The Wolfowitz Coup

Although many thought it was a cruel practical joke when Paul Wolfowitz’s name was first floated to head the World Bank, this was no April Fool’s prank: Last Thursday, the executive directors of the World Bank approved the key architect of the Iraq war as president of what is supposed to be the world’s largest development agency.

For decades, the World Bank has veered out of control with a corporate-led development model. The Bank has pushed mega-development projects that have displaced millions of people, failed to improve national well-being and thrown countries into a downward debt spiral.
Simultaneously, it has pushed market fundamentalist policies — including blind support for privatization, deregulation, and marketization and commodification of social services and public goods — that have benefited multinational corporations, but impoverished hundreds of millions.

Periodically, the Bank acknowledges its past failures — devastatingly obvious upon objective review of its record — and promises to start anew. With each renewal, however, the institution manages to repeat the mistakes of the previous era, yet again.

If the Bank is going to continue to exist, it does need a new start, but not the kind that Paul Wolfowitz’s nomination portends.

Wolfowitz assumes the presidency of the Bank thanks to colonialist tradition and craven geopolitical calculation.

By tradition, but for no conceivably justifiable reason and without any legal requirement, the United States picks the head of the Bank.
Sneering at the rest of the world, the Bush administration chose a man who symbolizes U.S. unilateralism and contempt for the rule of law.

Although tradition says the rest of the world accedes to the U.S.
choice, Europe does have the votes to block a U.S. selection, and organized opposition from developing countries would have made it very hard for the Wolfowitz nomination to succeed.

But Europe wasn’t willing to force a confrontation with the United States — it being perfectly clear that the Bush administration knew how distasteful the nomination would be in Europe, where there is continuing and overwhelming opposition to the Iraq war.

Instead, the Europeans opted for horse-trading. France hopes to win U.S.
support for its candidate to run the World Trade Organization. Germany is seeking a seat on the UN Security Council. And the Europeans reportedly extracted a commitment for a new number two position at the Bank, to be reserved for a European.

The developing countries also chose to sit on their hands. There was some Machiavellian calculation here, too — Brazil also hopes for a Security Council seat — but generally the poor countries had a better defense for staying quiet. Unlike the Europeans, they actually borrow from the World Bank and are subject to its dictates, so challenging a presidential contender, with the likelihood of failing, would be a major gamble.

While the Europeans cut deals, Wolfowitz quickly launched what all labeled a “charm offensive.” He noted his concern for the poor, and repeated that he understood the Bank chieftain to be a civil servant responsible to all nations, not just his friends in the Bush administration. He added that he understands he will have to tamp down his zealous advocacy of democracy.

Restrain his fervent commitment to democracy?! Are you serious?

Paul Wolfowitz does not have a record of promoting democracy.

He helped sell the Iraq war to the U.S. public on false pretenses of the threat of weapons of mass destruction, a major betrayal of democratic principle.

But it wasn’t as if bringing democracy to Iraq was the hidden agenda. In fact, after occupying Iraq, the United States resisted elections in the country, until Iraqis forced the United States to accede.

Wolfowitz’s allies say he worked to promote democracy and human rights in Indonesia when he was U.S. ambassador there. But as Northwestern University Professor and Indonesia expert Jeffrey Winters notes, there is no available press account of Wolfowitz mentioning democracy or human rights while ambassador — but an extensive record of apologetics for the despotic Suharto regime. Indonesian human rights activists say Wolfowitz never met with them.

Wolfowitz comes to the World Bank presidency with no relevant development experience but for his oversight of the reconstruction of Iraq — a project beset by corruption, cronyism and incompetence, and which has failed miserably at delivering water, health, security and other basic services promised to the Iraqi people.

Everything about Wolfowitz’s career, including his time in Indonesia and overseeing Iraqi reconstruction, suggests he is likely to intensify rather than reform the failed World Bank corporate-led model of development.

Perhaps the only positive note about his assumption of the Bank presidency is that he brings a skepticism about the institution’s effectiveness, and perhaps a willingness to shrink its controlling powers, including by getting poor countries off of the loan treadmill.
(In an endless cycle, loans generally end up requiring more loans to be repaid — and so make borrowing countries especially vulnerable to conditions attached to the provision of subsequent loans. Debt payments also drain vital financial resources from poor countries, with deadly
consequences.) Wolfowitz has indicated interest in substituting grants for loans, and, especially if prodded by a mobilized, global civil society movement, may be ready to embrace full and immediate cancellation of the debts owed by the world’s poor countries.

The first chance to help achieve this long-overdue goal will be at the protests accompanying the World Bank and International Monetary Fund’s annual meetings, April 16-17 in Washington, D.C. For more information on these activities, see <www.globalizethis.org>.

Russell Mokhiber is editor of the Washington, D.C.-based Corporate Crime Reporter, <http://www.corporatecrimereporter.com>. Robert Weissman is editor of the Washington, D.C.-based Multinational Monitor, http://www.multinationalmonitor.org. Weissman maintains the blog www.nowaywolfowitz.org, and is a member of the Mobilization for Global Justice, which is sponsoring the April protests at the World Bank and IMF meetings. Mokhiber and Weissman are co-authors of On the Rampage:
Corporate Predators and the Destruction of Democracy (Monroe, Maine:
Common Courage Press, 2005).

(c) Russell Mokhiber and Robert Weissman

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