Global Development: Views from the Center

It seems the problem with Mr Wolfowitz's involvement with Ms. Shaha Ali Riza is more serious than you ididcate. The terms of the employement agreement between Ms. Riza and the World Bank were dictated by Mr. Wolfowitz and not the World Bank Ethics Committee as Mr. Wolfowitz told even Ms. Riza. Basically Ms Riza was given a no show employment Agreement that payed her not to show up to work at the World Bank. This is the kind of employment arrangemnt familiar with mobbed up labor unions or the Chicago Water Board for girlfriends of the well connected. In this case Ms. Riza was assured of annual World Bank promotions and pay increases up to #$244,000 by 2010 for staying away from the World Bank so long as Wolfowitz was President. She is now the sole consultant to The Foundation For the Future. A Foundation with $56 million of public money but no employees or programs. It is difficult to consult to an organization with no employees and there is no evidence that Ms. Riza shows up for work everyday. She has no one to report to and is not accountable to the World Bank for her work. So why do they pay her and promote her? She is the girlfriend of the President. Don't you think this is a problem affecting the ability of Mr. Wolfowitz to lead either inside or outside the World Bank?

Heck of a job, Wolfie.

Looks like the Wall Street Journal Editorial today exposed the World Bank and Nancy Birdsall for what they really are.

Mr Wolfowitz has created a problem he will not be able to manage. I have personnaly held World Bank employees with high esteem and will continue to do so. What Mr. Wolfowitz has done has created a perception problem, where WB as an institution will be seen as not being transparent in its activities. Ofcourse this might not impair disjudge of duties by strong willed employees who insists on doing things straight but it will give a leeway for those who have been looking for such opportunities, and they are there in every society or grouping. During the height of misrule and mismanagement of the Kenyan economy the WB witheld loan disbursement to Kenya. That action and many similar ones eventually forced the then regime to accept democratic changes albeit slowly. How will world bank be able to continue influencing positive change in the management of Kenyan affairs or even in other countries which might be in a worst off situation?

Unfortunately even if Wolfowitz leaves problems related to the functioning and the purposes of the WB will remain unchanged. It really seems easy to personify a solution/treatment for an incurable persistant incapacity to bring about change in the status quo. The real question should be-"And even if he leaves what will really change?" The amount paid to a mistress or the ODA for developing countries? ...

Et puis quoi encore? The World Bank definitely has a full agenda. Of utmost interest in certain quarters, is the tone that will be (re?)set by the anti-corruption campaign and its champions. What with the need for smart, skilful leadership and management systems for the urgent implementation of education development, infrastructure, disease control, and agricultural advancement programs, to name but a few, in those regions that will benefit most from the anti-corruption campaign. Corruption, nepotism and clientelism are after all, close siblings.

That the World Bank may do a lot of good is undeniable.
It is equally undeniable that its conception of what is good and how it may be achieved is so far from what needs to be done, and so consistently so ,that the gloss over, cannot be placed squarely on oversight of few let alone just one.
How ever darts from those sitting on fences far away don’t achieve anything.
It is people like you who have to see the challenges .
And what are these? You have set a five point agenda for the President of the World Bank.I am suggesting a basic reality check
To take poverty for instance .A lot of contribution to poverty alleviation from World Bank comes thru very precise ,complicated ,technical research which in turn establishes truths like growth is good for the poor?
I suppose all of us know, that at least in the medium term one can divide only what one has—one has to have a cake to divide. It is the how of redistribution and widening access that needs to be worked in.
The basic how ever is that a person with a belief and determination and a real concern rather a feel , a real sensitivity to how and why so many need live in deprivations too terrible to recount. Will achieve more than many others, with mere opinions and daily agendas ,no matter how sophisticated or statistically sound their opinions maybe..
It would take more than transparency in appointment process to do that.
It needs more people in the right places to ask what institutions with huge resources and influence, need to do
Will the interests of the rich and the mighty no matter how trivial ,always precede even the lives of the rest of the humanity .

It is hard not to feel sympathetic the Wolfowitz’s desperate struggle to keep his position as the World Bank’s president. In the end, what he did was an error of judgment that reflects primarily his lack of experience in the Bank’s intricacies, which he admitted and expressed his regrets, rather than an act of corruption. His companion, Ms. Shaha Ali Riza, indeed suffered damage when she was forced to leave the Bank when Wolfowitz was nominated, and there is no doubt that she deserved some compensation. The World Bank’s Ethics Committee recognized that damage and the need for compensation, and the dispute was therefore on the amount of compensation and not on the decision itself. In an organization where some 1000 employees earn an annual salary of more than $175,000 net of tax, the error of judgment that Wolfowitz made about the amount of compensation is not a primal sin. One wanders whether the Ethics Committee would have expressed any protest or whether any special Panel would have been nominated to investigate Wolfowitz’s contractual obligations had this affair not attracted such immense attention and an onslaught of the media that was mostly related to Wolfowitz’s previous post.

No doubt, it would have been more dignified if Wolfowitz had admitted his error and resigned, but the main damage to the World Bank is not so much the affair itself, but the huge attention it drew to the organization, the light it shed on its work practices and its ethics and the questions it inevitably raised about its role and activities. What, in other words, is this organization actually doing?

We knew what this organization was designed to do when it was established in the aftermath of WWII when Europe was in ruin, and we knew how important it was at the end of the past century in motivating and leading the collaborative efforts of the rich developed countries to help the chronically poor and hungry people in the least developed countries. But it is more than three decades now that the World Bank is working in these countries and giving them huge amounts of aid, over half a trillion dollars according to some estimates, and we see no results. During these years, the East Asian countries took their fate and their economic policies into their own hands, and contrary to all the World Bank recommendations, transferred large amounts of resources and made huge investments in their industries that led to the “East Asian miracle” and made China and later India leading global economic powers.

On top of all this, many African and Central American countries now have enormous profits on their sales of oil and minerals and while only pittance of these profits reach their poor people, the donor countries and the World Bank are still expected to give them aid. No wander that the donor countries fail so miserably to meet the commitments they solemnly made in September 2000 at a special meeting of the UN general assembly when they declared the Millennium Development Goals to halve world poverty and hunger by 2015. With the failure to carry out an effective program to meet the Millennium Development Goals, the failure of the trade negotiations at ‘Doha Round’ that was designed as a Development Round and aimed to reach an agricultural trade agreement to help the least developed countries, and the increasing number of poor and malnourished people amidst the richess of the global economy, what the World Bank is now doing?

In fact China and the large oil corporations are now giving to and investing in the Sub-Saharan African countries much more money than the World Bank and the IMF combined. Ethical considerations have not been decisive criteria in these investments and China gave lots of money to Zimbabwe, for example. So how can the World Bank change all that? And why on earth is it still a ‘Washington Institution’ when Washington has, in fact, a small and diminishing role and say in the Bank’s activities, it is perhaps the smallest donor, on a per capita basis, among the developed countries to the Bank’s operations, and these days the mere association of the Bank to Washington makes its activities in many of the least developed countries more complicated.

These questions are not going to disappear no matter what the final decision in the Wolfowitz affair will be. The World Bank and its professional staff still owe us answers to all these questions. Perhaps more importantly, they ought to make a thorough internal examination and see what reforms should be made in order to make the Bank effective also in the 21-st century.

It should only be about what is right or wrong.

Although I was an Executive Director at the World Bank, 2002-2004, I arrived there directly from the private sector and so I might not know much about the nuances of diplomatic affairs but, the way I see it, perhaps I am better off so.

The Ethics Committee proposed a solution to Mr Wolfowitz’ conflict of interest that could have entailed having the poverty fighting World Bank to pay out US$1.950.000 over ten years (US$ 130.000 plus 50% benefits per year) and that, no matter how we read it, is just plain crazy. Then Mr Wolfowitz, who as President should know that something does not have to be right just because an Ethics Committee says so, raised the potential cost for the bank of what is delicately phrased as a secondment to US$2.700.000, or more.

Wolfowitz needs now to resign but the overwhelmingly good staff, management, board members and presidents, present or past of the World Bank, as well as a world that needs a respected multilateral institution where global challenges can be discussed, they all deserve that this issue should exclusively be about right or wrong and not just a banal pro or against Wolfowitz political row.