At World Bank, a pledge to focus on corruption

Donald Greenlees
International Herald Tribune
April 13, 2006

Paul Wolfowitz, president of the World Bank, pledged Tuesday to push the fight against corruption to the center of the bank’s global development work in a speech outlining a comprehensive and detailed anti-corruption agenda.

Speaking in Jakarta in a televised seminar on democracy and governance that was attended by government ministers, Wolfowitz said, according to an advance text, that a decade after the bank began its anti-corruption effort, corruption remained “one of the biggest threats to development in many countries.” “In some of the poorest countries, corruption can tear the very fabric of society,” he said. “In the end, governments and citizens will pay a price in lower incomes, lower investment and more volatile economic swings.” Wolfowitz, a former deputy U.S. defense secretary who became the bank’s leader last year, promised that he would lead the fight against corruption on three fronts: in countries where the bank operates, within the bank’s own projects and in building partnerships with global organizations with a stake in better governance. In Indonesia on a six-day visit, Wolfowitz met earlier Tuesday with President Susilo Bambang Yudhoyono and members of his cabinet, where the bank’s governance agenda was the focus of discussions. He has also visited World Bank-financed projects in areas of Aceh Province that were devastated by the 2004 tsunami. His decision to step up the bank’s fight against corruption follows concern by governance experts within the bank that the decade-long effort to combat the problem has had little impact on average levels of worldwide corruption. While in some countries corruption has been reduced, in many others there has been stagnation or a slip backward. Since taking over as head of the bank, Wolfowitz has signaled a tougher attitude toward dispensing bank funds to countries where there is a big risk that money might be misused. Some projects have been suspended in India, Argentina and Kenya. Despite the bank’s greater willingness to block funds to borrowers, bank officials argue that more needs to be done to strengthen internal anti-corruption departments and take the campaign beyond repeated public condemnation of corruption to get real results. In his speech Tuesday, Wolfowitz went a long way toward answering the concern that the bank too often spends more time talking about corruption than taking action. First, he promised to “significantly expand” anti-corruption work in individual countries by “investing in professional expertise to address corruption and backing our teams in the field with governance specialists.” This will also involve using all the banks tools – loans, grants, research and technical assistance – to strengthen governance and fight corruption. Second, Wolfowitz said anti-corruption teams would be deployed in many country offices to work with local institutions as part of a new system to minimize the risk of corruption in World Bank-financed projects. Third, he committed to expanding partnerships with global organizations, governments and the private sector to bolster good-governance efforts in problem countries. At the World Economic Forum meeting in Davos, Switzerland, in January, Wolfowitz reached agreement with the heads of the world’s multilateral development banks to develop a common approach to fighting corruption. Among the measures is adopting a common strategy for blacklisting companies that engage in corruption in development projects. The World Bank is the only development bank to publicly blacklist businesses and individuals engaging in bribery in its projects. Wolfowitz also said he would work with the governments of wealthy nations to prevent stolen money from being moved to foreign bank accounts. The United Nations Convention Against Corruption took effect in December, requiring signatory countries to assist in the repatriation of money obtained through corruption.

Categories: Corruption, Odious Debts

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