May 31, 2007


The right (wing) man for the World Bank job (Emad Mekay, 6/01/07, Asia Times)

"Replacing one Bush appointee with another will not resolve the fundamental governance problems of the World Bank," said Peter Bosshard, policy director of the International Rivers Network, a watchdog group that monitors bank projects and policies from San Francisco.

"Member governments should reject a back-door deal that leaves the bank's governance structure intact, and should press for an open, merit-based selection process," he said.

Zoellick's name also raised eyebrows among development groups for his close ties to the US establishment and corporate interests.

Until last July, Zoellick, now 53, was the US deputy secretary of state. He is best known, however, for his role as a former US Trade Representative (USTR), a job in which he campaigned, with mixed results, to force developing countries to open their markets to US businesses and goods.

He is credited with helping bring mainland China and Taiwan into the World Trade Organization, which, like the World Bank and the IMF, often promotes neo-liberal policies criticized as harmful to developing countries. Zoellick also launched the unpopular multilateral Doha Round of trade talks at the WTO, aimed at creating a laissez-faire trade environment, and increased the number of US free trade agreements.

Were they expecting Pat Buchanan?

Posted by Orrin Judd at May 31, 2007 7:46 PM

The breakdown of the IMF/World Bank creditors' cartel has been the most important change in the international financial system since the collapse of the Bretton Woods system of fixed exchange rates in 1973. It is in this context that the battle for reform at the World Bank is most meaningful. The IMF/World Bank cartel is still operating in the poorest countries, and it is through this cartel that the World Bank does its worst damage: the privatization of water in countries like Ghana and Tanzania, the imposition of user fees on primary healthcare and education in Kenya and other African countries, the privatization of social security systems in Latin America and Central and Eastern Europe, the destabilization and overthrow of Haiti's democratically elected government in 2004 and, most recently, the cartel's role in deciding that poor countries in sub-Saharan Africa could not spend 70 percent of the desperately needed aid money that they received from 1999 to 2005--to name just a few of many disastrous examples. For those who care about reform, one feasible change would be to make the World Bank independent of the IMF. Congress--perhaps with Europeans going along--could make this a condition of continued funding for the Bank. In other words, the Bank would no longer make its loans contingent on IMF conditions or approval. This would help break up the cartel and keep the Bank from enforcing some of the IMF's most destructive policies. Realistically, so long as developing countries have no significant voice within the World Bank, it cannot be expected to pursue an agenda that benefits poor countries or poor people generally. But the United States, Europe and Japan show no inclination to change the Bank's voting, or even the nonvoting (i.e., Treasury supremacy), structure in the foreseeable future. Economic and social progress will therefore most likely result from the diminishing power of these institutions, as has happened in recent years. But from a "harm reduction" perspective, detaching the World Bank from the IMF would be a major step forward.

Posted by: Sharon at May 31, 2007 10:55 PM

"an open, merit-based selection process"

Who is doing the selecting? The Euros who have more votes than anybody else? Merit-based? Whose merit? The merit of the entrenched bureaucrats? The merit of yes-men who do whatever the bank governors wanted them to do? The merit of people like UN's Annan? The merit of Chirac's buddies?

"Zoellick's name also raised eyebrows among development groups for his close ties to the US establishment and corporate interests."
How about close ties to the Euro establishments? The Chinese? The Arabs'? Which establishment's tie is the right tie? Is it better if Zoellick has close ties to the kleptocrats' interets than corporate interests? Won't it be better if we just write them a blank check and let whoever hates us the most do whatever they want with our money?

Posted by: ic at June 1, 2007 2:16 AM