Odious Debts

What corruption?

Lisa Peryman, Odious Debts Online
October 20, 2007

While the World Bank refuses to tackle head-on evidence of project graft exposed by its own graft-finding watchdog, revelations of project rot keep on coming.

Following recent coverage of Bank project corruption in India, the Wall Street Journal has since uncovered more fraud monkey business, this time in Cambodia.

WSJ reports that an investigation of seven Bank projects in Cambodia by the World Bank’s internal anticorruption unit, INT, has “revealed stunning levels of fraud, extortion, bid-rigging, bribe-taking and what the Bank euphemistically calls ‘misprocurement’ in nearly every aspect of the examined projects.” It adds that, “what the INT found – one project after another corrupted root-to-branch – was almost certainly symptomatic of what happens across the board.”

The “real issue,” notes WSJ, “is how the Bank responds once the nasty details are laid before it.”

In one or more of the projects, the WSJ reports “75 per cent of companies seeking project work “admitted to offering bribes to government officials, some of them in the tens of thousands of dollars. In another project, investigators found that contracts for 17 out of 18 new office buildings were manipulated in favor of just one company, and that they had been built with substandard materials – or not built at all. The jockeying for bids even led to contracts being taken out on people’s lives. And so on and on, causing one to wonder what part of the World Bank’s work in the country wasn’t corrupted.”

Rather than withdraw funding, WSJ says the World Bank “is resuming business as usual first, on the hope that the government keeps its promises” to incorporate anti-corruption action plans.

Although, the Bank has said it wants to work with the Cambodian government to “enact reforms to reduce rural poverty, encourage social development, improve the business and investment climate, and strengthen the rule of law,” the Journal forewarns a different outcome:

“If the INT reports mean anything, it is that Cambodia’s government cannot administer even the most basic projects honestly. It’s far from clear that further aid won’t simply generate more corruption, however many strings are attached.”

 

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