The Wolfensohn Era at the World Bank

A Decade of Contradictions

Linked with Antonio “Toni” Negri – Italy.

Published on nakedpunch.com, by Walden Bello and Shalmali Guttal, not dated, 15 pages.

… (page 13/15): The Years in the Wilderness:

By 2001, with the advent of a right-wing administration at the White House, the liberal Wolfensohn’s future turned uncertain. Partisans of his nemesis Meltzer had become his bosses.

He spent his last four years in office steadily acquiescing to the Bush administration’s “bilateralization” of the World Bank program to support its wars of aggression in Afghanistan and Iraq. In Afghanistan, aside from pledging $570 million and fronting the US effort to raise billions of dollars for reconstruction, Wolfensohn expressed interest in the Bank’s participation in financing a fuel pipeline to channel massive gas reserves through Afghanistan from landlocked Turkmenistan to India or Pakistan, a project greatly desired by US energy corporations backed by US Vice President Richard Cheney.

In Iraq, Wolfensohn, prodded by Washington, committed $3-5 billion for reconstruction and agreed to manage the Iraq Trust Fund to channel money to development projects undertaken by the occupying regime, especially those aimed at “capacity building” in the private sector, a priority aim of the Bush administration.

But Wolfensohn could not prevent the erosion of his authority and prestige.

Distrusted by the White House as a Clinton holdover, he was also regarded by developing country governments as a lame duck whose reformist rhetoric no longer conformed to the unilateralist thrust of US government policy.

Who did he represent, many asked?

Then came a kind of redemption in the form of the scandal that was the Wolfowitz appointment. In a very real sense, James Wolfensohn’s reputation was salvaged by George Bush: so rampant is the fear of Bush’s appointee that the departing Wolfensohn, now being viewed through rose tinted glasses, is in the process of being canonized as a patron of development.

What can we learn from the Wolfensohn era in the World Bank? At several moments during his presidency, Wolfensohn had in his hands opportunities to at least slow down the Bank’s destructive trajectory, even if not turn it around. He had the (albeit cautious) commitment of the Bank’s fiercest critics to objectively review Bank policies, programmes and projects in a bid to halt its worst excesses. But Wolfensohn converted what could have been a potential victory for the Bank into unmitigated defeat. The Bank now stands  discredited not only for not meeting its own stated goal of “creating a world free of poverty,” but also for its inability and unwillingness to keep its word and meet the commitments it made publicly through its various “multistakeholder dialogues.” Now even more than before, the World Bank is associated with double-speak, dithering and duplicity.

Arguably, the most important lesson to be learned from the Wolfensohn decade is that the World Bank is much too large and politically motivated an institution, and is too central in the structure of US-led global capitalism to be changed by a single individual, even one as charismatic and shrewd as James Wolfensohn. In the last instance, the Bank serves as an extension of US corporate and strategic interests. Wolfensohn could only modify its performance at the margins. Now even that slight room for maneuver to initiate cosmetic reform is being eliminated as Paul Wolfowitz, whose name is synonymous with unilateralism, steps in as Bank president. (full 15-pages text).

Comments are closed.