corporate sponsors of the games as Johnson and Johnson, Coca-Cola, General Electric and McDonald's.
Some of their customers might want to question their partnership with genocidal China.
Amnesty International, Human Rights Watch, Human Rights First and many other humanitarian organizations, religious groups and deeply concerned people around the world have been working insistently, without success, to stop this genocide. Focusing on the forthcoming Beijing Olympics, they can organize a last-chance rescue of the Darfur survivors by an international shaming of China. And I hope there will be nations who boycott the summer Olympics.
Only China can compel Lt. Gen. Bashir's National Islamic Front government of Sudan to stop the mass murders and rapes because only China has the economic force -- including its involvement in supplying holocaust-enabling weapons to the murderous Sudanese army and its barbaric janjaweed militia.
Whether this shaming propels China into recognizing its own humanity, organizing that focuses on the Olympics can be a transforming awakening of the world's conscience so that at last there can be a realistic "One World, One Dream" that never again will the nations of the world, to their own shame, have to say "never again" after the next genocide.
Tuesday, April 17
More advice for Captain Wolfy: throw Robin Cleveland and Juan Daboub overboard
The Wolfy saga has fallen off the Google headlines but it is roaring along in Europe. My favorite Brussels Guy, Alex Wilks, has revived his blog on the World Bank and with a vengeance. Go to World Bank President for all the news and gossip about Paul Wolfowitz's embattled presidency of the World Bank.
Alex provides a list of issues related to the furor, which gives the reader an idea of the scope of resistance to Wolfy's Bank leadership; follow the links and you'll get an education on current battles inside the global development community.
Wolfowitz's anti-corruption drive is on the right track but he has made serious mistakes since he's taken the helm at the World Bank. That's made it easy for opponents of strong Bank action on government corruption to garner support for ousting Wolfy.
The most frightening mistake was not blocking the appointment of Juan José Daboub, a former member of the ruling conservative party in El Salvador, to the position of the Bank's managing director. On April 13 the Financial Times reported
A pity Wolfowitz didn't make the statement until earlier, and directly to Daboub. It is unthinkable that after all the work done by countless organizations to raise awareness about the importance of condoms in warding off AIDS that the World Bank would tie loans to "family health" measures that exclude strong emphasis on contraception.
Wolfy should lobby for demoting Daboub or find a way to keep Daboub's paws off family planning issues at the World Bank.
As to Wolfy's hatchet man, Robin Cleveland (nicknamed "Dragon Lady") with about half the senior positions at the Bank shaken up and the rest fearing for their jobs, it's time for Wolfy to make some friends among what's left of the Bank's mandarins and pack off Ms Cleveland to GOP headquarters.
Alex provides a list of issues related to the furor, which gives the reader an idea of the scope of resistance to Wolfy's Bank leadership; follow the links and you'll get an education on current battles inside the global development community.
Wolfowitz's anti-corruption drive is on the right track but he has made serious mistakes since he's taken the helm at the World Bank. That's made it easy for opponents of strong Bank action on government corruption to garner support for ousting Wolfy.
The most frightening mistake was not blocking the appointment of Juan José Daboub, a former member of the ruling conservative party in El Salvador, to the position of the Bank's managing director. On April 13 the Financial Times reported
An internal [World Bank] e-mail, dated March 8, headed "[Managing Director] clearance" and obtained by the FT, said the managing director had made a request "to take out all references to family planning" from a country assistance proposal for Madagascar. [...]The same article reported that Wolfowitz "ruled out any change to reproductive health policy" and said, "I want to make it clear personally, I think reproductive health is absolutely crucial."
A separate draft proposal for a new worldwide health strategy due to be circulated at this weekend's bank meeting also places less emphasis on contraception than in the past, according to staff contacted by the FT.
Staff said the proposed changes were widely seen within the bank as a departure from long-standing strategy of promoting contraception to fight Aids in poor countries. The issue has revived internal discussion about pressure to alter policy on family planning to reflect religious teachings. [...]
A pity Wolfowitz didn't make the statement until earlier, and directly to Daboub. It is unthinkable that after all the work done by countless organizations to raise awareness about the importance of condoms in warding off AIDS that the World Bank would tie loans to "family health" measures that exclude strong emphasis on contraception.
Wolfy should lobby for demoting Daboub or find a way to keep Daboub's paws off family planning issues at the World Bank.
As to Wolfy's hatchet man, Robin Cleveland (nicknamed "Dragon Lady") with about half the senior positions at the Bank shaken up and the rest fearing for their jobs, it's time for Wolfy to make some friends among what's left of the Bank's mandarins and pack off Ms Cleveland to GOP headquarters.
Mookie-Maliki tiff: Don't be fooled by appearances warns a Syrian analyst
Sami Moubayed's analysis for the Asia Times is very interesting on many levels. It also gives Pundita hope that Iyad Allawi's political star is rising. I've never made a secret of my preference for Allawi as Iraqi PM.
Muqtada and Maliki as united as ever by Sami Moubayed
DAMASCUS - The relationship between Shi'ite cleric Muqtada al-Sadr and Prime Minister Nuri al-Maliki appeared to have taken a major downturn on Monday when Muqtada withdrew his six ministers from the cabinet. Appearances, though, especially in Byzantine Iraqi politics, can be deceptive,
In pulling out his ministers, Muqtada stressed his demand for a timetable for a US troop withdrawal from Iraq. Last December he "froze" his participation in the Maliki cabinet, to protest a meeting between the Iraqi prime minister and President George W Bush in
Jordan, only to return after Shi'ite ranks needed unification following the hanging of Saddam Hussein.
Monday's announcement was read by a seemingly confident Nasser al-Rubai of the Sadrist bloc. "The main reasons [for the Sadrist walkout] are the prime minister's lack of response to the demands of nearly 1 million people in Najaf asking for the withdrawal of US forces and the deterioration in security and services." On April 9, about a million Shi'ites, on Muqtada's call, marched in protest on the anniversary of the US invasion four years ago.
As long as Maliki fails to push hard for the Americans to leave, Muqtada said, there will not be any cooperation between the Sadrists and Maliki.
Significantly, though, Muqtada did not withdraw his 30 deputies from the 275-seat Parliament. Had he done that, it would automatically have brought down not only the Maliki cabinet but the entire Iran-backed United Iraqi Alliance (UIA) that heads Parliament and in which the Sadrists are a leading group.
Muqtada and Maliki apparently want the world to believe that they are no longer friends. They have not become enemies, however; at least not yet.
One of Maliki's advisors downplayed Muqtada's decision, saying that Muqtada was only practicing his "democratic right". She added, in what might explain why this break is not permanent, "Despite the difference in our views [with the Sadrists], our national vision is the same - only the methods of achieving it are different. We need to have real opposition from outside the government. This is a great beginning. The prime minister needs real opposition that can act as a watchdog inside Parliament."
Friends or foes?
Maliki's job is very much on the line. Apparently the decision-makers in Washington have decided to get rid of him if he does not bring stability and security to Iraq by June. That, anyway, is what officials at the US Embassy in Iraq told him in March.
Maliki therefore wants to create a bogyman in the form of Muqtada whom, he will tell the Americans, only he can tame. In short, Maliki wants to extract more aid and support from the US by playing up the "specter" of a "radicalized" Muqtada.
Muqtada gave an interesting interview to La Republica in January, explaining his relationship with Maliki - or at least how he wanted the world to see this relationship. He said: "Between myself and Abu Israa [an alternate name for Maliki] there has never been much feeling. I have always suspected that he was being maneuvered, and I have never trusted him. We have met only on a couple of occasions. At our last meeting he first told me: 'You are the country's backbone,' and then he confessed that he was 'obliged' to combat us. Obliged, you hear me?"
There is much to prove that he was bluffing. If Muqtada suspected that Maliki was "maneuvering" and there was "never much feeling" between the cleric and the prime minister, why did he join the cabinet in the first place in May 2006? Muqtada is ostensibly opposed to the entire political process, which he claims was imposed on Iraq after the downfall of Saddam in 2003. Yet having six ministers in the US-backed cabinet only legitimized the political process, as did having 30 deputies in Parliament.
The fact is Muqtada had much to gain from joining the political process, which he has now partially left. First, it gave him an official platform to recruit members and preach his ideology. He used organs of government, from the Ministry of Health and Education, which he controlled, to empower the Mehdi Army in a manner similar to how the Supreme Council for the Islamic Revolution in Iraq used - or some would say abused - the Ministry of Interior. The militias infiltrated the ministries and used them to settle scores with the Sunni community, and each other.
Maliki had much to gain from an alliance with Muqtada. It legitimized him in the eyes of ordinary Shi'ites. What better public relations could a US-appointed prime minister want than the blessing of a firebrand nationalist like Muqtada, who has launched two uprisings against the Americans since they invaded Iraq. It made Maliki look important in the Shi'ite community. Before becoming prime minister, he was a colorless and relatively unimportant member of the Da'awa Party and the UIA.
He had neither the intellect of former premier Ibrahim Jaafari, the religious legitimacy of Grand Ayatollah Ali Sistani or the nationalist credentials of Muqtada. An alliance with Muqtada gave him a little of everything that he lacked. It was a double-edged sword, however. It embarrassed him within Arab circles, which are controlled by Sunni states like Saudi Arabia, Jordan and Egypt, all of which see Muqtada as a young, inexperienced adventurer with a permanent grudge against Sunnis.
The behavior of the Sadrists at the execution of Saddam, and the fact that members of the Mehdi Army were allowed to attend the hanging, further damaged Maliki's standing in the predominantly Sunni Arab world. It ruined him forever in the eyes of Iraqi Sunnis, who were enraged at the killing of their former president.
That is why Maliki started to slowly detach himself from Muqtada - at least in public - to regain some credibility as a prime minister for all of Iraq, not only the Shi'ite community. This explains why shortly after Maliki announced his Baghdad security plan in February, Muqtada went into hiding, ostensibly fearing the prime minister's dragnet.
Both Muqtada and Maliki will want to maximize gains from the Sadrist walkout from the cabinet. Maliki will use it to polish his image both in Washington and in Arab capitals. Muqtada will use it to facelift his own image, because many have started to accuse him of being more interested in gains from the political process than in getting the Americans out of Iraq.
True he has lost some of his government platform, but he continues to have his powerful Mehdi Army, which, since coming to power in May 2006, Maliki has refused to disband, disarm or even weaken significantly. This despite cosmetic "raids" that are periodically launched against it by the Iraqi police. The stated reasons for Muqtada's walkout will give him a boost: he left in protest against the Americans in Iraq. That can do wonders to the career of any Arab politician.
Bush, who is due to receive congressional leaders from both parties at the White House this week, has nevertheless repeated that he does not plan to set a timetable for Iraq and will veto any legislation to that effect imposed on him by the Democrats.
Speaking on Muqtada's walkout, White House spokeswomen Dana Perino said, "If the Sadrists were to leave government, obviously they've said they would before and I understand that they have done that this morning - that does not mean that Maliki loses his majority. I think that's an important thing to remember."
So even the White House does not make too much of Muqtada's walkout. So Maliki, to use Muqtada's words in his January interview, is "maneuvering". But for what? Time? Legitimacy? For a new round of friendship with Muqtada when all else fails?
Ultimately, what unites Muqtada and Maliki is much more than what divides them. Both want a theocracy in Iraq. Both want the Americans to leave - although with different degrees of urgency. And both would dread a post-Maliki regime because most probably it would mean the return of former premier Iyad Allawi, who has promised to launch a deadly war against sectarianism, militias and Muqtada.
His record speaks for itself; he launched a bloody war against the Sadrists when he serving as prime minister in 2004. Sectarian politicians like Muqtada and Maliki dread the coming of the secular Allawi, who has frantically been trying to put together a coalition and convince both Arab regimes and the US administration to give him another go.
Muqtada, who has referred to Allawi as "the unbeliever who will soon succeed Maliki", sees Allawi as waiting for an opportune moment to strike at him and Maliki. He said, "We represent the majority of the country that does not want Iraq turned into a secular state and a slave of the Western powers, as Allawi dreams to the contrary."
As far as Muqtada and Maliki are concerned, they are willing to work with the devil - or each other - to defeat Allawi.
Sunday, April 15
Aboard the Black Pearl with Paul Wolfowitz
Whereupon Pundita hatches an Eleventh Hour plan to save Wolfy's job --
THE CAST
Paul Wolfowitz, World Bank President, as Captain of the Black Pearl
Hilary Benn, Britain's Secretary of State for International Development, as First Mate
Thierry Breton, France's Minister of Economy, Finance, and Industry, Second Mate
Peer Steinbrück, Germany's Minister of Finance, Third Mate
Hilary Benn: Pundita, I refuse to wear this ridiculous eye patch -- ow! the damn monkey just bit me!
Pundita: [soothingly] You make a very convincing pirate.
Paul Wolfowitz: I don't think I look as good in braids as Johnny Depp and the eyeliner is making my eyes water. I can't read my cue cards!
Pundita: [soothingly] Just remember you have top billing.
Thierry Breton: I get to play second mate!
Peer Steinbrück: No, I'm second mate!
Thierry Breton: No, I'm --
Pundita: All right, places everyone! Action!
[Long shot of the Black Pearl somewhere in the Atlantic Ocean. Cut to medium shot of the cast of characters on deck. Second and Third Mates hold Captain Wolfowitz at swordpoint while First Mate Benn pats the monkey perched on his shoulder and sneers at Wolfy]
VOICEOVER:
"A long, long time ago as news cycles go -- almost two years ago -- London was hit by a series of terrorist bombings. The next day, in a gesture of solidarity and sympathy with Britain, which had been pushing radical debt relief for hopelessly indebted poor countries, the G8 Ministers gathered at Gleneagles, Scotland made a stunning promise:
They agreed to forgive 100% of the $40 billion in debts owed by 18 HIPC (Heavily Indebted Poor Countries). The debts were owed to the International Monetary Fund, the World Bank, and the African Development Fund.
In the midst of back-clapping and handshakes, someone at the summit thought to mention that unless the World Bank was compensated for writing off the tens of billions in bad debt, the Bank wouldn't be able to finance ever more loans to the poorest nations.
The leaders of the G8 countries immediately promised to compensate the Bank "dollar for dollar" for the canceled repayments. The promise contained a loophole, however: the leaders at the G8 summit did not specify how much their country would contribute. The promise pretty much fizzled.
In early March of this year, World Bank President Paul Wolfowitz launched a campaign to hold the G8 governments to their promise. He wanted them to cough up close to $30 billion within a year for the World Bank. This, so that IDA (the Bank's International Development Association) three-year lending programs from 2008 for the poorest nations would be fully funded.
Britain, which already carries 60% of the funding for the IDA, groused that the United States should come up with the biggest share of the replenishment funds. The U.S. Treasury didn't see it that way, and neither did President Bush or anyone else in official Washington.
Then, by amazing coincidence, The Washington Post received some World Bank documents pertaining to the deal that Paul Wolfowitz worked out for his domestic partner and Bank employee, Shaha Ali Riza.
Ms. Riza was farmed out to the U.S. Department of State on a World Bank salary when Paul Wolfowitz came on board at the Bank as president. This happened because World Bank officials said that the two couldn't have any professional contact whatsoever at the Bank because of Bank rules.
The hairsplitting over the somewhat arcane Cone of Authority rule at the Bank upset Wolfy. He dug in his heels and refused to remove himself from all contacts with Riza at the Bank. The Bank mandarins dug in their heels in defense of their reading of the COA rule. Then Riza dug in her heels; she was mad that her career had to take a tumble just because her SO was the boss at the Bank.
The upshot was that Wolfy ordered the Bank's personnel department to give a big salary and annual raises to Riza while she was at State and to give her big promotions when she could return to work at the Bank. The size of the deal infuriated the World Bank Staff Association.
At first the publication of the internal documents didn't receive much public interest in the US, but it set off an uproar in Europe. In an effort to get out his side of the story, Wolfowitz instructed that all 109 pages of documentation pertaining to the deal be released. That only added to the furor and created more confusion about who at the Bank instructed whom to do what to resolve Riza's problem.
Today, the IMF and World Bank boards are taking a break from their usual business at the Spring meeting to discuss Paul Wolfowitz's fate at the Bank. While it's unlikely that the Bank board will fire Wolfy, they can force him to resign. Meanwhile, out at sea --
[Wolfy to Benn]: This is my ship, you dastardly mutineer!
Benn: [snickering] What self-respecting pirate captain lets hisself be tricked by World Bank mandarins?
Breton and Steinbrück: Aaaaaar! [prodding Wolfy onto the ship's plank] This fool deserves to walk the plank!
Wolfy to Benn: Wait! You got hold of those documents and leaked them!
Benn: On my oath as a pirate, I did not leak documents to The Washington Post!
Wolfy: Okay, you leaked them to the State Department and they leaked them to the Post!
Benn: [roaring] Lies, all lies! Off to the deep you go!
[Breton and Steinbrück use their swords to prod Wolfy farther out on the plank]
Wolfy: Pundita, I can't remember -- [the mates prod him farther] Wait! [Shrieking] Parley! I invoke the pirate's Right of Parley!
Breton and Steinbrück: [chanting in unison] He invokes the right to parley!
Benn: Make it snappy.
Wolfy: I promise to ask Henry Paulson --
Benn: Overboard he goes, mates!
Wolfy: Wait! I promise to beg Henry to okay a replenishment to the Bank of USD four billion --
[The monkey chatters furiously and the mates prod Wolfy to the edge of the plank]
Wolfy: Fifteen billion?
Benn: On your oath as a pirate?
Wolfy: A promise is a promise, as you know.
Benn to Breton: Hand me the satphone.
THE CAST
Paul Wolfowitz, World Bank President, as Captain of the Black Pearl
Hilary Benn, Britain's Secretary of State for International Development, as First Mate
Thierry Breton, France's Minister of Economy, Finance, and Industry, Second Mate
Peer Steinbrück, Germany's Minister of Finance, Third Mate
Hilary Benn: Pundita, I refuse to wear this ridiculous eye patch -- ow! the damn monkey just bit me!
Pundita: [soothingly] You make a very convincing pirate.
Paul Wolfowitz: I don't think I look as good in braids as Johnny Depp and the eyeliner is making my eyes water. I can't read my cue cards!
Pundita: [soothingly] Just remember you have top billing.
Thierry Breton: I get to play second mate!
Peer Steinbrück: No, I'm second mate!
Thierry Breton: No, I'm --
Pundita: All right, places everyone! Action!
[Long shot of the Black Pearl somewhere in the Atlantic Ocean. Cut to medium shot of the cast of characters on deck. Second and Third Mates hold Captain Wolfowitz at swordpoint while First Mate Benn pats the monkey perched on his shoulder and sneers at Wolfy]
VOICEOVER:
"A long, long time ago as news cycles go -- almost two years ago -- London was hit by a series of terrorist bombings. The next day, in a gesture of solidarity and sympathy with Britain, which had been pushing radical debt relief for hopelessly indebted poor countries, the G8 Ministers gathered at Gleneagles, Scotland made a stunning promise:
They agreed to forgive 100% of the $40 billion in debts owed by 18 HIPC (Heavily Indebted Poor Countries). The debts were owed to the International Monetary Fund, the World Bank, and the African Development Fund.
In the midst of back-clapping and handshakes, someone at the summit thought to mention that unless the World Bank was compensated for writing off the tens of billions in bad debt, the Bank wouldn't be able to finance ever more loans to the poorest nations.
The leaders of the G8 countries immediately promised to compensate the Bank "dollar for dollar" for the canceled repayments. The promise contained a loophole, however: the leaders at the G8 summit did not specify how much their country would contribute. The promise pretty much fizzled.
In early March of this year, World Bank President Paul Wolfowitz launched a campaign to hold the G8 governments to their promise. He wanted them to cough up close to $30 billion within a year for the World Bank. This, so that IDA (the Bank's International Development Association) three-year lending programs from 2008 for the poorest nations would be fully funded.
Britain, which already carries 60% of the funding for the IDA, groused that the United States should come up with the biggest share of the replenishment funds. The U.S. Treasury didn't see it that way, and neither did President Bush or anyone else in official Washington.
Then, by amazing coincidence, The Washington Post received some World Bank documents pertaining to the deal that Paul Wolfowitz worked out for his domestic partner and Bank employee, Shaha Ali Riza.
Ms. Riza was farmed out to the U.S. Department of State on a World Bank salary when Paul Wolfowitz came on board at the Bank as president. This happened because World Bank officials said that the two couldn't have any professional contact whatsoever at the Bank because of Bank rules.
The hairsplitting over the somewhat arcane Cone of Authority rule at the Bank upset Wolfy. He dug in his heels and refused to remove himself from all contacts with Riza at the Bank. The Bank mandarins dug in their heels in defense of their reading of the COA rule. Then Riza dug in her heels; she was mad that her career had to take a tumble just because her SO was the boss at the Bank.
The upshot was that Wolfy ordered the Bank's personnel department to give a big salary and annual raises to Riza while she was at State and to give her big promotions when she could return to work at the Bank. The size of the deal infuriated the World Bank Staff Association.
At first the publication of the internal documents didn't receive much public interest in the US, but it set off an uproar in Europe. In an effort to get out his side of the story, Wolfowitz instructed that all 109 pages of documentation pertaining to the deal be released. That only added to the furor and created more confusion about who at the Bank instructed whom to do what to resolve Riza's problem.
Today, the IMF and World Bank boards are taking a break from their usual business at the Spring meeting to discuss Paul Wolfowitz's fate at the Bank. While it's unlikely that the Bank board will fire Wolfy, they can force him to resign. Meanwhile, out at sea --
[Wolfy to Benn]: This is my ship, you dastardly mutineer!
Benn: [snickering] What self-respecting pirate captain lets hisself be tricked by World Bank mandarins?
Breton and Steinbrück: Aaaaaar! [prodding Wolfy onto the ship's plank] This fool deserves to walk the plank!
Wolfy to Benn: Wait! You got hold of those documents and leaked them!
Benn: On my oath as a pirate, I did not leak documents to The Washington Post!
Wolfy: Okay, you leaked them to the State Department and they leaked them to the Post!
Benn: [roaring] Lies, all lies! Off to the deep you go!
[Breton and Steinbrück use their swords to prod Wolfy farther out on the plank]
Wolfy: Pundita, I can't remember -- [the mates prod him farther] Wait! [Shrieking] Parley! I invoke the pirate's Right of Parley!
Breton and Steinbrück: [chanting in unison] He invokes the right to parley!
Benn: Make it snappy.
Wolfy: I promise to ask Henry Paulson --
Benn: Overboard he goes, mates!
Wolfy: Wait! I promise to beg Henry to okay a replenishment to the Bank of USD four billion --
[The monkey chatters furiously and the mates prod Wolfy to the edge of the plank]
Wolfy: Fifteen billion?
Benn: On your oath as a pirate?
Wolfy: A promise is a promise, as you know.
Benn to Breton: Hand me the satphone.
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