Wolfowitz, Head of World Bank?

meditraitor

As one of the main protagonists of the Iraq war, and a paid up neo con, this is a very strange choice for head of the World Bank.Mr Wolfowitz is more widely associated with the unilateral use of US military power than with development policy.

"The World Bank Group’s mission is to fight poverty and improve the living standards of people in the developing world. It is a development Bank which provides loans, policy advice, technical assistance and knowledge sharing services to low and middle income countries to reduce poverty." World bank

He assisted Defense Secretary Cheney in developing plans for prosecuting the Gulf War and in raising more than $50 billion in allied financial support.
This is quite a sum to raise for a war, can he or will he be let shift some of this obvious talent for raising vast sums for a cause which is widely recognised as the primary world issue of today. Personally I dont think so, and would love to be wrong.
Is Wolfowitz going to bow to the pressure from european nations for debt reduction or is he going to insist on privatisation and derugaltion of industries within third world countries?
IMO This appointment is a slap in the face to any immediate and near future plans for debt relief to the poorest countries in the world, it will pave the way for americanised capitalistic processes to enter these countries and plunder the any valuble resources available with the world bank using its power and money as a thumb screw for this rape if any of these countries feel that they are being hard done by, which will be an understatement.
Am I been over dramatic here? Has this guy got something to offer with regard to world poverty?

uberwolf

by all accounts the EU have accepted his canditure based on assurances re: fighting poverty.

in I.T business section today.

strange choice, but obviously(I'd a thought) a politically motivated acceptance.

toiletduck

i think he'll be better than Bono anyways....

Blub2k4

meditraitor wrote:

, it will pave the way for americanised capitalistic processes to enter these countries and plunder the any valuble resources available with the world bank using its power and money as a thumb screw for this rape if any of these countries feel that they are being hard done by, which will be an understatement.
Am I been over dramatic here? Has this guy got something to offer with regard to world poverty?

I think you have hit the nail on the head, he is there to back up the PNAC with bribery.

DadaKopf

Dracula's been a shoo in since he was nominated and since the British government endorsed him the day after.

meditraitor wrote:

Am I been over dramatic here? Has this guy got something to offer with regard to world poverty?

I don't think so. And, given the World Bank's history, I'm not convinced that Wolfowitz is taking the job because he cares passionately about reducing poverty.

meditraitor wrote:

Is Wolfowitz going to bow to the pressure from european nations for debt reduction or is he going to insist on privatisation and derugaltion of industries within third world countries?

One thing Wolfowitz seems keen to do is to try to get the World Bank to replace loans with grants. On the face of it, it seems like a good idea - grants don't cause debt whereas loans do, even at concessional rates. But many argue grants are more easily politicised, compared with loans which have to be justified by economic criteria. Wolfowitz is widely known to dislike any multilateral limits on American power. Converting loans to grants would undermine the Bank's solvency. Increasingly, the Bank would find it more difficult to fund its anti-poverty programmes. It'd then be very easy for the US, as the biggest investor and country with the greatest voting power, to further extend the Bank as an instrument of American foreign policy.

I think this is a likely effect of his presidency - it's the sort of thing that's easy to sell because strengthening America's hand over the Bank could easily be justified on the basis of debt relief. Some more debt relief may come in the short-term, but then the things to watch out for are conditions attached to Bank loans and debt relief that affect developing countries in the long-term.

Some of these conditions will involve 'good governance' reforms and, as a defence expert Wolfowitz will probably try to meld the development agenda with the security agenda. This is something that has been mooted by the aid donor countries for now because for obvious reasons militarising aid is not a good idea, but with him at the helm, who knows?

Anyway, the Bank remains in the business of rapidly liberalising developing economies, so maybe things won't change too much unless the world economic climate changes, or a different economic paradigm takes over. Under James Wolfensohn, various improvements in how the Bank do things have been made (but still Africa gets poorer) and the Bank has learned from past mistakes - the most recent admission being that encouraging monocrop economies was bad for poverty reduction. It'll be interesting to see how much resistance there is to Wolfowitz within the Bank over the next few years (if he turns out to be a radical crazy at the Bank). But the Bank's a mysterious organisation and no one's quite sure how much influence the president actually has over policy. Or maybe he only chose the job because he doesn't have to commute any farther to get to work!

Bri

Out of interest, given the fact that the US and Europe nominate for the WB and IMF respectively (and unofficially?), is this genuinely much different than past appointments? I don't know I'm simply wondering...

I gather the last WB president wasn't looked on too badly, but is this just a case of news-grapping headlines because of Mr. Wolfowitz's recent publicity with Iraq? i.e. If the 2 Western powers dominate 'world institutions' so much, does this kind of dominance not always get reflected (although perhaps less explicitly?)

By the by I'm hardly supportive of his nomination, I'm just playing Devil's advocate to hear your views.

DadaKopf

Out of interest, given the fact that the US and Europe nominate for the WB and IMF respectively (and unofficially?), is this genuinely much different than past appointments?

Most WB/IMF heads have been nobodies. On occasion firebrands are nominated. The most obvious parallel is the nomination of Robert McNamara. Wolfowitz is a mathemetician by training, McNamara a statistician. Callous thinkers? Both worked in defence. McNamara was an architect of the Vietnam war (not to mention the firebombing of Japan in WWII) and is responsible for thousands of deaths; Wolfowitz designed the Iraq invasion and is also responsible for thousands of deaths.

Wolfowitz has mentioned McNamara in his comments recently, as if he was a development Messiah. Sure he made the bank focus on poverty reduction instead of solely on economic growth, but he also served the interests of the United States - as an impartial bureaurat, you understand. He is responsible for propping up dangerous African dictators, feeding African corruption and fuelling conflict.

Bri wrote:

I gather the last WB president wasn't looked on too badly, but is this just a case of news-grapping headlines because of Mr. Wolfowitz's recent publicity with Iraq? i.e. If the 2 Western powers dominate 'world institutions' so much, does this kind of dominance not always get reflected (although perhaps less explicitly?)

James Wolfensohn's record at the Bank shows up how nobodies (at the Bank, rather than the IMF) can drum up the right policy rhetoric (in his case, corruption and good governance) but have little real influence on actual policies and funding allocations, which is decided by its board of executive directors, on which America has the biggest vote. He also failed to properly create space for more critical economists at the Bank to influence its thinking thinking that could lead to better analysis, and efforts to make international development more democratic by improving 'stakeholder participation' was a facade concealing traditional North-South power politics. But he did often go mental about the rich countries refusing to offer debt relief on many occasions and now America and Britain are getting serious about it.

In the end he had little real influence over Western dominance of the institution which permeates nearly every aspect of it. A really great Washington gadfly, Mark Wiesbrot, summarised the situation brilliantly:

[A]lmost all of the World Bank's policy-based lending is subordinated to the International Monetary Fund (IMF). In other words, the Bank throws its (larger) lending weight behind the IMF's macroeconomic policies, by refusing to lend in most cases unless the borrowing country meets IMF approval. The IMF, in turn, is dominated almost completely by the U.S. Treasury department. While the Europeans and Japanese could theoretically outvote the United States, they haven't yet done so in the last 60 years.

This gives the U.S. Treasury control over a powerful creditors' cartel, since the Fund and the Bank together are often able to persuade other multi-lateral lenders, rich country governments, and even the private sector not to lend if a country doesn't meet with IMF/Treasury approval. In the last few years this power has eroded somewhat, as Argentina - one of these institutions' largest borrowers - called the cartel's bluff and won big. After defaulting on $100 billion of private debt, Argentina twice threatened default to the IMF itself - an almost unprecedented act of defiance - and surprised the experts by jump-starting their recovery with rapid growth and a lower debt burden.

But the IMF/ World Bank cartel still has enormous influence over policy in most developing countries. The record of the last 25 years indicates that this influence has been overwhelmingly negative: outside of Asia, the vast majority low and middle-income countries have suffered a sharp slowdown in economic growth. There are almost no success stories to point to -- the World Bank and IMF can hardly take credit for the Chinese growth spurt since 1980. But where these institutions have been heavily involved, the economic failure is striking: In Latin America, income per person has grown about 12 percent in the last 25 years, as compared with 80 percent in just the previous two decades (1960-1979). Africa has fared much worse, and the World Bank and IMF have been slow and stingy in providing even debt cancellation for the poorest countries -- something that can be done with the stroke of a pen. url=http://www.cepr.net/columns/weisbrot/mark_weisbrot_3_17_05_.htm]Source[/url

So there ya go.

Seems likely, then, with Wolfowitz in charge, that the treasury will have even more influence, at least for the next three-and-a-bit years.

meditraitor

Bri wrote:

Out of interest, given the fact that the US and Europe nominate for the WB and IMF respectively (and unofficially?), is this genuinely much different than past appointments? I don't know I'm simply wondering...

I gather the last WB president wasn't looked on too badly, but is this just a case of news-grapping headlines because of Mr. Wolfowitz's recent publicity with Iraq? i.e. If the 2 Western powers dominate 'world institutions' so much, does this kind of dominance not always get reflected (although perhaps less explicitly?)

By the by I'm hardly supportive of his nomination, I'm just playing Devil's advocate to hear your views.

-Close enough to the politik behind Europes official "endorsment".
It looks like Pascal Lamy is up for the WTO and America need to ratify this for it to go through. But Lamy could have been cloned for that job in the WTO, his backround in economics and finance make him ideal, he will hit the ground running.
Wolfowitz is a hawk, there is need for some compasion (there I said it, BleedinHeartLib) to be a competent negotiator in the WB,
I just feel it is a farmer using a wolf to pull his plow instead of a horse, he will get fed up and start biting people.

egan007

Now he can use Aid as a bargaining chip for poor countries natural resources....genius
How ever the hell people keep putting moronic, power hungry, plundering, evil bast0rds like this into power is beyond me.

meditraitor

egan007 wrote:

Now he can use Aid as a bargaining chip for poor countries natural resources....genius
How ever the hell people keep putting moronic, power hungry, plundering, evil bast0rds like this into power is beyond me.

Iraq Oil for Aid may just have been a practice run for this.

DadaKopf

meditraitor wrote:

It looks like Pascal Lamy is up for the WTO and America need to ratify this for it to go through. But Lamy could have been cloned for that job in the WTO, his backround in economics and finance make him ideal, he will hit the ground running.

Now that makes sense. The EU Commission is attempting to press through the WTO reforms already rejected by the developing countries at the last round via the EU-ACP Economic Partnership Agreements. If successful, these free trade agreements would reverse much of the progress already made. The Commission seems to be doing this of its own accord - the national governments and the EU parliament aren't interested in pushing the 'Singapore Issues'. Even even industrial lobby organisations like the European Roundtable of Industrialists aren't that interested.

Weird.

DadaKopf

Just in case anyone missed it:

Wolfowitz era begins: Realpolitik 1, Democracy 0

Paul Wolfowitz' nomination as World Bank president was approved by the board 31 March. The approval was a formality after the controversial architect of the war in Iraq received the support of EU countries at a meeting of ministers in Brussels the previous day. Mr Wolfowitz will take over from departing president James Wolfensohn on 1 June.

Observers from across the political spectrum have denounced the selection process. According to a longstanding 'gentleman's agreement', the US is entitled to nominate the president of the World Bank while the Europeans get to choose the head of the IMF. In the week after the Wolfowitz nomination there had been conjecture that European leaders might veto the choice, following the precedent set by the US in vetoing the European choice for head of the Fund in 2000.

What followed however was an unprecedented display of realpolitik. In the UK, Treasury and development officials were reported to be "incandescent" that Prime Minister Blair had given the go-ahead to the Wolfowitz nomination a month before it was made public. The UK is hoping to have its former development minister Baroness Amos take over the UNDP in the coming months. The French are rumoured to have their eye on the leadership posts at the WTO and UNHCR with Pascal Lamy and Bernard Kouchner the respective candidates. The French along with the Germans will hope to install a national as the next head of the World Bank's private-sector arm, the IFC. The Germans, along with the Brazilians and the Indians, will hope to gain a security council seat in upcoming negotiations on reform of the UN security council. This calculation, along with fears of US foreign policy reprisals, is what most observers blame for developing country silence on the Wolfowitz nomination.

Executive Directors from the G-11 group of developing countries on the World Bank board met with Wolfowitz 23 March. They raised concerns about "the pursuit of bilateral strategic issues through multilateral fora by some major shareholders." Mr Wolfowitz responded that he "would not attempt to pursue any political agenda".

http://brettonwoodsproject.org/article.shtml?cmd[126]=x-126-174508

solo1

Mr Wolfowitz responded that he "would not attempt to pursue any political agenda".

I don't know about you, but that's certainly set my mind to rest.

DadaKopf