The Real Reason Paul Wolfowitz Is Wanted Out Of World Bank

The story so far: Paul Wolfowitz, President of the World Bank, and US deputy defence secretary during the invasion of Iraq, arranged for his girlfriend to move from the World Bank to another place of work, and so comply with the employment rules. She remains on the payroll. And because she was reluctant to move, she was offered more money.

The World Bank is cracking down on corruption. Some see this as reason to remove Wolfowizt. But Andreas Whittam Smith (”The real sins of Wolfowitz at the World Bank”) sees something else.

Mr Wolfowitz arrived with a passion for fighting corruption. He argues that corruption saps economic life from the world’s poorest nations. And he has been prepared to withhold aid until countries tackle the problem.This runs smack into the Bank’s ethos. The Bank has always acted on the assumption that fighting poverty comes first even it knows that a particular leader will take a slice of any new funds to finance a lavish lifestyle. Mr Wolfowitz, on the other hand, wanted to make “governance” a priority equal to, or even ahead of, poverty alleviation. Indeed, he could be right. It may be that cleaning up governance is at least as effective in relieving poverty as are loans for infrastructure projects, because the former also encourages wealth generation.

And:

The explosive issue is that Mr Wolfowitz has begun to undermine the Bank’s identity. The change started with something very simple. He brought a small group of advisers with him from the Pentagon. His two top aides had worked with him there. These appointments suggested that perhaps Mr Wolfowitz had come to the World Bank in order to carry out American foreign policy - by a different means, in parallel with the Bush administration.

And, subsequently, evidence has accumulated that supports this suspicion Uzbekistan’s aid was suspended after it ousted American troops in 2005. Moreover, Mr Wolfowitz’s passion for fighting corruption seemed to evaporate when it came to reviewing lending to Iraq, Pakistan and Afghanistan, three countries that the United States considers strategically vital.

Anorak

Posted: 8th, May 2007 | In: Twitterings Comments (3) | Follow the Comments on our RSS feed: RSS 2.0 | TrackBack | Permalink