Putting Assistant Secretary of Defense Paul Wolfowitz in charge of the World Bank lends credence to the charge by officials in developing countries that the World Bank is nothing more than an instrument of U.S. foreign policy.
Luisa Morgantini, chair of the Development Committee of the European Parliament that reports to the European Directors on the World Bank board, has requested that government officials "ask the U.S. to open up the process to accept other candidates." A network of 48 European nongovernmental organizations (NGOs) is distributing a sign-on statement to their members of parliament asking them to block the nomination. It's getting 50 signatures an hour, according to Alex Wilks of the European Network on Debt and Development in Brussels.
"World Bank insiders are so depressed," says Mark Weisbrot, co-director of the Center for Economic Policy Research in Washington, D.C.
If history is to serve as an example, the European decision-makers on the bank's executive board will accept Wolfowitz within the next two weeks. They haven't rejected a U.S. candidate in 60 years, despite the United States' rejection of Europe's candidate (Caio Koch-Weser) for managing director of the International Monetary Fund (IMF), the bank's big brother, under the Clinton administration.
Wolfowitz would replace 10-year veteran James Wolfensohn. The 1990s saw a lot of countries and activists asking for World Bank leaders to explain how it could be that wherever they were eradicating poverty, poverty was increasing. Joseph Stiglitz, famed Nobel Prize-winning economist, was pushed out of the bank for criticizing that same issue. Wolfensohn has since managed a 180-degree change. In Brazil, for example, a country whose officials have agitated against both the World Bank and the IMF (Brazil's President Luiz Inacio Lula da Silva was elected in October 2002 in a landslide because the public linked his challenger to the neoliberal policies espoused by both institutions), Wolfensohn had a positive makeover and was photographed dancing with children in the streets. People felt he was sincere about reducing poverty. Who will feel that way about Wolfowitz, one of the chief Iraq War architects and a man who, in December 2003, said that countries not taking part in the war effort should not get reconstruction contracts?
Clinton nominee Wolfensohn has been a Bush administration target for years. The primary objective of Washington's right-wing policy at the World Bank has been threatened in recent years, with steps being made to honor the demands of poor nations. It has moved a little further away from a command-and-control strategy dictated by Washington. Wolfensohn did not back Wolfowitz's call for total Iraqi debt cancellation and was not quick to help Baghdad with development loans, either. Wolfowitz signals a return to the command-and-control strategy, and a push to get massive development contracts in the hands of U.S. (and European) corporations.
Some NGOs in the developing world say Wolfowitz's nomination should be accepted, if not praised, according to Mike Casaus at the Center for Economic Justice in New Mexico. "To them, it doesn't matter who is running it,” he says. “The worse the person, the better, because it makes it easier to gain support to eventually shut the bank down."
Kenneth Rapoza is a former staff correspondent for World Press Review magazine. He covers international finance and development policy from Brazil as a freelancer. He divides his time between Massachusetts and Brazil.
