Bank Information Center, Washington : Newsletter on April 11, 2007
1. IFI Updates
World Bank review could shift aid away from social sector projects
World Bank. 4/9/2007
President Paul Wolfowitz called on Francois Bourguignon, the Banks chief economist, to develop a new strategy for World Bank aid effectiveness. Many are concerned about the institution’s potential shift out of health, education and social programs in favor of a narrower focus on economic growth.
Asian Development Bank Begins Evaluation of Controversial Khulna-Jessore Project
ADB. 3/30/2007
The OEDs decision to include Khulna-Jessore Drainage Rehabilitation Project (KJDRP) in its 2007-2009 work-plan constitutes the first victory in the campaign to ensure the approach taken to manage drainage is not repeated in other ADB-funded projects in the region.
New Governance and Anti-Corruption Strategy Approved by World Bank Board
World Bank. 3/23/2007
President Wolfowitz announced that all 24 members of the World Bank Board of Directors approved the new GAC strategy set to rid corrupt and fradulent practices from its lending portfolio.
China threatens to stop borrowing due to anti-graft investigations
World Bank. 3/29/2007
China, the World Banks second biggest borrower, has suggested that Wolfowitzs anti-corruption drive might be overstepping its boundaries and that it might begin turning down loans according to an article by investigative journalist, Richard Behar.
Inter-American Development Bank approves $4.4 billion in debt relief for Bolivia, Guyana, Haiti, Honduras, and Nicaragua
IDB. 3/20/2007
The IDB Board of Governors announced 100% debt relief, effective retoractively to January 1, 2007, for the poorest countries in the Western Hemisphere at the IDB Annual Meetings on March 16, 2007.
World Bank to confirm new Vice President for Africa
World Bank. 3/19/2007
Nigerias Minister of Education, Dr. Obiageli Ezekwesili, is expected to become the next Vice President for Africa at the World Bank.
International Finance Corporation to double number of mining investments in Africa
World Bank/IFC. 3/14/2007
Taking advantage of rising commodity prices, the International Finance Corporation plans to expand its hard rock mining activities to incorporate copper, aluminum and iron ore.
2. Civil Society Highlights
Greenpeace releases new report critical of World Banks role in DRCs forest sector
Greenpeace. 4/11/2007
Report entitled “Carving up the Congo” reveals that the worlds second largest rainforest is under threat, and that World Bank efforts to control the country’s logging industry are failing.
IFIs in Africa News Briefing #16
Bank Information Center. 3/21/2007
Summaries and commentary on the latest news articles from between March 3 and 16 relating to international financial institution (IFI) involvement in Africa.
Wolfowitzs pledge to Africa has hollow ring
Government Accountability Project. 3/16/2007
NGO reports dramatic drop in World Bank lending for Africa during current fiscal year, predicts decline in quality of loans during final quarter if the Bank attempts to meet its commitments.
Parliamentarians call for responsible sovereign lending
PNoWB. 4/10/2007
At the recent annual conference of the Parliamentary Network on the World Bank (PNoWB) A “Parliamentarians Declaration for Shared Responsibility in Sovereign Lending” was launched at the recent annual conference of the Parliamentary Network on the World Bank (PNoWB). The effort aims to stimulate debate and support debt audits at the national level. Find out more at www.debtdeclaration.org.
A Strategic Component of U.S. Energy Security Policy
Global Witness.
The time has come for a global drive towards energy revenue transparency, says a new Global Witness report. Energy revenue transparency limits the scope for oil-related corruption through fiscal accountability. This initiative presents a low cost, high-impact opportunity for both the United States and international oil companies to enhance energy security, improve investment climates, and contribute to the development of poor nations.
Curious to know all the latest about debt campaigning going on around the world?
Jubilee. 4/10/2007
Need some fresh inspiration to keep up your work for Jubilee justice in the 2007 Sabbath year? Then you wont want to miss the Illegitimate debt campaign global bulletin. This is the first in a series that will come out every two months!
3. Spotlight: Spring Meetings Fever!
The 2007 World Bank/IMF Spring Meetings will be held over the weekend of April 14-15 in Washington, D.C. Civil society organizations have also organized a number of events outside of the official meeting venue. Find links to related reports and see a full calendar of events taking place this week on BICs website: www.bicusa.org/spring_meetings_07
Discussions and debates to watch for:
Global Monitoring Report 2007: Confronting the Challenges of Gender and Fragile States. The discussion on gender is undoubtedly welcome, but concerns remain about the World Banks ability to translate real rhetoric into action on the ground. A focus on fragile states is also timely, but highly contested, given the Banks recent work on corruption and Iraq, and skepticism around Paul Wolfowitzs motives in such countries.
Africa Action Plan: The Bank will present a midterm review of the AAP to the Development Committee. The Plans endorsement of private-sector led growth and a big infrastructure agenda for Africa suggest a continued emphasis on promoting business as the path to reducing poverty. As far as the Africa Action Plan goes, its business as usual.
Clean Energy and Investment Framework: The Framework focuses on energy access and mitigation and adaptation to climate change impacts. The Bank remains conflicted in its rhetorical support for renewables on the one hand, and its continued support for fossil fuel development on the other. What emerges is an initiative focused on energy access for the rural poor in Africa, with little clarity on whether this will be done using renewable or conventional sources.
Voice and Vote: Will the IMF contemplate a meaningful or superficial change in the voice and vote of its member governments? Early indications suggest the latter. The Bank has recently made noise about its plans to follow in the Funds footsteps.
Aid Architecture: An overview of the Main Trends in Official Development Assistance Flows: This Development Committee background report describes the rapidly changing landscape of aid flows, and the emergence of a wide range of new donors, including China, the Bank of the South and the Gates Foundation. The implications of these changes are sure to take center stage in the discussions around IDA replenishment.
Strengthening World Bank Group Engagement on Governance and Anticorruption (GAC): The controversial strategy was approved earlier this spring. Many continue to question whether the Bank has focused enough energy on its own operations, and whether the continued use of existing mechanisms and approaches will provide a new solution to a longstanding problem. The devil will be in the details, as implementation of the strategy begins…
DRC forestry sector: A damning new Greenpeace report reveals that the Democratic Republic of Congos rainforest is under threat, and that Bank efforts to control the countrys logging industry are failing. Civil society groups will hold a press conference on Friday morning to discuss the management of the countrys natural resources and the role of the World Bank.
Civil society calls to end harmful conditionality and financing for fossil fuels: Civil society activists will join Danny Glover at a Friday press conference to call out the institution for some of its highly controversial policies in these areas.
Wolfowitzs girlfriend: How much will recent press over controversial promotions Wolfowitzs girlfriend Shaha Ali Riza received shortly after his joining the institution in 2005 affect his credibility? Will this drama overshadow more substantive discussions taking place this week?
4. Spotlight: The Evolution of the World Banks Governance and Anti-Corruption Agenda: From Prohibition to Prominence
By Linda Cornett, Visiting Fellow, Bank Information Center
In recent years, the World Bank has led the international donor community in promoting governance and anti-corruption as a central component of its development strategy. In important respects this represents a dramatic and welcome shift in the Banks priorities. The international communitys willful avoidance of governance issues for the previous half-century of development lending undermined aid effectiveness, at best, and, at worst, supported authoritarian regimes which impoverished their countries and repressed their citizens. The end of the Cold War created the opportunity for the international community to finally address governance and anti-corruption. The long and disappointing empirical record of weak aid effectiveness in the absence of capable and accountable institutions provided the incentive. However, the Banks past record on governance and anti-corruption has badly damaged its credibility in the area; its empirical record in governance and anti-corruption over the last five years has been disappointing; and the goals and methods identified in its current strategy present few opportunities for improvement.
The mismatch between the rhetoric and reality in the Banks governance and anti-corruption strategy is striking. The Bank explicitly recognizes the distinction between governance and anti-corruption and acknowledges that fighting corruption is only the minimal condition for good governance. Moreover, the Bank recognizes the importance of strengthening the demand side of good governance and anti-corruption (through proactive civil society engagement) at the same time that it strengthens the supply side (by improving government capacity and accountability). However, operationally, if not rhetorically, the Banks strategy conflates governance with anti-corruption and relies almost exclusively on public administration reforms to limit the opportunities for corruption by limiting discretion in the policy-making process.
A technocratic approach to governance and anti-corruption strategy which seeks to narrow the opportunities for corruption through administrative reforms while leaving untouched the inequalities of power, resources, and access that preserve opportunities for state capture and reproduce political exclusion will further undermine public confidence in public institutions and the Bank itself, as well as produce disappointing results.
Read the article on BIC’s website: /en/Article.3244.aspx
5. Wolfowitz Watch: All’s fair in love and war?
Apparently yes, if youre Paul Wolfowitz. The embattled World Bank President has come under new fire for the inappropriate salary adjustments his girlfriend Shaha Ali Riza received shortly after his assuming leadership of the institution in 2006. Ms. Riza reportedly made almost $200,000 working for Dick Cheneys daughter at the State Department more than Condolezza Rice.
Riza was transferred to the State Department in September 2005 to avoid a conflict of interest with her then-boyfriend Paul Wolfowitz. The concerning details: she was promoted to the level of GH in blatant violation of relevant procedures; her promotion was nearly double that acceptable under World Bank Staff Rules; and she has received annual salary increases of approximately double what would be appropriate.
The Banks Staff Association has called on management to explain why the rules were bent in Rizas case. This case sends the message to staff that the rules apply to everyone except those associated with the most senior levels of management. It also sends the message to managers that they may flout the Staff Rules with impunity, Staff Association Chair Allison Cave remarked.
Wolfowitz has responded that he acted in consultation with the Boards Ethics Committee, and that he will cooperate with investigation into Rizas sudden rise up the professional ladder. Riza has reportedly left her position with the State Department to work for the Foundation for the Future. Reports have also surfaced that Wolfowitz and Riza have in fact recently ended their relationship.
World Bank staff and the public are rightly concerned about managements apparently subjective application of internal procedures, which in turn signal greater problems with staff trust and morale within the institution. This is particularly ironic given the upcoming discussions over governance at the World Bank and IMF during the institutions Spring Meetings, set to commence this coming weekend.
Some comments posted anonymously by World Bank staff regarding the situation:
- I fully support the idea of coordinating a quite [sic] and peaceful walk out this week after lunch as a way to show that the staff are demanding that the Board of governors and executive directors hold those responsible for this accountable
- Maybe Wolfowitz wouldnt have so many holes in his socks if he stopped shooting himself in the foot
- If [Ana] Palacio really did ask the Board to side with management, then she should resignan absolutely egregious trampling of an issue that warrants an investigation not a cover-up
- It is particularly discouraging to hear this news when staff in MNA [Middle East/North Africa division of World Bank where Shaha Riza worked] have had minuscule increases over the past years and been told by management that there would be no promotions (over the last 2 years) due to lack of funds.
Find out more: Read World Bank Staff Association and Paul Wolfowitz memos on the matter, as well as World Bank staff comments posted on the institution’s internal websites, on BIC’s Wolfowitz Watch webpage.
6. Inside the institutions: New US representatives at the IMF, World Bank and ADB
The nominee to serve as U.S. Executive Director at the International Monetary Fund (IMF) was sworn in by the Senate last week as two other appointees await confirmation to take their posts at the World Bank and Asian Development Bank (ADB).
Meg Lundsager, new ED at the IMF, has been serving as the Alternate U.S. Executive Director at the institution and previously held the position of Deputy Assistant Secretary for International Trade and Investment Policy at the Department of the Treasury where she directed U.S. Treasury efforts to develop USG positions on trade and investment matters across the range of multilateral and bilateral initiatives and issues. Ms. Lundsager also served as a Director on the National Security Council staff from 1990-1991 and as an assistant to the U.S. Executive Director at the IMF in the 1980s.
Eli Whitney Debevoise II will transition from his career as an international trade lawyer with experience as an ICSID arbitrator to serve as the U.S. Executive Director at the World Bank. Mr. Debevoise has experience in transactions involving sovereigns, multilateral financial institutions and export credit agencies in addition to working on trade liberalization processes at the World Trade Organization (WTO).
Finally, Curtis Chin, Managing Director of Burson-Marsteller, a large PR firm based in Washington, D.C., will take up the post of U.S. Executive Director at the Asian Development Bank (ADB). Mr. Chin is a senior executive and public affairs & policy specialist with experience working with corporations, not-for-profit organizations and the public sector in the Asia-Pacific region on economic & trade issues. During the Administration of President George W. Bush, Mr. Chin served on the U.S. Department of States Advisory Committee on Cultural Diplomacy, under both U.S. Secretary of State Collin L. Powell and U.S. Secretary of State Condoleezza Rice.
What is an Executive Director?
As the United States voice at their respective institutions, the U.S. ED for each multilateral development bank (MDB) is advised by staff from the U.S. Department of Treasury, Commerce, U.S. Agency for International Development (USAID), Environmental Protection Agency, State Department, and occasionally other federal agencies.
Executive Directors evaluate and approve or oppose loan and guarantee proposals and credit, grant and guarantee proposals made by the President, and they decide on policies that guide the Bank’s general operations. EDs attend regular Board meetings which occur at least twice a week and serve on at least one of the standing committees at their institution. These committees are fairly similar across organizations and generally include a Budget Committee, a Committee on Development Effectiveness, a Personnel Committee, an Audit Committee and a Committee on Executive Directors Administrative Matters.
7. Announcements and Resources
Revenue Watch Institute courses on governance of revenues from oil, gas and mining
The Revenue Watch Institute is supporting two different courses this summer at the Central European University, Budapest, Hungary. Financial support may be available for both courses. Course 1 – Technical training: Governance of oil, gas and mining revenues – 25-29 June 2007. Deadline for application – April 22nd 2007. Course 2 – Integrity reform and strategic corruption control – 2-11 July 2007. Deadlines in mid-late April. Find out more: http://www.revenuewatch.org/index.shtml
European NGOs critize governments for inflating aid figures
Over 1600 European NGOs united under Concord, the European NGO Confederation for Relief and Development criticised European governments for seriously inflating their aid figures for a second year in a row. They revealed that close to one third of EU development assistance in 2006 did not deliver any fresh resources for poor countries. CONCORD Press release: http://www.eurodad.org/articles/default.aspx?id=775
Rodrik: Cheerleaders a threat to world trade
In the March 26 Financial Times, Dani Rodrik argues that those who are pushing for increased market liberalization are the ones truly damaging the poor and developing nations. The level of market openness in the international economy is currently not prohibiting the growth of any nation, evidenced by the successes of China, Vietnam, and India. Rodrik states that the greatest threat to a healthy global economy is the inability of governments to react to their citizens demands. Governments need the freedom to choose their own economic system and welfare state. This freedom is often at odds with World Bank, IMF, and WTO polices. Countries find themselves forced to choose between loans and having the ability to develop their own economic policies. Rodrik emphasizes that poor nations need policy space allowing them to diversify and restructure their economies.
G8 2007 There are alternatives!
Support the international G8 alternative summit in Rostock, June 5-7, 2007. In 2007 the summit of the eight richest and most powerful states in the world will take place in Heiligendamm near the City of Rostock on the Baltic coast of Germany. The politics of the G8 have triggered criticism and worldwide protest for a long time. Anyone who is searching for alternatives to globalisation in its current form is invited. Interested organisations, networks, and individuals may register for holding workshops during the Alternative Summit. More information: http://www.worldbank.org/afr/findings/english/find273.htm
Measuring Corruption: Myths and Realities
New World Bank publication by Daniel Kaufman.
8. New at BIC!
Dear friends and colleagues,
Greetings. With great appreciation for his commitment, vision and leadership, I am writing to inform you that Manish Bapna has decided to step down after four years as Executive Director of BIC. We are deeply grateful for his contributions to our organization, and to environmental, social and economic justice. After his many years of work on World Bank reform, Manish will continue to promote a progressive environmental and sustainability agenda in his new role as Managing Director of the World Resources Institute. As he put it: This has been quite a difficult decision in no small part because of the passion and commitment of my colleagues here at BIC and of all of you who have made this experience so productive and rewarding.
BIC has achieved a great deal during Manishs skilled and balanced leadership. During his tenure BIC has contributed to a number of notable victories in helping to protect the rights of local communities and to promote equity and sustainability in IFI projects and policies. In addition, BIC has significantly deepened its regional work. This increased presence abroad has strengthened BICs engagement with and support for local movements and civil society partners. BIC is also working more consciously and concretely in key sectors such as energy and infrastructure and on the role of the private sector — building on its historical expertise in transparency, accountability and rights. Finally, the Board recognizes and very much appreciates that Manish is leaving BIC in a secure position, politically, institutionally and financially.
On a personal note, as some of you may know, Manish and Geeta are expecting their first child in late May. Manish has agreed to remain as Executive Director of BIC until the baby arrives.
The Board is moving swiftly with the search process and hopes to have Manishs successor in place by late summer 2007. In the interim, we have asked Bruce Jenkins, BICs Policy Director, to serve as Acting Executive Director which is what we had originally planned given that Manish would have been on parental leave during much of this time.
The Board has also established a search committee to take the lead in identifying someone who can take the organization to the next level of growth and impact. A job description will be circulated shortly and we invite all of you to help us identify suitable candidates with the passion, experience and stature for this important position someone with a proven record of leadership in social change organizations and who can help bring a well-developed sense of vision and strategy.
As this transition proceeds, we look forward to working with you toward our common goal of promoting transparency and accountability in the operations and governance of powerful global financial institutions.
With regards,
Jonathan Fox
Chair, Board of Directors
Bank Information Center
Email – jtaylor@bicusa.org