World Bank president’s ‘mixed legacy’

Lisa Peryman
Odious Debts Online
January 7, 2005

World Bank President James Wolfensohn’s recent announcement that he was unlikely to stay in his post as head of one of the world’s most powerful financial institutions, cast his decade-long legacy into the spotlight this week.

Bank insiders credit Mr Wolfenshohn with making corruption a priority, advancing debt relief to poor nations and bridging the gap between Bank priorities and the concerns of civil society groups and development organizations.

However, observers say that while Mr Wolfensohn tried to engage critics and projected sensitivity toward certain issues, it was unclear whether the he was able to influence Bank senior management to adopt outside recommendations.

“Although we may have had Wolfensohn’s ear or his sensitivity towards some issues, it is not clear to me how well he brought the institution with him when he came to listen,” Manish Bapna, executive director of the Bank Information Center, a Washington-based monitor of international financial institutions, said when contacted by the Inter Press Service (IPS) news agency.

“I think his overall performance has been mixed,” said Bapna, referring to critics who have argued that Wolfensohn’s emphasis on poverty reduction remained “largely rhetorical” and failed to challenge “the prevailing economic policies and development paradigm of the Bank.”

Activists at a session on “Civil Society Engagement with the World Bank” at the Africa Social Forum last month, reported largely negative dealings with the Bank, citing the institution’s “bad record” in Africa and the continent’s continued poverty.

Console Tleane from South Africa’s Freedom of Expression Institute said the Bank’s primary objective in trying to engage civil society was to boost its public relations effort in order to lend a veneer of legitimacy and transparency to its “opaque and undemocratic” operations.

A Nigerian delegate described a recent meeting with the Bank on Poverty Reduction Strategy Papers (PRSPs) in which she gained the impression the Bank had already decided on what policies should be adopted in her country and was merely “going through the motions” of holding a meeting with civil society activists.

Kenyan activist Njoke Njehu of 50 Years is Enough, a Washington-based NGO, argued that all three major civil society attempts to engage the World Bank had failed, including the World Commission on Dams and the Extractive Industry Review. The Review released in 2003 was commissioned personally by Mr Wolfensohn and recommended that the World Bank cease funding for coal projects worldwide, phase out its support for oil production and focus its development resources on renewable energy. Wolfensohn did not abide its recommendations.

While critics concede Wolfensohn has stepped up Bank efforts to fight corruption, they say it is pressure from outside the Bank that caused him to act.

For example, IPS reports it was only after an aggressive lobbying campaign by development groups that the Bank seriously considered blacklisting Acres International, a Canadian engineering company, for corrupt practices in the massive southern African Lesotho Highlands Water Project.

Canadian NGO Probe International organized a particularly strong letter-writing campaign urging Mr Wolfensohn to live up to his promise to rid Third World countries of corruption by debarring Acres, the first international firm to be convicted in the landmark Lesotho corruption trials.

Probe International supporters responded with an outpouring of encouragement for Mr Wolfensohn’s public stance on eradicating the “cancer of corruption,” calling on him to debar Acres from receiving future World Bank contracts.

Supporters also reminded Mr Wolfensohn of the importance of living up to his words: “If we are going to campaign against corruption outside the bank in our borrowing countries,” he said, “we have to be absolutely certain that we hold ourselves to the highest standards on the inside.”

Earlier this year, a representative of a Washington, DC-based legal advocacy group told a US Senate roundtable on multilateral development bank (MDB) whistleblower protection policies, it had been “overwhelmed” by whistleblowers from MDBs who describe a “nightmare of repression” when they trust MDB reporting channels and try to use them.

Thomas Devine, legal director of the Government Accountability Project (GAP), said nearly all the new whistleblowers his agency had seen were from the World Bank.

Apparently, the Bank’s whistleblower policy in practice had been “the primary weapon against them,” he said, adding that the Bank’s own Department of Institutional Integrity (INT) had been more active investigating whistleblowers than their evidence of institutional corruption.

According to Mr Devine, Mr Wolfensohn had personally intervened repeatedly with INT investigations of whistleblowers. Unless Mr Wolfensohn drastically reversed his course Devine warned, “his legacy for the Bank will be intensified secrecy enforced by repression.”

Categories: Africa, Odious Debts

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