April 11, 2006
Jakarta: World Bank President Paul Wolfowitz unveiled corruption fighting measures on Tuesday that will change the way the bank designs and approves development projects for poor countries.
In a speech while traveling in East Asia, Wolfowitz said graft was a major impediment to development and the bank would step up transparency and anti-corruption efforts on three fronts. In countries with serious problems, he said the bank will take such steps as investing in anti-corruption expertise and governance specialists, and will increase its investments in such key areas as judicial reform, civil service reform, the media and freedom of information. The bank will also introduce a new system to reduce the risks of corruption in its projects, including steps to “address the incentives and opportunities to fight corruption right from the start,” he said. Wolfowitz said that has already been done in Indonesia’s Aceh province, working to recover from the devastating Indian Ocean tsunami of December 2004. The bank believes that more community involvement will mean less wasted money. Survivors in Aceh are “managing their own reconstruction projects” and widows are “using microfinance to improve their family’s lives,” he said. Wolfowitz said the third front was to expand partnerships with groups interested in improving fiscal transparency, such as civil organizations and the private sector. While some companies “take advantage of weak governance to alter the competitive playing field, the private sector as a whole stands to lose the most when corruption is pervasive and the rule of law is undermined,” he said. Later in a conference call with reporters, Wolfowitz said there were no simple answers to fighting corruption. “It’s not a problem that has a single, simple solution,” Wolfowitz said. “It’s a problem where you’ve got to work at making progress over time but to some extent you have to chase the corrupters because they are going to figure out ways to deal with whatever mechanisms people develop to control them.”
Corruption focus Since taking the helm of the World Bank last June, Wolfowitz has focused on corruption, halting lending to Chad when the government made a grab for oil profits in breach of an agreement with the bank. He also suspended projects in India and Kenya over corruption concerns and more recently pushed for more transparency in the Republic of Congo’s oil sector when the country applied for debt relief. “Corruption is a more serious problem in some countries than in others, and some countries are more serious about tackling it than others,” he told reporters. A former U.S. ambassador to Indonesia, Wolfowitz praised Jakarta for its progress in both establishing democracy and fighting corruption. But he said it still had a long way to go and the bank would help with a $900 million program to improve transparency and combat fraud. Indonesian President Susilo Bambang Yudhoyono has said wiping out graft is one of his top priorities and in December 2004 ordered key ministerial departments to beef up supervision of state coffers and stop funds from leaking. (Additional reporting by Lesley Wroughton in Washington)