Stephen Mandel, The Banker
November 6, 2006

Protests by the World Bank that odious regimes should not receive funding from new lenders ring hollow when viewed alongside the loans that have been knowingly made to oppressive and corrupt regimes, senior economist for the UK-based think tank, New Economics Foundation (NEF), Stephen Mandel writes.

The Bank has sounded an alarm recently about new sources of lending, in particular from China, to certain pariah states, such as Sudan and Zimbabwe, which could dramatically reduce the power of financial sanctions the West can apply to keep such states in line.
As in the case of Mobutu Sese Seko, the former president of Zaire (now the Democratic Republic of the Congo), Mandel writes: “It seem inherently unjust if corrupt and dictatorial regimes [such as Mobutu’s] can take out loans without the consent of the people, steal the proceeds and leave the citizens to face the consequences without the creditors taking any responsibility.”

The International Monetary Fund at one point, said Mandel, seconded a senior official to the Zaire Central Bank and, while there, he wrote a memo stating that corruption was so serious a problem that there was “no (repeat no) prospect for Zaire’s creditors to get their money back.”

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