Multilateral donors being pushed to the sidelines

Fazle Rashid from New York

THE World Bank (WB) assurance-made by Patel, its Vice-President for Asia, that the Bank would assist Bangladesh in retrieving stolen money stashed abroad, has surprised Bangladeshi diaspora living in North America, particularly New York. The WB has  no such charter as to allow it to act as the retriever of the stolen money.
If it were so, the WB would have to keep itself busy collecting stolen money and returning them to the countries from where the money has been plundered
This rather perplexing issue is at the centre of the present World Bank crisis. Anti-graft and good and transparent governance were the signature policies that the departing WB president Wolfowitz was pursuing steadfastly to make these recipient countries' eligibility for bank funding. This brought him face to face with Bank's European promoters  who said such strict regulations would leave the WB without any client because there is hardly any country which could meet the Bank's prescription.
The WB has no charter that made Patel to make such promises in Bangladesh. The WB's influence to dictate terms to recipient countries has waned in recent times. Money is available from the ever expanding capital market. There is no strings attached to these loans. Moreover, two countries China and Venezuela awash with money are providing soft  loans to countries in Asia, Africa and South America, thus, totally wiping out the influence of such multilateral agencies like the WB, IMF, Asian Development Bank and the WTO. The mere existence of these  institutions are at stake now.
Venezuela is trying to float a bank under the style 'Bank of the South'. The bank would make loans available to Latin American countries  without any strings. Venezuela is wooing Brazil to join the bank. The question is whether the WB, IMF and ADB are still of any use, the Economist posed  the question.
The ADB held its annual meeting in Kyoto, Japan on May 7. The Bank  had commissioned a panel to review its operations and make recommendations. The panel suggested that the Bank should become an adviser and coordinator rather than a lender. ADB's once largest  borrower China is now Bank's largest provider of funds. ADB's annual lending portfolio is a mere $7.4 billion. China has a lending portfolio of $20 billion which is $3.0 billion lower than the WB. China has given the Philippines $70 million to augment its water supply in Manila, where ADB's head office is located. Asia will see a booming investments in improving its infrastructure in the coming decade. It could be as high as $4.7 trillion.