Change of guard at World Bank
Thursday, 28 June 2007
Fazle Rashid
Robert Zoellick also was confirmed by the board last Monday to be the next President of the scandal-ridden World Bank, will take up his new assignment on Sunday which is a holiday. Paul Wolfowitz resignation will become effective on June 30 which is a Saturday.
Robert Zoellick, 53 will not back down from corruption which was the signature issue of Paul Wolfowitz. Corruption is a cancer that steals from the poor, eats away at governance and moral fibre and destroys trust, New York Times quoted Zoellick as saying.
Zoellick's first priorities will be to repair the shattered image of the WB, improve working relationships within the bank and between management and the board. The bank is woefully short of fund. Zoellick will try to raise an additional $ 30 billion to finance interest-free loans to the poorest nations.
The WB must diagnose, determine and execute, in concert with developing and developed countries, to restore its dignity and credibility. Zoellick admitted that there are tensions in the system and found high degree of distrust over its anti-corruption drive. He has pledged to restore everyone's trust and assured the board that the bank would not blow away the fund.
An internal probe has detected that the 40 per cent of the WB finance projects are corruption-ridden. The countries that have come under close scrutiny are India, Bangladesh, Vietnam, Indonesia and Cambodia.
In India bid-rigging favoured suppliers with close connection to the upper reaches of the administration in three projects worth $700 million. Wolfowitz stopped funding the projects.
Bank's integrity committee barred 148 individuals and 190 companies from doing business in the WB-financed projects. The bank prosecuted 74 of its employees on charges of fraud and corruption. There were allegations that the departing president Wlfowitz executed the political agenda of the White House. The critics cite the example of Uzbekistan. Wolfowitz suspended bank lending to Uzbekistan for gross violation of human rights.
He was in fact influenced by a political decision. Wolfowitz retaliated against Uzbekistan decision to bar the US warplanes from its airspace. The bank money has also ended up in financing gambling and helping prostitutes in Vietnam.
Another WB official who is responsible for much of bank's present malaises has remained unscathed. The official is Suzanne Rich Folsom who is heading the bank's office of the institutional integrity. Ms. Folsom has been accused by the bank staff that she has trampled the rights of the workers. The bank's 24-member board is not happy with her. There is a huge backlog of investigations. Folsom said her department has been unpopular among bank staff. No one wants to be investigated for wrong doing. James Wolfensohn, a former WB president defended Folsom describing her as an extraordinarily competent official and was unnecessarily sucked into controversy surrounding Wolfowitz.
The fact is there is corruption in all international aid activities, Wolfensohn said adding that "it is not a surprise that in some countries it has become excessive and you should not do business with them." Paul Volcker, a former US federal reserve chairman, who investigated the scandals surrounding the UN sponsored ' Food for oil ' programme in Iraq is investigating corruption and graft cases in the WB-funded projects. The Volcker report on the WB will be ready by September.
Robert Zoellick also was confirmed by the board last Monday to be the next President of the scandal-ridden World Bank, will take up his new assignment on Sunday which is a holiday. Paul Wolfowitz resignation will become effective on June 30 which is a Saturday.
Robert Zoellick, 53 will not back down from corruption which was the signature issue of Paul Wolfowitz. Corruption is a cancer that steals from the poor, eats away at governance and moral fibre and destroys trust, New York Times quoted Zoellick as saying.
Zoellick's first priorities will be to repair the shattered image of the WB, improve working relationships within the bank and between management and the board. The bank is woefully short of fund. Zoellick will try to raise an additional $ 30 billion to finance interest-free loans to the poorest nations.
The WB must diagnose, determine and execute, in concert with developing and developed countries, to restore its dignity and credibility. Zoellick admitted that there are tensions in the system and found high degree of distrust over its anti-corruption drive. He has pledged to restore everyone's trust and assured the board that the bank would not blow away the fund.
An internal probe has detected that the 40 per cent of the WB finance projects are corruption-ridden. The countries that have come under close scrutiny are India, Bangladesh, Vietnam, Indonesia and Cambodia.
In India bid-rigging favoured suppliers with close connection to the upper reaches of the administration in three projects worth $700 million. Wolfowitz stopped funding the projects.
Bank's integrity committee barred 148 individuals and 190 companies from doing business in the WB-financed projects. The bank prosecuted 74 of its employees on charges of fraud and corruption. There were allegations that the departing president Wlfowitz executed the political agenda of the White House. The critics cite the example of Uzbekistan. Wolfowitz suspended bank lending to Uzbekistan for gross violation of human rights.
He was in fact influenced by a political decision. Wolfowitz retaliated against Uzbekistan decision to bar the US warplanes from its airspace. The bank money has also ended up in financing gambling and helping prostitutes in Vietnam.
Another WB official who is responsible for much of bank's present malaises has remained unscathed. The official is Suzanne Rich Folsom who is heading the bank's office of the institutional integrity. Ms. Folsom has been accused by the bank staff that she has trampled the rights of the workers. The bank's 24-member board is not happy with her. There is a huge backlog of investigations. Folsom said her department has been unpopular among bank staff. No one wants to be investigated for wrong doing. James Wolfensohn, a former WB president defended Folsom describing her as an extraordinarily competent official and was unnecessarily sucked into controversy surrounding Wolfowitz.
The fact is there is corruption in all international aid activities, Wolfensohn said adding that "it is not a surprise that in some countries it has become excessive and you should not do business with them." Paul Volcker, a former US federal reserve chairman, who investigated the scandals surrounding the UN sponsored ' Food for oil ' programme in Iraq is investigating corruption and graft cases in the WB-funded projects. The Volcker report on the WB will be ready by September.