Sunday, June 03, 2007

World Bank: If you can't scrap it, shake it up

Who among us wasn't enjoying the Wolfowitz debacle at the World Bank? I'm certainly not saintly enough to resist a spot of schadenfreude. But when the scandal over Wolfo's corrupt favoritism broke, I agreed with Naomi Klein: the real scandal is the Bank itself. Still, I had no illusions that anyone would take her advice to seize this low moment for the institution and ditch it altogether.

Now along come two appealing proposals that could change the Bank's workings for the better in Wolfowitz's wake. Mark Weisbrot recommends uncoupling the World Bank from the International Monetary Fund. Congress, in concert with the Europeans, could make it a condition of continued funding for the Bank that its loans would no longer be contingent on IMF conditions or approval.

Several developments have weakened the IMF's influence over middle-income countries in the last decade, but the "creditors' cartel" that it forms with the World Bank continues to wreak havoc in the poorest countries:
the privatization of water in countries like Ghana and Tanzania, the imposition of user fees on primary healthcare and education in Kenya and other African countries, the privatization of social security systems in Latin America and Central and Eastern Europe, the destabilization and overthrow of Haiti's democratically elected government in 2004 and, most recently, the cartel's role in deciding that poor countries in sub-Saharan Africa could not spend 70 percent of the desperately needed aid money that they received from 1999 to 2005...
This reform would simply reduce the harm done. As Weisbrot says,
Realistically, so long as developing countries have no significant voice within the World Bank, it cannot be expected to pursue an agenda that benefits poor countries or poor people generally.

That's where the second proposal comes in: the candidacy of Muhammad Yunus, Nobel Prize-winning founder of the Grameen Bank, for President of the World Bank.

Robert Naiman of Just Foreign Policy makes an entertaining case for this campaign. World Bank votes are proportional to shares held, so that countries with 12% of the world's population have 57% of the votes. Looks unlikely, eh? But
just because it’s one dollar, one vote, does not mean you cannot have a food fight ... If those [other] 43% were committed to Yunus, we’d just have to split off 7% from the G7 vote to beat the Bush candidate, [Robert] Zoellick. Suppose that the UK, France, and Japan vote with the U.S., but Germany (whose development minister said the future president of the World Bank should be selected with a “maximum involvement of all shareholders, especially the developing countries,”) Canada, and Italy voted with the rest of the world. Then Yunus would win.

Objection: But the rest of the world, that 43%, will never vote as a bloc. To which the answer is: let the client states stand up and be counted.
This food fight campaign is a prospect that delights me no end, for reasons large and small. The large reasons should be obvious. The small ones have to do with Bob Zoellick, who's a neocon and a bit of a pill (an impression I got while in college with him, recently strengthened by some press reports since his nomination).



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