Odious Debts

The World Bank gives graft another go in 2008

Odious Debts Online
August 7, 2004

Evidence of corruption in Bank-funded projects should raise red flags instead of more greenbacks but a year in to his tenure as World Bank president, Robert Zoellick has yet to put the brakes on a single loan, a recent Wall Street Journal article notes.

Bangladesh — ranked the most corrupt country on earth in 2005 and still going strong — saw its funding for 14 road contracts cut off by former Bank president Paul Wolfowitz after allegations of corrupt bidding came to light. The Bank’s own ‘governance indicators’ for the country reinforced reason for concern: a decline in measures of government effectiveness, political stability, ‘voice and accountability,’ regulatory quality and control of corruption between 1998 and 2007.

But under Mr. Zoellick, loans to Bangladesh in the past year have doubled to $753 million. The Bank has justified the loans “because it thinks more money would actually help address the [country’s] corruption problems,” reports the Journal.

In the case of Vietnam, the Journal recalls how “bid-rigging, collusion and fraud” marked the country’s $110 million Bank-funded Second Rural Transport Project. An investigation by the Bank’s internal anti-graft watchdog INT found “the usual indicators of corruption” evident in the first phase, and yet despite its dismal history the Bank ponied up more money for the third project, at a cost of $106 million.

Are Vietnam’s roads better, at least? The Bank’s INT department found one Long An Province road had been made of “inferior materials” and that “little or no compaction gave the embankments little chance of surviving flood conditions.” Meanwhile in “hilly” quang Binh province, INT reports “instances of poorly implemented drainage indicated poor supervision and testing regimes and/or possible corruption.”.

Source [PDFver here]

Categories: Odious Debts

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