Hugh Williamson
Financial Times
March 6, 2006
Paul Wolfowitz, president of the World Bank, won backing on Monday for his drive against corruption from Transparency International, the anti-graft watchdog, but was urged to integrate more “corruption risk analysis” into project development.

Huguette Labelle, recently appointed chairwoman of the board of directors of Transparency International, told the Financial Times she was “impressed that Mr Wolfowitz is committed to the task” of tackling graft.

But she argued additional resources would be required if the bank wanted to make a difference on the ground. Since his arrival at the bank last year, Mr Wolfowitz has signalled his determination to crack down on corruption. Under the former US deputy defence secretary, the bank has frozen loans to several countries including India, Kenya, Bangladesh and Chad, because of concerns about corruption.

These decisions have provoked concern in some developing countries.

But Ms Labelle, former head of Canada’s development aid agency, suggested that corruption in World Bank projects still went unchecked, and that anti-graft actions were often disjointed from other aspects of the bank’s work.

“The institutional integrity department [an internal World Bank corruption monitor] should be sufficiently resourced and should react in a more timely fashion to really make a difference,” she argued.

The bank should also expand its pre-project assessments to cover not only the “impact on the environment and on women”, but also on corruption-related issues. “If this were addressed early, it would be an incentive for recipient governments to implement and enforce [anti-corruption] laws more fully,” said Ms Labelle.

Comments by the non-governmental organisation often carry weight in the World Bank, the Organisation for Economic Co- operation and Development and other international agencies, due to TI’s expertise and the career histories of many of its staff.

Ms Labelle criticised the Kenyan government for not acting to stamp out corruption, in spite of pledges at his election by President Mwai Kibaki that this would be a priority. Several ministers resigned recently over a spiralling corruption scandal.

The use of anti-corruption messages to win votes “often comes back to haunt politicians”, Ms Labelle argued, acknowledging that as corruption had become a higher-profile issue, the risk it would be abused by politicians had increased.

Additional reporting by Alan Beattie in London