Africa-related Events in the Washington, D.C. Metro Area
Policy . Politics .
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"Making Leaders".
The Economist. 24 July 2003.
ALPN director, Dr. Michael
Isimbabi's letter in response to
The Economist's cover story,
"Now
for Africa" (03
July 2003).
African Leadership &
Progress Briefs
New
Addressing Africa’s
Humiliation: 'Brain Gain'/'Brain Circulation' Diaspora Networks for
African Progress
New
After the 2005 G8 and UN Summits: Independent,
High-Impact Information Infrastructures and Networks for Transparency
and Accountability in African Countries
Leadership & Governance Capacity Building in
African Countries: Why
and How Well-Off and Accomplished Africans, Especially "Brain Drain"
Africans, Should Proactively Take Charge of Fostering African Progress
Africa & the G8 - 2005 G8 Summit -
Reports, Commentaries, Analyses
Brain Drain, Brain Gain,
Brain Circulation, Diaspora Africans, and Capacity Building in Africa
The World Bank,
Corruption, and Governance in Africa
Wolfowitz: Africa is Top Priority for the World Bank: Newshour with
Jim Lehrer Interview - 31 March 2005 (Video, Audio & Transcript).
Jim Lehrer speaks to Paul Wolfowitz about his confirmation as the next
president of the World Bank.
******
"...And so
let's, especially those of us from so-called the rich countries,
developed countries, let's hold a mirror up to ourselves and remember
every corrupt transaction has two parties. (Applause.) If I can coin a
term there is a corruptee and there is a corruptor. (Laughter,
applause.) And if the African people and their leaders are stepping up
to the challenge of dealing with the corruptees, we, if I can speak as
a citizen of a developed country - those of us in the developed world,
in fact anywhere in the world, have responsibility to address
corruptors as well. And to help African countries, as the Nigerian as
(sic) seeking to do now, to recover some of the stolen wealth that is
sitting in bank accounts where it doesn't belong. (Applause.) ..."
Corruption Takes Two, Wolfowitz Tells Business
Leaders. Text of remarks by World Bank President Paul Wolfowitz at
the Corporate Council on Africa's US-Africa Business Summit Dinner,
Baltimore, Maryland, USA. June 23, 2005.
******
“I think there is a real chance now that the
poorest countries in Africa can turn the corner, that Africa can
become a continent of hope...The responsibility to deal with
corruption is not just something for African governments and African
people...The developed countries have a huge responsibility as well.
They have a responsibility I think to help the poor countries in
Africa recover some of the assets that have been taken from them and
deposited in banks in developed countries.” Wolfowitz said there must
be a recognition that “every corrupt transaction has two parties to
it.” “We all have a responsibility to try to crack down on both ends
of these transactions.”
Tackle African corruption, says World Bank boss.
July 06, 2005
******
Meeting the Challenge of Africa’s
Development: A World Bank Group Action Plan. September 2005
"...Building
capable and honest states involves fostering transparency,
accountability and voice, but also requires improving the performance
of key state institutions. Strengthening effective in-country capacity
building and governance—especially regarding budgetary expenditure and
revenue management, as well as strengthening institutions that check
corruption—are at the core of the Action Plan..."
Bank Information Center (BIC) - Africa Page
BIC's Wolfowitz Watch
Webpage - Monitors New World Bank President
World Bank Pages/Sites
World
Bank Institute's "Governance & Anti-Corruption" Website
World
Bank Institute (WBI) - Governance Indicators, Research
Cleaning up the World Bank. U.S. News and World
Report. Edward T. Pound and Danielle Knight. 24 March 2006.
A Corrupt French Connection. Sebastian Mallaby.
Washington Post. March 13, 2006
Last year was celebrated as the "Year of Africa." Tony
Blair proposed a doubling of aid to the continent; the world's rich
nations promised debt elimination; and the Bush administration talked
up its remarkably good record in boosting foreign assistance. But 2006
is shaping up as the year of "What to do with Africa?" as donors
grapple with the challenge of making aid work. And unless the
development institutions demonstrate that they can spend the money
effectively, 2007 may be the year in which Africa is once again
abandoned....Whatever the French bank's role, Congo's corruption
appears not to offend the French government, which has led the charge
to grant Congo debt relief even though the evidence of its
unworthiness has been reported in the French press. In a detailed
article in December, the French daily La Tribune explained how
millions had been siphoned out of the national oil company and how yet
more millions failed to make it from the national oil company to the
national treasury. But, as La Tribune noted, President Jacques Chirac
and Congo's ruling strongman are old friends....
This is a scandal, and it's hard to
see why the rich world's taxpayers should tolerate even a hint of debt
relief for Congo. Last year the country earned more than $2 billion
from oil, or $600 per person; if it spent that money competently, it
would not have two-thirds of its people living below the $1-a-day
line. But rather than send that message, the World Bank and the IMF
have cut Congo's debt payments and held out the hope of outright debt
cancellation, provided that the country meets various anti-corruption
conditions. In the past, Congo has mocked such conditions. It would
probably mock them in the future the day after full debt cancellation
went through.
Why does this seem likely? Because
you don't have to guess what Congo's president thinks of the fight for
transparent government. In an interview in February, he dismissed the
critics of corruption as "people who search for lice in the heads of
this country's authorities."
Wolfowitz's Corruption Agenda. Sebastian Mallaby.
Washington Post. Feb 20, 2006
In the past
few months, there have been hints of fresh thinking on corruption. Now
the evidence has reached critical mass: The change appears to be
genuine. ....Wolfensohn denounced the "cancer of corruption" in 1996;
and the bank's even bomb-happier chief economist, the Nobel laureate
Joe Stiglitz, gave speeches attacking the narrow economic
understanding of development and proclaiming the centrality of
politics.
Speeches are one thing, action quite another. The Wolfensohn bank
developed state-of-the-art corruption indexes, which are now used by
the U.S. government to identify which countries deserve extra foreign
assistance; it created a department to investigate malfeasance in bank
projects. But the anti-corruption unit was understaffed and
ineffectual, and the bank did not build on Wolfensohn's cancer talk by
cutting off corrupt borrowers consistently. Excuses were found.
Lending frequently continued.
In a series of
tough decisions, some of which have been widely reported and some of
which have not, Wolfowitz has challenged this culture....
In sum,
Wolfowitz's World Bank presidency, which had seemed to lack an
organizing theme, has acquired one. The new boss is going to be tough
on corruption, and he's going to push this campaign beyond the
confines of the World Bank; on Saturday he persuaded the heads of
several regional development banks to join his anti-corruption effort.
The Corruption Crusader. The Guardian (UK). March 13, 2006
The new head of the World Bank is ruffling feathers, but his
intolerance of crooked politicians should be applauded, writes Salil
Tripathi. Paul Wolfowitz, who came to head the World Bank after
working at another large bureaucracy - the Pentagon - has an
insurgency on his hands. Dissatisfied bank staff are circulating
emails complaining about new senior-level appointments and new
procedures that change the old way of doing business. But compared
with the streets of Baghdad, the area around Farragut North in
Washington DC is calm because Wolfowitz's target is corruption, which
nobody defends. Wolfowitz has suspended loans to powerful countries,
strengthened the internal department of institutional integrity,
reshuffled officials, and brought in new staff with the aim of making
the organisation - and its borrowers - accountable. But instead of
cheering such well-intentioned efforts, some officials at the bank are
crying foul. Officials are grumbling about outsiders being brought in
and bemoaning the fact that some established experts are leaving.
However, Wolfowitz is on the right track on corruption. For too long,
aid money has been squandered by unscrupulous officials and he appears
to be keen to turn that around. In recent months, loans to Argentina,
Bangladesh, India, Kenya and Uzbekistan have been put on hold. The
bank's disbursements to Chad have been suspended after the African
country went back on its commitment to use revenues from a
controversial pipeline with Cameroon only for agreed development
targets. Some directors rightly pointed out that the bank could not
impose new conditions. But as theatre, the move was impeccable and
well-timed, and underlined the fact that many leaders from the
developing world are not the misunderstood and well-intentioned
leaders some would like us to believe.
Wolfowitz's Anti-Corruption Hoax at the World Bank.
Patrick Bond. March 8, 2006.
...There
is no question that Wolfowitz quickly learned to talk 'left' about
unfair trade subsidies, meagre US aid and corruption. Whether this was
merely superficial rhetoric, veiling the sinister agenda of the petro-military
complex, would soon be tested....Surprisingly
perhaps, this [Chad] case of petro-military alignment was
resolved--temporarily--against the World Bank's allies in a repressive
regime and multinational oil corporations. Wolfowitz apparently
required a dose of public credibility in what was Africa's
highest-profile financing dispute. Cynics might add, on the other
hand, that the other crucial function of the clampdown was to impose
Bank discipline on an errant country, in the process sending a tough
lesson to others, that they must obey Washington's orders......With
these diverse examples, what can we conclude about the dire state of
international financial governance?
Wolfowitz
cannot be trusted, and although his minor anti-corruption
sweep is causing staff anxiety, there is no indication that
deeper-rooted problems at the Bank will surface, through, for example,
whistleblower protection that is now being widely called for by
watchdog groups.
No money for corrupt governments - Wolfowitz. March 8,
2006. Adedapo Olawunmi. Business Day (Nigeria).
World Bank President, Paul Wolfowitz appears to be
putting words into action, saying corrupt governments will no longer
have access to aid money, according to World Bank sources. It is
reported that in a short period of time, the World Bank boss would
halt disbursement of aid money to a number of projects out of the
uncertainty that the money would be well spent.
Uganda's divestiture programmes have suffered a setback
after the World Bank declined to extend its technical support to the
Privatisation Unit. The Bank cites political interference, lack of
transparency and the sluggish pace of disposal of public assets as the
reasons for its decision.
The recent collapse of
the World Bank’s “model” petroleum development project in Chad
underscores the vulnerability of the poor as the primary bearers of
risk and highlights the pitfalls of promoting extractive industries in
countries lacking political stability, history of respect for human
rights, or functioning mechanisms of public accountability.
John Githongo's recent revelations about corruption in
Kenya are timely and welcome. What most people do not realize is that
in most 3rd world countries corruption is top-down-bottom-up i.e. it
originates from the president, and over 95% of acts of corruption (by
value) result in a large (typically 80%) share of the proceeds going
back up the ladder directly to the president. The 20% share stays with
the perpetrator of the corruption; and the 80% guarantees that the
perpetrator enjoys protection at the highest level. The illegal income
of the average 3rd world president is usually composed of many many
such scams, some very large and others comparatively small. I state
the above based on personal experience while working on World Bank and
EU Projects in Uganda and Tunisia in 2005. ...While we in the West are
congratulating ourselves, we should consider the role of our oil
companies (especially Shell), our mining companies, and of course the
international diamond monopoly, de Beers. These people instigate and
collaborate with corruption in order to make 3rd world presidents rich
and their people poor; their top management of course benefit, and in
some cases their shareholders.
The World Bank and Corruption. The Economist.
March 2, 2006
When George Bush nominated Paul Wolfowitz to head the
World Bank a year ago, plenty of people worked themselves into a
tizzy. Would the former deputy defence secretary turn the world's top
aid agency into an arm of American foreign policy? Would the
intellectual architect of the Iraq war make as much of a hash of
fighting poverty as his former employers had made of governing Iraq?…
America's wolf puts on sheep's clothing. Daily
Telegraph (UK). 02 March 2006
...Mr Wolfowitz rejects the view that Africa is for
ever stuck in poverty because, unlike Asia, it does not have a history
of commerce. He has seen everything change in Asia: "The other day I
was talking to the 45-year-old foreign editor of a newspaper and he
had never heard the phrase 'oriental fatalism'. It's gone - look at
Korea, Taiwan, Indonesia, India." If you can work on the civil
society, he thinks, you can produce economic growth...
Wolfowitz: No Money For Corrupt Governments.
February 28, 2006
World Bank President Paul Wolfowitz is putting words
into action: corrupt governments can say good-bye to aid money,
reports Dutch daily Volkskrant. In a short period of time, Wolfowitz
halted disbursement of aid money to a number of projects out of
uncertainty the money would be well spent. Nongovernmental
organizations are full of praise for his fight against corruption. “It
is fantastic that Wolfowitz takes the fight against corruption so
seriously,” says Huguette Labelle, the President of Transparency
International.
Chad's Oil Riches, Meant for Poor, Are Diverted. New
York Times. February 18, 2006
...Students from the Institute of Mongo have everything
they need to learn: desks, computers, professors, notebooks and
inquisitive minds. The only thing missing is the school itself. Their
country's newfound oil wealth is supposed to build it in their
hometown, about 275 miles east of here, but after three years it is
still not ready. So they study in borrowed classrooms here in the
dusty capital. ''It's a long time we wait, but this is Chad,'' said
Abdelraman Choua, 22, a computer science major from Mongo. ''We are
always waiting.'' Such is reality under a World Bank-supported program
that was supposed to harness this impoverished African nation's oil
wealth for the benefit of its poorest citizens. A $4.2 billion oil
pipeline has generated $399 million for Chad since mid-2004, but the
spending of the money has been seriously marred by mismanagement,
graft and, most recently, the government's decision that a hefty share
can be used to fight a rebellion. And now the approach, once
envisioned as a model for the development of other African countries,
seems to be on the verge of collapse. In recent weeks, Chad seriously
weakened a law that dedicated most of its oil revenue to reducing
poverty and reneged on its deal with the World Bank. In response, the
bank suspended all its loans to the country. What is happening in
Chad, a Central African country twice the size of France, is an
important test of the idea that international institutions like the
World Bank can influence governments of poor countries to spend newly
tapped riches on their people instead of using the money to further
entrench themselves in power. The proposition is particularly
challenging as oil prices surge, because now nations like Chad can
attract investors who make few or no demands on how the profits are
spent.
The Government Accountability Project (GAP) today
released the “Vaughn Report,” commissioned by the World Bank as a
blueprint to modernize that institution’s inadequate whistleblower
protection policies....In the nine months since the World Bank
received this blueprint for reform, it has refused to publicly release
the report, consult staff on Vaughn’s recommendations, or accept any
offers from experts to help implement Vaughn’s analysis. The World
Bank rejected a direct request from U.S. Senate Finance Committee
Chairman Charles Grassley (R-Iowa) who oversees the Treasury
Department’s funding of and participation at the MDBs. Senator
Grassley is widely recognized as the conscience of whistleblowers in
the Senate. Senator Grassley reached out to new World Bank president
Paul Wolfowitz, calling on him to join in the battle to prevent waste,
fraud and abuse. All of this continues the pattern of the World Bank
rhetorically promoting transparency while maintaining secrecy on
management proposals to combat corruption.
Exxon
Faces
Dilemma
In Chad
- Agreement To Avoid `Oil Curse' May Break Amid Royalties Fight
In the late 1990s, Exxon Mobil Corp., the World Bank and Chad hammered
out a deal that was held out as a model for how to avoid the so-called
oil curse, in which a poor nation's newfound oil wealth often leaves
its people no better off -- and sometimes worse. But that deal is now
crumbling, and Exxon finds itself caught in the middle of a fight
between the Bank and Chad as the company debates what to do with as
much as $50 million of oil revenue it owes the country, reports The
Wall Street Journal.
The standoff has big financial stakes for the petroleum industry, the
poor African country and others like it. Exxon has two choices, both
bad: hold back the money, which could lead Chad's government to shut
down production at the company's operations there, or hand it over,
which could land Exxon in hot water with the World Bank and
nongovernmental-agency activists. Chad recently signaled it would
order Exxon to shut down production if it doesn't release the
royalties directly to the government, according to one person familiar
with the situation. That would throw into question the future of the
$4.1 billion oil project -- one of the biggest private-sector
investments ever in sub-Saharan Africa.
The World Bank and many advocacy groups want Exxon to stick to the
original agreement, to underscore the importance of transparent
handling of oil revenue in developing nations. Exxon and the oil
industry have touted the deal as a model for fostering corruption-free
natural-resources industries. Susan Reeves, an Exxon spokeswoman, said
in an email response to a list of questions that the company is in
discussions with the World Bank and Chad and is "hopeful that this
dialogue will help resolve outstanding issues between the two
parties."
Taking on Corruption. Editorial. Washington Post. February 24,
2006
THE WORLD Bank's board faces a decision on debt relief today that has
broad ramifications for development. The Congo Republic, a small oil
state, hopes to win approval of a reduction in its debt , and by some
measures it may deserve that. Under the rules governing debt relief, a
country whose debt is worth 2 1/2 times its government revenue
qualifies for forgiveness, and a team from the International Monetary
Fund has determined that Congo meets this standard. But Congo's
corrupt government keeps part of its oil revenue from showing up on
its books, raising questions as to whether it deserves forgiveness.
The World Bank's president, Paul D. Wolfowitz, rightly argues that
debt relief should be delayed. The governments that sit on the bank's
board, including African representatives and the Europeans who often
support them, should accept Mr. Wolfowitz's position.
Congo's efforts to hide oil revenue have been amply documented. The
British watchdog group Global Witness has described a network of shell
companies established to keep money away from creditors. KPMG, the
auditor of Congo's state oil company, has refused to sign off on its
accounts three years running. In a memo explaining the finding that
Congo met the test for debt relief, the International Monetary Fund
concedes that "oil revenues continue to be diverted for other uses and
do not reach the treasury." Congo's supporters on the World Bank's
board argue that the country has met the objective test for debt
relief and should not be kept waiting. It's hard to take this
seriously.
Mr. Wolfowitz's proposed remedy is moderate. He suggests that
Congo should adopt measures to reduce oil corruption, a position with
which even Congo's defenders concur. But rather than having this
trigger an immediate and irrevocable $2 billion worth of debt relief,
Mr. Wolfowitz wants Congo to implement the anti-corruption measures
for three years before getting full debt reduction. In the meantime,
relief would flow into a carefully monitored poverty-reduction fund.
This would allow Congo to reap some development benefits while
maintaining incentives to fight corruption, at least for three years.
Given that Congo is benefiting in the meantime from high oil prices,
this hardly seems draconian.
The larger issue behind this fight is the seriousness with
which donors are willing to take on corruption. Big strides have been
made over the past decade in acknowledging that corruption is a
problem, but, too often, corrupt countries have been indulged by
donors. If Congo's allies on the World Bank's board get their way
today, the see-no-evil faction will have won. Better to proceed slowly
on Congo -- and send a needed wake-up call to other corrupt countries.
The Next Big Scandal: Foreign Aid is Fueling Corruption.
Richard W. Rahn.
Washington Times, Feb 16, 2006
Anti-corruption organizations, such as
Global Witness and
Publish What You
Pay (a coalition of 280 NGOs), oppose Congo’s petition for debt
relief, because it is corrupt, impoverishes its people and probably no
longer meets the definition of a “Highly Indebted Poor Country.” Congo
claims it meets the definition based on 2003 income data; but most of
its income derives from oil. Given the massive increase in oil prices
of the last two years, shipping records show the country’s gross
income is up about fourfold. If the IMF, World Bank, U.S. and European
governments accept the 2003 data, they will be complicit in the
Enronization of development aid.
The independent auditors, KPMG, cannot certify Congo’s accounts
because the country will not provide access to books and records; and
it appears about a third of the oil revenue has not been properly
accounted for. Congo’s prime minister admitted after the London court
judgments use of “unorthodox” accounting procedures (i.e., theft). To
no great surprise, the French are behind the effort to certify Congo,
because it is a French client state, the French oil company “Total”
lifts most of the oil, and France has other strong commercial and
banking interests there.
If the U.S. and European countries certify Congo for debt relief, the
scandal is likely to play out as follows: There will be many more
press stories about how a highly corrupt regime (and there may be
others) was given debt relief, greatly undermining the anti-corruption
efforts in development aid, while costing the European and American
taxpayers tens of billions of dollars. (Another oil-for-food type
scandal – but this time directly implicating the U.S. and European
governments.)
Breaking Ranks at the World Bank. February 17, 2006
After years of promoting market deregulation, the World Bank finally
admits the limited effects of these policies on reducing poverty.
According to a World Bank report, Latin America’s high poverty and
inequality can explain the region’s bad economic performance over the
last few years. The report encourages governments to assure a more
equal income distribution. However, it remains unclear if the World
Bank will back up its new thinking with real action.
Discussing The World Development Report: Does Anyone Need It?
Pambazuka News.
October 27, 2005
Usually, the World Development Reports reflect the “most progressive
face” of the World Bank. Still, the 2006 report, which focuses on
“Equity and Development,” fails to mention how the Bretton Woods
Institutions themselves caused inequality through strict privatization
and deregulation policies. Furthermore, the report offers “unhelpful
prescriptions” to address inequality in the future.
World Bank Slammed for Retreating on Whistleblower
Protections. Emad Mekay. Inter Press Service News Agency (IPS), Feb
11 2006
The world's largest development agency, the World Bank,
should end a culture of intimidating its whistleblowers and adopt
smoother mechanisms for reporting wrongdoing within the institution,
says an internal report leaked Friday by a watchdog group.
The rhetoric may be
flying, with outbursts over "a fool's agreement" and "neo-colonialist
and imperialist behaviour," but most observers believe the oil row
between the Chadian government and the World Bank will end in a
face-saving compromise. The stand-off began in December when Chad's
parliament passed an amendment to the law governing how oil revenues
can be spent, prompting the World Bank to suspend $124 million in
loans and cut the flow of petrodollars to the landlocked, impoverished
country.
Wolfowitz 'to target corruption'. BBC News.
7 February 2006
....World Bank President Paul Wolfowitz
has sworn to crack down on corruption by governments and officials in
developing world nations where the bank operates. He has also promised
to examine any irregularities within the bank itself, vowing to tackle
"difficult issues". Speaking to employees worldwide, Mr Wolfowitz said
the bank had to move "more decisively and energetically". He said the
bank was withholding loans worth $250m (£143m) to Kenya, which is
embroiled in a high-level scandal. ..."There has to be a lot of
teething problems to go from a world where for 50 years the word
corruption wasn't uttered in this institution to actually doing
something about it. It doesn't happen by snapping your fingers," he
said. "I must say I think it was horribly overdue...
Wolfowitz pledges rigorous anti-corruption campaign.
Reuters. 07 Feb 2006
World Bank
President Paul Wolfowitz on Monday promised a rigorous -- and vocal --
campaign against corruption in developing countries the bank lends to
and inside the bank itself. In a 90-minute staff meeting, beamed to
World Bank offices around the globe, Wolfowitz also defended the
recent appointments of certain senior managers and advisers that have
been criticised by some employees. Wolfowitz said the bank needed to
move "more decisively and energetically" against corruption and staff
members should be praised when they raised concerns about corruption
in projects.
A
leaking ship: The role of debt, aid and trade Charles Abugre.
Pambazuka News. 02 February 2006
The more
debilitating impact of development aid is what it does to the
mentality of the African elite and to the democratisation and
accountable governance process. Governments have developed the myth
that their economies cannot survive without aid. In reality it is
their governments and the patronage systems that maintain them which
are under threat without the aid machinery.
The competition among African governments for inclusion in the club of
favoured nations leads to wilful abandonment, to donors, of
sovereignty won at the cost of lives in the anti-colonial struggle.
The multi-donor budget support arrangement is one manifestation of
this loss of sovereignty. Without a break in the aid dependency
mentality Africa stands no chance of building democracy based on
accountability to citizens. Worst still, the imagery that aid agencies
– private and official – find necessary to deploy in order to sustain
domestic political interest for aid is often an affront to the African
personality and spirit, diminishes the African self-worth and
perpetuates negative stereotypes. Whilst we cannot ignore aid, we
should not be glorifying it.
Sometimes we in civil society contribute unconsciously to the erosion
of sovereignty and the loss of self-worth. We are sometimes quick to
demand or endorse “governance conditionality” where aid and debt
relief is made conditional to progress in these areas. To monitor
compliance often requires even greater involvement and power of donors
in domestic governance. It is like saying that new forms of
colonisation are acceptable on human rights grounds. This is
dangerous. Yet, there are cases where human rights abuses,
dictatorship and corruption are at such a level that the impact of
debt relief and aid will be to strengthen repression and enrich a few
than promote development. What do we do under this situation?
World Bank President
Paul Wolfowitz, who has sought to cast himself as a champion of
transparency, is facing accusations that his office is suppressing a
report on a Bank-backed mining project in Africa that allegedly
contributed to the deaths of dozens of people. Watchdog groups say
that violence has marred the Dikulushi Copper-Silver Mining Project in
the Democratic Republic of Congo (DRC) where the bank's guarantee arm,
the Multilateral Investment Guarantee Agency (MIGA), provided 13.3
million dollars of political risk insurance to the Australian company,
Anvil Mining, running the mine....
When
in July 2005 the Group of Eight countries announced their decision to
double aid and debt relief to Africa, they pontificated to the rest of
the world about the importance of reducing
corruption.
Even a glancing peek at the hard data suggests they might have
accomplished more by lecturing each other.... The chapter on 'Myths
and Realities of Governance and
Corruption'
of the World Economic Forum's 'Global Competitiveness Report
2005-2006' concludes it is a big mistake to believe that the
governments of developing nations alone set 'the rules of the game'.
To the contrary, Daniel Kaufmann, Director of Global Programs at the
World
Bank
Institute, points out, powerful private interests use their wealth to
exert undue influence in shaping public policy. In extreme cases they
achieve complete control of state institutions.
World Bank delays $260m loans to Kenya. 31 January
2006. Sapa-AFP
The World Bank has delayed the release of about
$260-million in loans to Kenya over corruption concerns amid new graft
allegations that have rocked the East African nation, officials said
on Tuesday. The money, approved in October 2004 and earmarked for
education, banking reform, budget support and HIV/Aids programmes,
will not be disbursed until the institution is convinced that
President Mwai Kibaki's government is meeting commitments to fight
corruption, they said.
World Bank 'toadying to the corrupt'. The Times
(UK), January 30, 2006.
Britain's former envoy to Kenya is angry at a £68
million loan to a Government accused of corruption. Sir Edward Clay,
the outspoken former British envoy to Kenya, let rip at the World Bank
yesterday for lending $120 million (£68 million) to President Kibaki’s
Government when it was embroiled in a massive corruption scandal. In a
letter to Paul Wolfowitz, the President of the World Bank, Sir Edward
accused the organisation of “toadying to a thoroughly corrupt
administration” and said that last week’s loan made a mockery of
efforts to stamp out high-level looting.
Kenya 'safe' for anti-graft czar. BBC News. 26
January 2006
...On
Wednesday, the World Bank urged Kenya's president to take tough action
against any cabinet ministers found to be corrupt. The warning came as
the World Bank approved a new $25m loan to help fight corruption - a
decision slammed by former UK Kenya envoy Sir Edward Clay. Sir Edward,
who has condemned Kenya for not tackling graft, said the new loan
would feed the "pig of corruption". ...
Why
Liberals Should Be Applauding Wolfowitz. Bank Statement. The New
Republic Online. Jan 24 2006.
It's
not front-page news, but Paul Wolfowitz is taking on a dictator again.
And liberals, many of whom were aghast last year that an architect of
the Iraq war had been tapped to lead the World Bank, should be
applauding. In fact, some already are.
Wolfowitz triggers graft storm at World Bank.
Financial Times. January 23 2006.
Paul Wolfowitz, president of the World Bank, has
triggered a bitter conflict with the bank's senior career staff by
empowering a group of close political advisers to pursue aggressively
what he sees as widespread corruption surrounding bank projects.
Relative Corruption.
Editorial.
The Wall Street
Journal,
09 Dec 2005
Relative Corruption
Don't let the
headline confuse you. We are not referring to the relationship between
U.N. Secretary General Kofi Annan and his enterprising son, Kojo.
Instead, we refer to the latest strategy from that famous economist
and other-people's-money philanthropist, Jeffrey Sachs, to pry more
dollars out of U.S. taxpayers for corrupt African governments....
Recall that the G-7 leaders who gathered in Scotland last July spent
most of their time on African poverty. They decided to forgive $50
billion in bad debts to poor nations and to double global aid to the
poorest states -- mostly African -- by $50 billion a year by 2010 (and
to $150 billion a year by 2015). To allay fears that these billions
would wind up enriching another generation of crooked politicians and
bureaucrats, a string was attached: Governments specializing in graft
would be barred from new disbursements.
The contradiction between a pledge to increase aid to poor countries
and a promise to cut off corrupt governments was immediately obvious,
even to Sachs. Most of Africa would be automatically disqualified
under any system that screens for corruption, as both the
World Bank's governance
indicators and Transparency
International's annual index demonstrate. So Sachs set out to
solve the problem.
And as Carnegie Mellon economist Adam
Lerrick notes in a paper to be released today by Congress's
Joint Economic Committee, the Columbia University economist devised a
new rating system to measure
corruption in which "African nations are effectively compared
mostly to each other." The core of the Sachs argument -- developed in
his 2005 book The End of Poverty -- is that poor countries
suffer corruption because they are poor. Corruption must be measured
not against some absolute standard of honesty but relative to poverty.
If a country is less corrupt than should be expected given its level
of poverty, it deserves a favorable rating in Sachs's view.
Call this the Lake Wobegon effect for development: Most African
countries core impressively under Mr. Sachs's standards. Of the 33
countries surveyed, 26 earn anti-corruption Sachs rankings of "good"
or "average." Mr. Lerrick notes, however, that the equivalent rankings
by the World Bank of the same 33 are "below average" (nine), "poor"
(12) or "very poor" (12). Transparency International, which ranks
most, gives them grades of "poor" or "very poor."
All this matters because Mr.
Sachs is also the director of the UN
Millennium Project, and his favorable ratings for Africa are
the intellectual muscle behind a recent report for the UN secretary
general on why Africa qualifies for new foreign aid. The UN wants rich
countries to spend 0.7% of national income ($250 billion) on aid to
the developing world annually. The report also gives the dangerous
impression that corruption is under control -- as Irish rock star Bono
also did recently on U.S. TV. "The bottom-line argument here in the
U.S. is that people didn't believe [aid] was getting to the people
that it was supposed to, because of corruption and stuff like that,"
he told Conan O'Brien this fall. "They didn't want their tax dollars
redecorating presidential palaces. We've covered that now." Just like
that. Lerrick puts it this way: "How to give wisely, cost-effectively
and directly for the benefit of the poor remains the elusive goal."
The novel but slippery standard of
relative
corruption won't help
end African poverty.
Aid to Africa at Risk: Covering Up
Corruption. Adam Lerrick. Carnegie Mellon Gailliot Center for Public
Policy, International Economics Report, December 2005
Corruption is
not just one of the causes of intractable poverty in Africa. It is the
root cause. The long litany of contributing factors advanced by recent
United Nations and UK government Commission reports to explain or
excuse 40 years of economic failure--- from war to famine; from
rotting infrastructure to epidemic disease---are not causes but
consequences of pervasive pillage by a long line of leaders gone bad.
The most accurate assessment comes from a rational private sector that
is not swayed by promises nor by Ministries of Corruption and a few
token severed heads on the city gates. While donors debate the fine
points of "good governance", which has been loudly proclaimed as the
sine qua non of aid giving, Africa’s own are voting with their
Cedis, Naira, Schillings and Francs and their feet. Forty per cent of
African savings are held outside the continent, some US$ 700-800
billion. (In Asia the rate is 3-6%.) Skilled
and educated workers emigrate at the rate of 70,000 a year. Foreign
direct investment is attracted only by mineral wealth at a time of
world scarcity. At the first sign of genuine reform, the private
sector will be on the plane to Africa before the first UN discussion
committee convenes.
Africa’s leaders have rational expectations. Since 1970, violent
changes in regime have taken place 100 times in 30 countries and are
still making headlines in the current news. What better strategy in a
risky environment than to be short-term greedy, to grab with both
hands at an accelerated rate?
The stolen
dollars stashed away in private accounts in off-shore banks cannot be
accurately tallied: At the low end, Prime Minister Blair’s Commission
for Africa believes the sum to be US$ 95 billion or the equivalent of
more than half of poor Africa’s external debt; others estimate the
level in excess of US$ 500 billion. The taking has been streamlined.
Royalties from oil wells and diamond mines; proceeds from government
monopolies of agricultural exports; and aid monies were all neatly
packaged to go. Records are conspicuous by their absence. Leaders that
may not have a personal future leave nothing behind for national
futures.
.....
Columbia University’s Jeffrey Sachs, the moving force behind the UN
Millennium Project, has found a way to open the door for massive
giving. In the official report to the UN Secretary-General and in his
2005 best-seller The End of Poverty, he insists that corruption
and poverty march in tandem (which leads and which follows is not
clear) and that African regimes are no more venal than comparably poor
nations. To this end, he reworks the judgments of two major indexes
(the 2002 World Bank Governance Indicators and the 2003 Transparency
International Index) and recalibrates African ratings to take account
of relative poverty. In a circular reasoning, a new rating system is
devised where African nations are effectively compared mostly to each
other...
Twenty-six out of Sachs’ thirty-three countries who are at the bottom
in the original reports move up to “good” or “average”. Abracadabra:
Instant qualification for generous unrestricted aid. (See Table I.)
Two more years of independent ratings show no cause for optimism. All
Sub-Saharan nations languish at the bottom of governance and
corruption assessments with no improvement to encourage confidence.
(See Table II.)
Aid without
Risk
Relative corruption is meaningless. Extenuating circumstances are
irrelevant. Absolute corruption is the issue. There are no sterling
success stories of poor but corrupt countries that have blossomed
under aid. As the world contemplates an unprecedented transfer of
taxpayer funds to faraway places, good governance on the receiving end
must be convincingly demonstrated over time. In the interim, rich
nations must underwrite more aid but in a meaningful manner: Grants
that address the most basic needs of the poor, paid out only for
performance; endowments that do not lend or spend but protect
resources and draw upon income to leverage funds in the capital
markets. It is naïve to send aid to Africa without strict supervisory
strings attached.
Wolfowitz suspends $124m in World Bank loans to Chad. Bank Information
Center. January 06, 2006
World Bank issues statement on Chad. Bank Information Center.
Chad Backs Out of Pledge to Use Oil Wealth to Reduce Poverty. December
13, 2005
The World Bank agreed to finance one of the biggest oil projects in
Africa, the pipeline through Cameroon and Chad, under the condition
that governments would use oil profits for poverty reduction. The
Chadian government plans to change the terms of this agreement; as a
result, the Bank is ready to halt lending and investment. According to
an oil expert at Oxfam, if the law is changed, the Chadian people will
not “see any benefit from the billions of dollars Chad's oil fields
are likely to pump into the economy.” (New York Times)
The World Bank : Oiling the wheels of corruption in Chad. Eric
Toussaint and Damien Millet. 5 December 2005.
The World
Bank’s bombast about good governance, corruption and reducing poverty
is a farce. In reality, the World Bank is supporting an oil pipeline
project that allows a notorious dictator to fill his pockets and thumb
his nose at the world. Meanwhile, the people of Chad are bleeding
themselves dry to repay a monumental debt without enjoying the fruits
of a natural resource that is rightly theirs....
When Did the World Bank Become the Home for Wayward
Architects of War? Arianna Huffington. Nov 29 2005
..No tears yet from Wolfie, but he has begun saying
things like "Nothing
is more gratifying than being able to help people in need" and "A
clear message from modern history is that this is a small world... and
that leaving people behind is a formula for failure for us all."
Is this the same neocon zealot who, under the direction of Cheney,
oversaw the drafting of the 1992
"Defense Planning Guidance" -- a bellicose blueprint for
establishing "world order" under American authority that included the
toppling of Saddam Hussein (and which became the intellectual
foundation for the preemptive invasion of Iraq)?...
Paul Wolfowitz: Americans Want Assurance On Corruption – But Support
Investing More. In Global Aids, Malaria, Health. Corruption Is A
"Global Disease" Rich Countries Must Also Tackle, He Says At Time
Global Health Summit. Nov 3 2005.
…The
biggest challenge in getting Americans to support the funding of
health initiatives in underdeveloped countries is to persuade them
that money makes a difference, Paul D. Wolfowitz, President of the
World Bank, said today at the TIME Global Health Summit. Americans
want to do more to save lives in poor countries. But the belief that
widespread corruption exists "is holding donors back" Mr. Wolfowitz
said on the final day of a three-day summit sponsored by TIME magazine
and the Bill & Melinda Gates Foundation, which has gathered together
national and international leaders in medicine, government, business,
religion and the arts to develop actions and solutions to world health
crises.Mr. Wolfowitz said that he was encouraged by new leadership in
many of the countries of sub-Sahara Africa who are "making a
difference." He also pointed out that corruption is a "global disease"
not unique to underdeveloped countries, saying that it takes "two
partners," including individuals from developed countries offering
bribes, and that in a recently discovered corrupt transaction between
an aide to a senior South African official and a corporation from a
wealthy country, South Africa has already taken action against the
aide, but the corporation’s home country has not.
World Bank: Foreign Firms Aid
Corruption. Says 2006
‘ll mark watershed for Nigerian anti-graft war.
Kunle Aderinokun. 14 October 2005
The
World
Bank
yesterday said multinational companies from the European and latin
American countries were still giving bribes to officials in Nigeria
and several other African countries where they operate... Also, the
bank said the war against
corruption
by President Olusegun Obasanjo's administration was paying off and
predicted that 2006 could be a historical year... Kaufmann said it was
evident that the "resolute reforms" embarked upon by the
administration in the past one year and a half was beginning to pay
off... According to him, "it is becoming evident that the resolute
reforms undertaken by the Nigerian leadership and government over the
past a year and a half are beginning to pay off already, even though
we know that there is always some delays in any measure."
Nigeria
winning
corruption
war.
News24, South Africa, 14 October 2005
Nigeria's government under President Olusegun Obasanjo is making
progress in fighting
corruption,
a senior
World
Bank
official said on Thursday... Daniel Kaufmann, head of global
programmes at the
World
Bank
Institute (WBI), made his remarks after a meeting with members of
Obasanjo's economic team..."Nigeria is changing for the better. In
fact, if the current momentum is maintained and deepened, the progress
made in the fight against
corruption
could become irreversible," Kaufmann said.
Dr. Wolfowitz, I Presume. A conversation with the World Bank's new
president. Paul Gigot. The Wall Street Journal. September 24,
2005.
When Paul
Wolfowitz returned to the World Bank from a trip to Africa in June, he
made a presentation to his staff. "I made the mistake of calling on
the first questioner, somebody who was obviously even older than I
am," recalls the 61-year-old but freshly minted World Bank president
in an interview. "And he said, 'I've been around since 1972 and we've
heard all this stuff before.'" Welcome to the soaring idealism of the
world's greatest "development" body. ... He's the idealist. The World
Bank is the land of lifers and experts who've seen and heard it all
before. His mission--since he's been crazy enough to accept it--is to
make the world's largest development bank believe once again that it
really can help the poor. It certainly would be one of history's
larger ironies if the man so reviled by the political left ended up
helping more people than all of those who spend their lives attending
U.N. conferences......Regarding
his staff skeptic, Mr.
Wolfowitz
says he replied, "I don't think so. I don't think you ever really
heard African leaders talking about the essential need to combat
corruption.
I don't think you've seen African leaders, the way the president of
Nigeria recently did, jailing the inspector general of police on
corruption.
I don't think you've seen things like the president of South
Africa
dismissing the deputy president because his financial adviser took a
bribe, by the way, from a company from a developed
country."...At the Bank, "they are, I think, overwhelmingly people who
really want to see that their work makes a difference, and if we can
set--if there is a culture of getting money out the door, I think we
can change that culture and get people looking more at the results."
As I say, Paul
Wolfowitz is
nothing if not an idealist.
CNN LIVE EVENT/SPECIAL: "CNN Connects". Aired
September 17, 2005. During UN World Summit 2005, featuring
President
Bill Clinton, Paul Wolfowitz, Bono, Jeffrey Sachs, Wangari Maathai,
and others.
Excerpt from "Rush" Transcript
WOLFOWITZ:
You know, I think it is very important to keep in mind, as we talk
about particularly the situation of Africa, which is desperate that in
the last 20 years have probably seen the greatest progress in a couple
of centuries in reducing poverty. Hundreds of millions of people have
been lifted out of poverty, particularly in China, increasingly in
India and Latin America, by successful policies by the countries
themselves that have produced spectacular economic growth, especially
in East Asia.
And the danger, or the tragedy today is the 600 million people in
sub-Saharan Africa have been left behind by that progress, and
poverty's actually increased in the last ten years.
But I don't think you can cut the tie between development and
governance. Absolutely, if you can deliver relief to people who need
it, and President Clinton's absolutely right, you meet poor people,
they are desperate not primarily for themselves, but to give a better
life for their children but if they're trapped in a system where
assistance is stolen by officials, it's not going to work.
......
WOLFOWITZ:
Christiane, just if I could say one thing, too, on what Queen
Rania said, I don't think it's a choice between improving governance
and increasing assistance. I think you have to have both. But when you
talk about improving governance, it's not just governments. It's civil
society. It's the things that Gramin Bank has done on their own in
Bangladesh or the things that Wangari Maathai -- governance comes at
all levels of society. ....
AMANPOUR:
We've been talking about how to eradicate extreme poverty and how to
hold governments responsible and accountable to their people. We
talked a little bit about corruption, not just the corruption that
exists in some governments around the world, but Western corruption,
those who actually pay bribes and do similar things in order to get
contracts.....
...WOLFOWITZ:
Well, I think that's their responsibility. But I would say one
other thing, punishing corrupters is important but I think what we've
found even more important is telling people where their money is
going.
In Uganda there was an experiment -- not an experiment, a project that
showed local school districts how much money they were supposed to be
getting. It turned out they were getting 10 percent of what they were
supposed to get and as soon they began to publish those numbers the
numbers turned around.
BONO: It's called the Poverty Action Fund and it was where they
ring-fenced monies, particularly in debt cancellation that we did with
President Clinton's administration and you can see where the money is
going. And as a result of that improvement there are nearly three
times as many children going to school in Uganda now than were five or
six years ago.
This just is very real. It's just an important thing because you think
all this stuff goes on and on. There's a real, concrete example of
what smart strategy and money provide.
CLINTON: But at first, we didn't know what to do, because that
was part of the debt relief. They had to do it to get the debt relief.
And they overnight doubled enrollment, and now it's tripled, because
they could follow the money. And that's what we've tried to do with
all this tsunami money. But Wangari's right but I sort of side with
Mr. Wolfowitz on this. I think for us to be pointing our fingers at
people that have been used to getting this kind of money we look
hypocritical unless we have really tough laws. America's got better
laws than most rich countries, and ours could be tougher.
World Bank's Wolfowitz Outlines Africa Action Plan
Initiative. 09 Sept 2005
Addressing an issue that is of major concern for the development of
democratic governments and the rule of law on the continent -- that of
corruption, Wolfowitz said, "At the World Bank, we are working with
[African] countries that request our help to strengthen legislation
and institutions, so they can take charge of combating corruption.&nb