Fri, Feb 04, 2005 - Page 9 News List

George W. Bush will determine the relevance of the World Bank

The US can end the stitch-ups and win some Third World kudos if the next head of the World Bank is chosen on merit, but the signs so far are not encouraging

By Richard Adams  /  THE GUARDIAN , LONDON

If the US really wants, in Secretary of State Condoleezza Rice's phrase, "a conversation, not a monologue," with the rest of the world, it is time to start talking. But simply not invading any more countries isn't enough; something more positive is needed.

As luck has it, the US has an issue sitting in its lap that would instantly make it friends around the world. In May, James Wolfensohn steps down as president of the World Bank, the wealthy world's premier multinational development agency. The US, as the bank's largest shareholder and deepest pockets, gets to appoint the new president.

Here's the big idea. Instead of filling the job from a list of insiders, cronies and yes-persons drawn up in the West Wing, the Bush administration could do something entirely radical: make the appointment on merit. Failing that, it could at least introduce some transparency into proceedings, and entertain the extraordinary idea that a non-US citizen could be qualified for the job.

Why this is important is that the World Bank has been transformed in recent years into a hyperactive international aid provider, filling a role that is far too big or important for even the largest non-governmental organizations such as the Red Cross or Red Crescent.

The bank's rapid reconstruction work in Bosnia following the Dayton peace accord showed its ability to harness international relief efforts, as did its late but eventually effective enrollment in the battle against HIV/AIDS, and its concentration on the wretched state of sub-Saharan Africa. For all its faults -- and it certainly has many -- the bank is the best tool to influence development for the world's poor.

Yet it is a bank in name only. It relies on just US$20 billion of financing a year. Chastened by its unsuccessful record in the 1980s, the bank now holds regular dialogues with NGOs and grassroots organizations. Last week alone it fast-tracked US$25 million to Rwanda for urgent electricity supplies to rehabilitate the country's power grid and shift it away from using ecologically damaging charcoal for fuel. That is why the right choice of president is vital -- but also why the method of making that choice is crucial.

In recent years the bank has spent much time lecturing its aid recipients on the need for good governance. An avalanche of research has found that development is powerless to effect change in places where society has been distorted by corruption.

The drumbeat behind international aid has constantly rapped out calls for openness and accountability. Yet at its heart, the appointment to the top job in the world's leading development agency is as open and accountable as the bad old days of the Suharto regime in Indonesia.

The current situation is the result of an unhealthy carve-up, between the Europeans -- mainly, the French, Germans and British -- who get to choose the head of the IMF, and the US, which gets to name the bank president in a quid pro quo. Some argue that this actually works in the bank's favor. Because the US is the bank's largest shareholder, with 20 percent of its funds, and biggest potential contributor, it needs to be kept happy.

The World Bank, they argue, is not supposed to be a democratic institution. Instead, the bank is designed to cajole a small group of rich countries into funding projects for a large group of poor countries. By protesting against the US's droit du seigneur, developing nations may provoke a backlash by the neocons and backwoodsmen of Congress. The World Bank could find itself in the same bind as the UN: derided on Capitol Hill and starved of extra US funds.

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