The poodle and the Wolf

19 March 2005 |

If he's serious about Africa, Blair must oppose Bush's World Banker

Noreena Hertz
Saturday March 19, 2005
The Guardian


This is the year Africa will be saved, and we're going to do it - that, more or less, was the prime minister's message at the launch last week of the report of the Commission for Africa. But not with Paul Wolfowitz in charge of at the World Bank, we won't.

Key recommendations - for example, that corrupt dictators' cash in foreign bank accounts should be repatriated, and that forcing policies such as privatisation on countries in exchange for debt relief and aid needs to be rethought - are highly unlikely to be endorsed by Wolfowitz.

This, after all, is a man who, while US ambassador to Indonesia, was scarcely a vocal critic of the blatantly corrupt Suharto regime; a man who embodies the mindset that compels other countries to adopt a particular set of values and policies, whether they are right or not.

Wolfowitz is hardly even a champion of the values on which the bank itself was founded. He is neither well placed to help it meet its early goal of helping countries rebuild, nor its later one of poverty alleviation. Wolfowitz recently told the US congress that war-ravaged Iraq should pay not only for its reconstruction but also for the war itself out of its oil revenues.

Although the bank today is hardly a collaborative or progressive operation, any moves its current president, James Wolfensohn, has made to include environmental considerations in lending decisions and to broaden the range of nations consulted are unlikely to be continued under Wolfowitz, who has a track record of rewarding subservience. He banned countries that opposed the war with Iraq from bidding for reconstruction contracts.

Perhaps most worryingly he is George Bush's chosen one. And the Bush administration is a very long way from the bank's espoused goals and mandate. Development thinkers are now pretty much unanimous that trade subsidies are a serious barrier to development. Wolfensohn has spoken out against trade subsidies. But the Bush administration continues to reject calls to remove subsidies on its cotton and sugar producers, while its response to the recent World Trade Organisation ruling that US cotton subsidies breached its trade rules has been an attempt to negotiate a way out of the ruling with Mali and Brazil.

There could hardly be a less suitable administration to choose a candidate to lead an organisation whose mission is to alleviate poverty. At home Bush has implemented a series of tax cuts for the rich, and his latest proposal to reduce the US deficit has been to suggest the slashing of food aid to his country's poorest.

Of course, the US hijacking the World Bank to serve its foreign policy interests is not a new phenomenon. But the Bush administration is unabashedly forthright in its pursuit of self-interest, and in its willingness to use aid as a tool to promote its geo-political goals. Bush has said that he nominated Wolfowitz because he had proved himself adept at promoting US interests while ambassador to Indonesia. But the nomination of the World Bank president is being left to a government that has cut off aid to any country that does not exempt it from being held to account by the international criminal court, and that has resisted attempts by Wolfensohn to weaken the US stranglehold over the bank.

It is only a matter of con vention that America gets to nominate the president of the World Bank. The US has twice successfully rejected Germany's candidate to head the IMF, despite the convention that allows Europe to nominate its head.

A rejection of the presumption that the US nominates the bank president would chime well with today's climate of demands for more democracy and transparency in the development arena. It is also something that fits with the Labour government's position on necessary reforms of the international financial institutions.

Jack Straw said of Wolfowitz's nomination: "If his appointment is confirmed, we look forward to working with him." That is not the response the world is looking to Britain for. If Blair is serious about making poverty history, he will have todo away with such diplomatic niceties for once. A U-turn on Blair's wider support for Bush unfortunately remains a pipe dream. But Blair credibly can, and should, oppose the Wolf.

· Noreena Hertz is the author of IOU: The Debt Threat and Why We Must Defuse It, and professor of global political economy at the University of Utrecht

hertz@yahoo.co.uk

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