Does He Hear the World’s Poor? Don’t Bank on It.

The Washington Post Sunday - - Outlook - By William East­erly

Pity Paul Wol­fowitz: Ev­ery time he tries regime change, he trig­gers an in­sur­rec­tion.

The latest re­volt was launched by World Bank staffers and West­ern aid lead­ers in re­sponse to the reve­la­tion that Wol­fowitz — who had made a cru­sade against cor­rup­tion the hall­mark of his bumpy ten­ure as pres­i­dent of the World Bank — may have awarded his com­pan­ion a $60,000 pay in­crease. A staff that had al­ways hated work­ing for the in­tel­lec­tual ar­chi­tect of the Iraq war was now quite lit­er­ally shout­ing for his res­ig­na­tion, and Wol­fowitz was left wan­der­ing the cor­ri­dors of the bank look­ing for a Green Zone in which to hide.

The root cause of his de­ba­cle at the bank was pretty much the same as the rea­son for the fi­asco in Iraq: in­tel­lec­tual hubris at the top that dis­dained the messy re­al­i­ties at the bot­tom. He imag­ined it would be as easy to clean up the patholo­gies of for­eign aid as he had thought it would be to cre­ate democ­racy in the Mid­dle East.

Wol­fowitz came to the bank de­ter­mined to fight cor­rup­tion and per­haps re­deem him­self af­ter Iraq by of­fer­ing a com­pas­sion­ate, con­ser­va­tive brand of help for the world’s poor. But Wol­fowitz’s pro­gram never re­ally took wing. Try­ing to fight the cor­rup­tion that all too of­ten saps for­eign aid was noble, of course. But bank staffers bris­tled be­cause some cor­rupt regimes seemed to bother Wol­fowitz more than oth­ers. Worse, his main ob­jec­tive — trans­form­ing bad gov­ern­ments into good gov­ern­ments — was sim­ply un­work­able.

Wol­fowitz’s ar­ro­gant be­lief that the bank could over­haul the of­ten nasty pol­i­tics of the world’s poor coun­tries sounded familiar to many bank staffers; his pre­de­ces­sor, James D. Wolfen­sohn, also had a fond­ness for utopian schemes. All of this over­reach­ing bogged the bank down, mak­ing it less ca­pa­ble than ever of de­liv­er­ing even the sim­plest things that al­le­vi­ate the suf­fer­ings of the world’s poor — medicine, wa­ter, food. Frus­trated, sus­pi­cious and re­sent­ful, the staff was ripe for re­volt.

Let’s start with cor­rup­tion. To be fair to Wol­fowitz, his ini­tia­tive to cut off graft-rid­den gov­ern­ments from bank loans (seem­ingly a no-brainer) met re­sis­tance for some very bad rea­sons. The First Com­mand­ment of aid agen­cies like the bank is, “Thou shalt spend all your aid bud­get.” So the nat­u­ral im­pulse of the bank’s bu­reau­crats was to shovel dol­lars out the door to lousy regimes eons af­ter it had be­come ob­vi­ous to ev­ery­one else that the funds would never reach the poor.

Wol­fowitz drew a line in the sand in Uzbek­istan, cut­ting off loans to its tyrant, Is­lam Ka­ri­mov. Wol­fowitz ar­gued that Ka­ri­mov had stolen from his al­ready im­pov­er­ished pub­lic and mas­sa­cred civil­ian demon­stra­tors. Wol­fowitz’s de­trac­tors grum­bled that the real rea­son for the cut-off was Ka­ri­mov’s July 2005 de­ci­sion to deny the Bush ad­mi­nis- tra­tion the right to use a mil­i­tary base there. But so what? Per­haps the right thing was done for the wrong rea­sons. It’s still hard to feel any sym­pa­thy for Ka­ri­mov, who is as far from democ­racy as Bo­rat is from jour­nal­ism.

But be­yond Uzbek­istan and a few other laud­able aid cut­offs, the Wol­fowitz pro­gram was com­pro­mised by se­lec­tive pros­e­cu­tion. By the bank’s own mea­sures, 54 other coun­tries are about as cor­rupt as Uzbek­istan, or worse. Should the bank cut off all 54? (I say, why not?) Wol­fowitz was not will­ing to go that far, alas, which left ev­ery­one con­fused about what his cri­te­ria re­ally were. Pak­istan — a linch­pin of the U.S. cam­paign against al-Qaeda but not much more of a paragon of clean hands and democ­racy than Uzbek­istan — con­tin­ued to re­ceive oo­dles of World Bank money. The ar­bi­trari­ness of the cor­rup­tion cam­paign also al­lowed Wol­fowitz’s no­to­ri­ous side­kicks — two widely loathed for­mer Bush ad­min­is­tra­tion aides, Robin Cleve­land and Kevin Kellems— to threaten to brand staff dis­senters as “soft on cor­rup­tion.” (Sound familiar?)

But the prob­lems with Wol­fowitz’s man­age­ment of the bank ran even deeper than his botched anti- cor­rup­tion cam­paign. He also em­braced and ex­panded the utopian goals of his pre­de­ces­sor, Wolfen­sohn.

For ex­am­ple, while Wol­fowitz was al­legedly get­ting tougher on “bad gov­ern­ment” in places such as Uzbek­istan, the bank was si­mul­ta­ne­ously in­sist­ing that de­vel­op­ment pro­grams show “coun­try own­er­ship” — bu­reau­crat-speak for hav­ing the re­cip­i­ent gov­ern­ment take charge of its own pro­grams. But how do you get tough with mis­be­hav­ing gov­ern­ments while in­sist­ing that they run your pro­grams?

Such fol­lies are only one symp­tom of a deeper in­tel­lec­tual cri­sis over whether the bank has the slight­est clue of how to achieve its grandiose goals. Just as Wol­fowitz ar­rived at the bank in 2005, it pro­duced a re­port on “Lessons of the 1990s.” The lessons were that the bank did not know which lessons to teach; the re­port showed that coun­tries that had ig­nored bank dogma (China, Viet­nam, In­dia) were thriv­ing, while those un­der bank tute­lage (Rus­sia, Ar­gentina, Zam­bia) did poorly.

Wol­fowitz also con­tin­ued a dis­as­trous trend be­gun by 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 but PR-friendly slo­gans like “em­pow­er­ing the poor” and “at­tain­ing the Mil­len­nium De­vel­op­ment Goals” (which cover ev­ery last ounce of hu­man suf­fer­ing).

All of which leaves the bank in rocky shape. The best and the bright­est of its staff have been leav­ing in a steady, de­mor­al­ized ex­o­dus, and poor na­tions are now de­sert­ing the bank to seek loans from private cap­i­tal mar­kets or grants from aid donors like China, who are in it for No. 1. Mean­while, new private foun­da­tions (the Bill and Melinda Gates Foun­da­tion, and so on) are tak­ing over tra­di­tional bank ar­eas such as health and agri­cul­ture. Add to that the de­ba­cle over Wol­fowitz’s sweet­heart deal, and you have a bank fac­ing the gravest cri­sis in its six-decades-old his­tory.

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.

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 poor 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. The bank has al­ready made real progress in all th­ese ar­eas, and it could make even more if its many tal­ented staffers were freed from their cur­rent bu­reau­cratic hell and al­lowed to do what they do best.

How sad that such ob­vi­ous prin­ci­ples still aren’t em­braced. One can only hope that the re­form­ers, whose only po­lit­i­cal as­set is their com­pas­sion for the poor, will prove strong enough in this hour of cri­sis to save the bank — not for its own sake but for the sake of the world’s most vul­ner­a­ble peo­ple. That would be a regime change we could all live with.



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