Dead Men Left

Thursday, March 17, 2005

Even worse than Bono

You heard me - worse than Bono; much, much, worse:

There has been a cool response to President Bush's nomination of Paul Wolfowitz to be the next head of the World Bank, a key development agency.

Mr Wolfowitz, 61, currently US Deputy Defence Secretary, has a reputation as a "neo-conservative" hawk and was a key architect of the Iraq war.

Jeffrey Sachs, a sackcloth-and-ashes reformed free-marketeer and a man who knows a thing or two about inappropriate policy, lays out the opposition case:

Hundreds of millions of people depend for their lives and their livelihood on World Bank efforts to fight extreme poverty - we need an individual with a demonstrated track record and relevant professional expertise.

Mr Wolfowitz does not fit those criteria at all. He is a man without international development experience, without professional qualifications.

He has not demonstrated an interest in the Millennium Development Goals, the shared international commitments to the fight against extreme poverty...

You wouldn't choose Mr Wolfowitz to be surgeon-general, a position for a doctor. You wouldn't choose Mr Wolfowitz to be solicitor-general, a position for a lawyer. And for the same reason, you shouldn't choose Mr Wolfowitz to be head of the World Bank.

Aha, reply Wolfowitz's supporters, he actually knows all about developing countries' problems. Why, Mr Wolfowitz was once ambassador to Indonesia:

Wolfowitz’s career is a textbook example of cold war politics that focused for nearly 50 years on the care and feeding of dictators like Suharto, Chun Doo Hwan in South Korea, and Ferdinand Marcos in the Philippines. While there were differences in nuance between presidents, these policies remained remarkably consistent from administration to administration. Where Wolfowitz and the Reagan Republicans departed from the Democrats was in their public stance toward these unsavory figures.

Wolfowitz was (Richard) Holbrooke’s immediate successor in the top Asia slot at the State Department, serving there from 1982 to 1986. For the next three years he was U.S. ambassador to Jakarta, and from 1989 to 1993 he was the “principal civilian responsible for strategy, plans, and policy under Defense Secretary Dick Cheney,” according to his official biography. He has remained tightly linked to Indonesia through his role in the U.S.-Indonesia Society, a private group funded by the largest U.S. investors in Indonesia that, behind the veneer of “cultural exchanges,” pushes for closer ties with Jakarta. Its past members have also included members of Indonesia’s intelligence and military forces... During his tenure in the Reagan and Bush administrations, Wolfowitz played a key role in defining U.S. policy toward South Korea and the Philippines at a time of intense repression and growing opposition to authoritarian rule.

The most obvious logic behind this otherwise grossly inappropriate appointment seems to be a deliberate attempt to profoundly shift the Bank's priorities from the top downwards. It is of course true that the World Bank has been a dismal failure in recent years, as the resignation of former Bank chief economist, Joe Stiglitz, demonstrated. Stiglitz's particular complaint was the Bank's political incapacity when set against its Bretton Woods partner, the International Monetary Fund. The Bretton Woods institutions were established by international agreement at the end of WW2 to stabilse and regulate a post-war global economy centred on a system of fixed exchange rates.

The IMF and the World Bank group underwent one mutation after the collapse of the fixed exchange-rate regime in the early 1970s. The shift then was especially pronounced on the part of the IMF, which moved from a provider of short-term currency stability to direct involvement in establishing long-term macroeconomic frameworks: for the global South, the notorious "Structural Adjustment Programmes" were the immediate (and disastrous) consequence. The World Bank adapted itself to meekly trailing behind the neoliberal lead set by the IMF.

Both institutions entered deep political crisis in the late 1990s, the product of external and (at least for the World Bank) internal discontent. They have, so far, not come close to a successful resolution. Is it possible (he idly speculates) that some further mutation is being engineered?