Walden Bello and Shalmali Guttal, Focus on the Global South
Committee for the Abolition of the Third World Debt (CADTM)
May 9, 2005

With all the hullabaloo generated by the designation of Paul Wolfowitz as his successor, outgoing World Bank President James Wolfensohn’s record in leading the Bank has so far escaped serious scrutiny, claim Walden Bello and Shalmali Guttal in a new report drawn from Bello’s latest book, Dilemmas of Unmaking the American Empire.

Bello and Guttal, members of the Bangkok-based research organization, Focus on the Global South, chart the highs and lows of Wolfowitz’ time with the Bank noting that the World Bank’s stated aim of “good governance” was contradicted by sensational revelations in the 1990s regarding some $30 billion in funds funneled to the Suharto
dictatorship in Indonesia.

According to various analyses, the authors say the Bank accepted “false statistics, knew about and tolerated the fact that 30 cents of every dollar in aid it dispensed to the [Suharto] regime was siphoned off to corrupt uses, legitimized the dictatorship by passing it off as a model for other countries, and was complacent about the state of human rights
and the Suharto clique’s monopolistic control of the [Indonesian] economy.” The Bank took more hits as news of corruption and malpracticecame to light in Bank supported infrastructure projects, said Bello and Guttal. Prominent among these were the Lesotho Highlands Water Project (LHWP) and the Bujagali Falls dam in Uganda. When the Lesotho High Court in southern Africa started investigating charges of bribery
against several major international dam-building companies and public officials in connection with the LHWP, the Bank instead of supporting a nationally accountable legal process quietly conducted its own internal investigation of three of the companies charged with paying bribes and concluded that there was insufficient evidence to punish them for corruption. In 2002, the Lesotho High Court eventually succeeded in
convicting four companies for paying bribes, among them Acres International, a long term “ally and pet contractor” of the World Bank that the Bank had cleared in its internal investigation. It took the Bank well over a year to eventually announce that it would disbar Acres International from World Bank contracts for a period of three years.