[stop-imf] Wolfowitz news

[robert weissman]

Note that Essential Action has started a new web page/blog on Wolfowitz,
<www.nowaywolfowitz.org>.

If Wolfowitz manages to capture the World Bank presidency, we intend to
keep this site operational as a watchdog.

Here are three stories appearing in today's Washington Post. More to
follow soon.


1. Wash Post: Wolfowitz Closing In On Bank Post
2. Wash Post: Wolfowitz's Third World Critics - Whose Agenda Will
Pentagon Deputy Pursue?
3. 3. Eugene Robinson: Remember Huaycan



1. Wash Post: Wolfowitz Closing In On Bank Post

washingtonpost.com
Wolfowitz Closing In On Bank Post
Germany Softens Stance As Nominee Woos Others

By Paul Blustein
Washington Post Staff Writer
Tuesday, March 22, 2005; Page E01

Deputy Defense Secretary Paul D. Wolfowitz closed in on the presidency
of the World Bank yesterday when Chancellor Gerhard Schroeder said
Germany would not try to block Wolfowitz's candidacy.

Schroeder said on German television that President Bush phoned him to
discuss the nomination, "and I told him Germany would not stand in his
way," according to news service reports. "I even think that people will
be positively surprised" by Wolfowitz's leadership at the bank.

The statement virtually extinguished the already-fading chances of a
rebellion by other World Bank member nations against Wolfowitz, whose
nomination by Bush last week became the focus of controversy because of
his role in promoting the invasion of Iraq.

With France, the other major European opponent of the Iraq war, Germany
posed a potential threat to Wolfowitz's candidacy, which must be
approved by the board of the 184-nation institution. The United States
traditionally chooses the World Bank president as part of an informal
agreement in which the European Union gets to name the head of the
International Monetary Fund. But the boards of the two institutions
operate by consensus -- indeed, a German candidate for IMF chief was
forced to withdraw five years ago for lack of support from Washington
and other capitals.

Schroeder's comments made it clear that a European-led challenge to
Wolfowitz is not in the offing. Although there is still a chance that
developing countries could put forward an alternative candidate around
whom Wolfowitz's critics could rally, sources at the bank said that
board members from developing nations have shown no desire to take such
a step.

"It's a closed matter, because there is no willingness on the European
side to oppose the nomination," said a European source at the bank who
spoke on condition of anonymity, as did the other sources, because of
the highly charged nature of the controversy.

European board members are likely to interview Wolfowitz together on
Wednesday, the source added, and Wolfowitz will probably meet with
higher-ranking European officials next week, with formal approval by the
board scheduled for March 31.

A spokesman for the European Commission was quoted in news service
reports yesterday as saying that Wolfowitz would travel to Brussels to
meet with commission officials. Rob Nichols, a spokesman for the
Treasury Department, which oversees U.S. participation in the World
Bank, would not comment on specific plans but said that Wolfowitz "has
reached out to a broad array of European organizations and ministries.
He has had some very positive conversations, and he looks forward to
meeting them at the earliest opportunity."

Wolfowitz's apparent success in preempting opposition to his candidacy
reflected a number of factors, including his own spirited effort to
dispel concerns about how he would run the bank.

His nomination aroused fears that the Bush administration would use the
bank -- which lends about $20 billion annually to developing countries
for anti-poverty projects -- to further U.S. foreign policy aims,
especially in the Middle East. But Wolfowitz, a former academic and
ambassador to Indonesia, began meeting with board members and granted
interviews in which he repeatedly stressed his dedication to the bank's
antipoverty mission and said he understood that his role would become
that of an "international civil servant" responsible to the entire board.

More important, according to board sources and many outside observers,
was the simple recognition by governments wary of Wolfowitz that
challenging him directly could carry a steep price.

European governments felt they were in no position to do so because the
United States readily acceded to Europe's choice last year of Rodrigo de
Rato, Spain's finance minister, as head of the IMF; future European
candidates for other jobs would almost certainly be at risk if the
Europeans challenged Wolfowitz.

In addition, a battle over his nomination would reopen the bitter wounds
inflicted on the transatlantic relationship by the Iraq war, which have
only recently begun to heal.

Some officials in Europe have privately voiced disgust that nations such
as South Africa and Brazil have refrained from putting forward an
alternate candidate, since developing nations have complained loudly
about rich countries' control of international financial institutions.
But poor countries would be taking an enormous risk in challenging a
U.S. candidate for the World Bank presidency, since their opposition
might put at risk their prospects for getting loans.

=A9 2005 The Washington Post Company



2. Wash Post: Wolfowitz's Third World Critics - Whose Agenda Will
Pentagon Deputy Pursue?


http://www.washingtonpost.com/ac2/wp-dyn/A54695-2005Mar21?language=3Dprinte=
r
washingtonpost.com
Wolfowitz's Third World Critics
Whose Agenda Will Pentagon Deputy Pursue?

By Jefferson Morley
washingtonpost.com Staff
Tuesday, March 22, 2005; 6:00 AM

"I am not going to impose the U.S. agenda on the [World] Bank," Paul
Wolfowitz told Reuters last week. "I am ready to listen."

If Wolfowitz, the controversial undersecretary of defense nominated to
lead the global anti-poverty institution, listens to online commentators
in the developing countries where the bank does most of its work, he
will hear plenty of criticism and questions.

In the Philippines, an editorial in the Daily Inquirer asks, "Can
Wolfowitz take the next step and lead the World Bank to accept its
mistakes and change some of its policies?"

The question is relevant, says the Manila daily, because Wolfowitz "is
one of the principal architects of the US invasion of Iraq. The war was
waged on non-existent grounds: there was no immediate terrorist threat
from Iraq, there were no weapons of mass destruction, there was no
conspiracy between Saddam Hussein's odious regime and Osama bin Laden's
equally monstrous terrorist network."

"If in the face of incontrovertible evidence, Wolfowitz cannot bring
himself to admit any errors in judgment, can we expect him to continue
the reform of the World Bank -- a process which requires him to publicly
accept mistakes?"

The editors credit the bank's current president, James Wolfensohn for
moving beyond massive development projects in favor of more grass-roots
work. They question Wolfowitz's priorities and wonder whether he will
support debt relief for poor countries.

Such a policy "will release billions of dollars into the necessary work
of easing poverty, stimulating the economy, raising living standards,
and investing in education. Instead of essentially working for the
creditors, many of whom have already profited from the debt, developing
countries around the world can finally work for their own benefit. Like
democracy's rising tide, that of economic growth can lift all boats too."

"When billions of dollars are at stake," the editors ask, "whose side
will Wolfowitz be on?"

The Times of London supplied a possible answer on Sunday: "Wolfowitz has
been a strong advocate of debt relief for Iraq, lobbying the
international community to give the post-Saddam regime a fresh start.
This may make him more amenable to Britain's plan for 100 percent
multilateral debt relief for the world's poorest countries."

But the editors of Mmegi Online in Botswana are skeptical. They describe
Wolfowitz as one of "the kingpins in the Bush agenda to Americanise the
world and eliminate non-conformists." Mmegi predicts the criteria for
World Bank loans will become "purely based on whether the country tows
the American line."

In Pakistan, the English-language daily, Dawn says Wolfowitz's
"arrogance and hubris" make his nomination "an ill-advised move."
Another leading Pakistani daily, The News, says the United States needs
to know "that a bank that is too visibly subordinated to narrow US
objectives will be ineffective, because it will be illegitimate."

In Indonesia, where Wolfowitz served as ambassador from 1989-93, the
Antara news agency suggests Wolfowitz's nomination signals a new U.S.
approach in the war on terrorism. "The US is now trying to use 'carrots'
instead of 'clubs' to fight terrorism," said one Indonesian expert in
Washington.

With European political leaders reportedly accepting the nomination, the
issue is less whether Wolfowitz will get the job than what agenda he
will pursue, according to the German broadcast network Deutsche Welle.

"My worry is the World Bank will now become an explicit instrument of US
foreign policy," economist and Nobel laureate Joseph Stiglitz said in an
interview with a British television program published in the Daily
Telegraph. "It will presumably take a lead role in Iraqi reconstruction,
for instance. That would seriously jeopardise its role as a
multi-lateral development body."

Stiglitz's views matter, says the London daily, because he previously
served as the World Bank's chief economist under the current president,
James Wolfensohn, and helped steer the organization away from "the
discredited diet of fiscal austerity and rapid market liberalisation it
had force-fed developing countries for years."

Stiglitz fears a reversal if Wolfowitz takes the helm.

"In recent years, more moderate policies and an anti-poverty focus have
won the bank much more respect across the developing world," he says.
"That progress would be badly undermined by an extreme turn to the right."

One of Wolfowitz's few supporters says his pledge not to impose a U.S.
agenda on the bank need not be taken too seriously.

Amity Shlaes, columnist for the Financial Times (subscription) of
London, says the virtue of Wolfowitz's nomination is precisely that he
will advance an American agenda of "muscular diplomacy." Shlaes laments
that Wolfensohn has made himself popular at the bank by stressing
poverty reduction and enlisting the help of nongovernmental
organizations. The bank, she writes, "has become obsessed with the
environment. And it has battled too little for the entrepreneur and too
much against poverty."

Shlaes predicts that Wolfowitz will try to shift the bank's emphasis
from poverty reduction to "nation-building and economic growth. His
World Bank projects will reflect his experience in Indonesia where, as
ambassador, he promoted stability and growth by promoting openness
(read: democracy)."

One test of Wolfowitz's tenure at the World Bank will be Iran, which
President Bush has described as part of a global "axis of evil." The
bank says that it has $432 million worth of projects in the country,
including a major upgrade of Tehran's water sanitation system.

The test is this: Does Paul Wolfowitz understand that part of his new
job is cleaning the sewers for poor people in countries with unpopular
governments?

=A9 2005 Washingtonpost.Newsweek Interactive


3. Eugene Robinson: Remember Huaycan


washingtonpost.com
Remember Huaycan

By Eugene Robinson

Tuesday, March 22, 2005; Page A17

"When elephants fight," says the African proverb, "it is the grass that
suffers." So, as the Bush administration goes tusk to tusk with Old
Europe to install the architect of the Iraq war as president of the
World Bank, let's not get so engrossed that we forget the billion people
underfoot -- the "grass" that the World Bank is supposed to cultivate
out of desperate poverty.

The war in Iraq is as much a product of Paul Wolfowitz's grand idea to
democratize the Middle East as anything else, and to the war's opponents
this should disqualify him as head of the institution that is supposed
to build bridges, not bomb them.

As deputy defense secretary, Wolfowitz has paid too little attention to
life-and-death details such as troop levels and body armor. His blithe
assumption that U.S. troops would be greeted as liberators was wrong.
Domino-effect events in Lebanon, Egypt and the Palestinian territories
keep alive the chance that the gambit he designed may ultimately work,
but it's still too soon to tell. European leaders who opposed the war
see his nomination as in-your-face American arrogance.

But I'm not sure any of this is relevant to the World Bank's mission,
and I'm sure it doesn't matter to the people of Huaycan.

Huaycan, which I got to know a few years ago when I was a correspondent
in South America, is a vast shantytown on the outskirts of Lima, Peru --
a sprawling settlement that spills down a bleak, treeless, utterly
barren hillside toward the polluted trickle that Peruvians still grandly
call the Rimac River.

Tens of thousands of people lived there -- no one knew exactly how many.
Most were internal refugees who had fled political violence and economic
devastation in the high Andes. They had come to the big city, or at
least as far as its bleakest fringe, to scrape out a living. You could
tell the newest arrivals because their homes were built entirely of
woven reed mats. Those who lived in two or more rooms, enclosed with
cinderblocks, were the affluent of Huaycan.

I remember how pristine the children looked as they went off to school
in the morning. To get their uniforms so clean and crisp, the women of
Huaycan had to take the laundry all the way down to the river to wash
it, then haul it back; if they were lucky, they owned or could borrow an
iron, and perhaps someone in the family had earned enough money that day
to buy a little starch.

When we think of extreme poverty we often think of villages and huts,
but increasingly we should be thinking of places like Huaycan.
Urbanization is one of the great transformations underway in the world
today, as economic trends and political upheaval draw people from the
countryside to the cities in massive numbers. Throughout the developing
world, shantytowns ring major cities like necklaces of misery. By 2015,
according to United Nations estimates, 23 cities in the world will have
populations of more than 10 million. Bombay, Lagos, Dhaka, Sao Paulo,
Karachi and Mexico City will all be bigger than the Big Apple.

These Third World mega-cities are not only reservoirs of poverty but
also cauldrons in which culture, politics and violence mix in
unpredictable ways. Their size overwhelms local and national
governments; other sources of authority rush in to fill the vacuum --
fundamentalist religion, radical politics, organized crime. The hillside
slums of Rio de Janeiro, for example, are ruled by drug-dealing gangs
that dare the police to enter. Try to imagine what sort of worldview
young minds are forming in the slums of Karachi or Cairo.

In Peru, shantytowns are called pueblos jovenes -- young towns. That's
just what these improvised settlements are: the world's youth, the
world's future. It's a future the World Bank could, and should, help shape.

My worry about Paul Wolfowitz is that his well-known zeal to spread
democracy will lead him to focus the bank's lending and influence so
intensely on reforming governmental institutions -- a key step toward
economic growth -- that he overlooks the desperation and ferment in the
slums and shantytowns of the world. The other day, as part of a charm
offensive, he chatted by phone with Bono, the Irish rock star and
poverty wonk. He should keep in mind the title of one of Bono's most
famous songs, "Where the Streets Have No Name." That's the place to start.

eugenerobinson@washpost.com