Advertisement

Ambush at the World Bank

Share
DAVID RIEFF is the author of "At the Point of a Gun: Democratic Dreams and Armed Intervention" and "A Bed for the Night: Humanitarianism in Crisis."

THERE IS STILL a lot we don’t know about the scandal that has engulfed Paul D. Wolfowitz, the former U.S. deputy secretary of Defense who is now president of the World Bank and who is under fire for his reported role in giving a hefty raise and job transfer to his companion, Shaha Ali Riza. But we do know this much: The current crisis is only the latest installment in a long-standing war not just of personalities but of cultures that has roiled the institution since even before Wolfowitz took over in 2005.

The World Bank, dreamed up at the Bretton Woods Conference in 1944 and created in the days just after World War II, is viewed by most knowledgeable people today (except a few hard-line critics on the extreme left and extreme right) as an essential institution. But even the bank’s staunchest supporters concede that in many ways it is also a very peculiar one. In particular, its governance seems radically at odds with its mission.

That mission, more than anything else, is to alleviate poverty and encourage development in the poorest parts of the world. Yet poor countries have very little say in the bank’s operations. Instead, it is controlled by its “shareholders,” whose votes are apportioned according to the amount of money they contribute to its operations. In practical terms, this means that Japan, Europe and, especially, the U.S. still control policy, which, as the bank’s left-wing opponents often point out, recapitulates the balance of power in the world economic system that dominated the world political system before post-World War II decolonization.

Advertisement

To add insult to injury (from the developing world’s point of view, anyway), the presidency of the World Bank has been viewed since the institution’s inception as a U.S. preserve, just as the directorship of the International Monetary Fund has been reserved by tradition for a European. In reality, all others need not apply. (Former World Bank presidents include Washington Post owner Eugene Meyer; lawyer, banker and foreign policy “wise man” John J. McCloy and Vietnam-era Defense Secretary Robert McNamara.)

The bank itself, however, is staffed by people from all over the world. Sociologically, they resemble the staff at comparable institutions, such as the United Nations and the International Monetary Fund. The very least that can be said about them is that they share a suspicion of U.S. motives and the increasingly negative opinion about the U.S. that polls suggest is pervasive throughout most of the world (especially among elites).

The decision of the Bush administration to nominate Wolfowitz, a leading American neoconservative, to succeed the banker and philanthropist James Wolfensohn as the World Bank’s president was widely viewed within the bank as the equivalent of naming John R. Bolton to be the U.S. ambassador to the United Nations -- a gesture of contempt for the institution’s values and a naked declaration that, as the “sole remaining superpower,” the United States would do what it wished, when it wished, no matter what the rest of the world might think.

That Wolfowitz is widely regarded as the architect of the Iraq war -- and that he arrived at the bank surrounded by a coterie of Bush loyalists with neither experience in international institutions nor expertise in development (his senior advisor, Kevin Kellems, was Vice President Dick Cheney’s erstwhile spokesman) -- was bound to stir up opposition.

Wolfensohn also arrived with a “reformist” agenda. But, unlike Wolfowitz, he was neither saddled with the baggage of the Iraq war nor did he bring in his own team of less-than-qualified aides and give them extraordinary decision-making powers. Instead of a Kevin Kellems, Wolfensohn chose as his right-hand man Mark Malloch Brown -- an Englishman who had begun his career in the Office of the U.N. High Commissioner for Refugees and was, by the time of his appointment, a recognized expert on development.

Wolfensohn’s tenure was hardly without controversy, and he certainly had his critics within the bank; they clashed on issues such as how much emphasis to put on human rights and the building of civil society in developing nations.

Advertisement

But Wolfensohn never had to face what Wolfowitz has had to deal with from the first moment of his tenure -- a staff in a perpetual state of near mutiny. Even if Wolfowitz had considerably greater gifts for conciliation and administration -- his failings on the latter point were an open secret within the Bush administration -- he would have had a difficult, if not impossible, time winning over the bank’s staff.

There is an old psychoanalytic joke that goes: “When the right person does the wrong thing, it’s right; when the wrong person does the right thing, it’s wrong.” In a sense, for all his tone-deafness and arrogant disregard for the sensitivities of the bank’s permanent staff, Wolfowitz exemplifies the truth of the saying. The fact is that both his focus on Africa and his determination to put anti-corruption campaigning at the center of the bank’s efforts are eminently defensible priorities.

The problem with getting on your high horse about corruption in the developing world, however, is that you have to be irreproachable yourself. Headquartered in Washington and staffed by people who receive very high salaries (far more than in the U.S. government, for example, and often tax-free to boot), the World Bank has always had to fight the perception that its officials are the kind of people who write stiff notes to poor countries about fiscal discipline before going off to expensive lunches in Georgetown.

By appearing to maneuver a pay raise for his companion, Wolfowitz has done more to confirm that perception than anyone in the history of the bank. As such, he has done great damage to the institution -- damage from which it is unlikely to recover until he is out of office.

The tragedy for Wolfowitz, of course, is that many people at the bank were already gunning for him. But they cannot have expected him to hand them the loaded revolver with which to do the deed.

Advertisement