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Pox Americana


The world just can’t resist an infectious Wolfowitz

Wolfie: Committed to another institution.


FOLLOWING IN THE bloody footsteps of Robert McNamara nearly 30 years ago, Paul Wolfowitz has now officially moved from the Pentagon to the World Bank. Having helped jump-start the unjustified invasion of Iraq, he’s gone on to even bigger things than diverting American soldiers from the hunt for terrorists.

Robert Hunter Wade, writing in The Guardian (U.K.) places the event in the perspective of global political infighting. Forget that “unanimous” assent by the Bank’s board. Wade writes:

Privately, many, probably most, of the board members and their governments had serious doubts about his suitability.

The Europeans were particularly outraged, given Wolfowitz’s advocacy of U.S. unilateralism and his lack of contrition for the debacle in Iraq. Development NGOs reacted with dismay at the nomination, and 92 percent of World Bank staff expressed a negative response.

Here in America, the ascension has a stranger context.

We’ll be setting our clocks forward this Sunday, but Wolfowitz’s appointment moves us backward in time—all the way back to an eerily similar event in 1968.

Right in the middle of hustling hundreds of thousands of young Americans over to Vietnam, Secretary of Defense McNamara quit and scooted over to the World Bank presidency, where he hunkered down in the vault for the next 13 years. First, though, he collected a Medal of Freedom—like the one George Tenet got last December for doing such a bang-up job on those intelligence estimates.

McNamara later claimed to see through the fog of war, telling Errol Morris in 2003:

President Johnson authorized bombing in response to what he thought had been the second attack . . . We were wrong, but we had in our minds a mindset that led to that action. And it carried such heavy costs. We see incorrectly or we see only half of the story at times.

Can you see Wolfowitz ever saying anything like that? Not unless we give him the Abu Ghraib treatment. As I wrote in early December, concerning the fact that our now former DEPSECDEF wouldn’t shut up about our great prospects just before we invaded Iraq:

Geez, you don’t even have to drag Wolfowitz by his hair from a Humvee to a prison cell or strip him and wedge him into a pyramid of naked people or punish him while he prays or have him simulate masturbation or threaten him with rape or throw him into a wall or smear shit on his back or scare him with a growling dog or put a dog collar on him or ride him around like a donkey or hook up wires to his nuts while making him stand on a box or make fun of his schmeckel while you grin for the camera. The guy just keeps talking.

Being naked in a prison cell is a lot different from being transparent as an international civil servant. Wolfowitz will fit right in at the World Bank, whose executive directors resisted reforms proposed by his predecessor Jim Wolfensohn that would have opened at least some of the Bank’s secretive dealings to the public and to Third World countries.

D.C. journalist Toby McIntosh wrote about this last December 21 on

It now appears that the board has decided against a proposal to let the public see a handful of key documents at the same time that executive directors do. For example, the board seems to have rejected allowing earlier disclosure of the final staff memos about proposed projects. Nor will the board permit earlier release of other important documents, including the far-reaching Country Assistance Strategies.

Experimenting with the faster release of these documents, now issued only after the board acts, was envisioned as part of a “pilot project” in greater transparency, advocated in a June memo from the Bank management and endorsed by Wolfensohn.

Wolfowitz surely won’t support such reforms—in fact, he’ll have to have even more secrecy to divert money into Iraq schemes in the service of the neocons’ Pax Americana.

Emad Mekay‘s fascinating story in the Asia Times on March 19 pegged Iraq as “the world’s biggest cash cow” and quoted Transparency International’s Global Corruption Report 2005 as warning:

“If urgent steps are not taken, Iraq will become the biggest corruption scandal in history.”

So it makes sense to bone up now about transparency issues at the Bank. One of the best sources is the independent Bank Information Center, which keeps an eye on the big multilateral banks.

Another starting point, of course, is Transparency International, which bills itself as “the leading global non-governmental organization devoted to combating corruption.”

TI’s Global Corruption Report 2005 contains a special section examining various shenanigans in Iraq reconstruction. Here’s a snatch of the grab from the report’s “highlights”:

The credibility of the international community to play a role in curbing corruption in Iraq has been dented by the “oil-for-food” scandal, and the secrecy surrounding the allocation of lucrative contracts by the U.S. government. Contracts have been ‘bundled’ such that smaller companies cannot compete; many lucrative deals have gone to companies such as Halliburton and Bechtel with close links to individuals in government; and there have been suggestions of excessive profiting by the prime U.S. contractors who subcontract jobs to local firms at a fraction of the price they themselves are paid.

Click on this TI page to download the report, which of course prominently mentions the World Bank. Now back to the Asia Times story for morsels from the TI report:

It referred to how the Coalition Provisional Authority (CPA) and U.S. Department of Defense initially had only 80 people examining the largest reconstruction program in history, half the number needed according to the Association of Inspectors General, and eventually outsourced oversight to private companies, giving rise to potential conflicts of interest.

The report also said that many U.S. contractors in Iraq have been wasteful and taken what many would see as excessive profits, both of which can be attributed to “cost-plus” contracts. These are deals in which companies are reimbursed for all costs with an additional percentage added as guaranteed profit.

It said that U.S. rules in Iraq still allow the government to award an unspecified amount of future work to approved contractors. “This system restricts the ability of poorly connected and smaller companies from bidding for contracts,” it said.

The report also faulted the phenomenon of “contract bundling”, which joins together two or more separate procurement requirements into a super-sized contract, effectively disqualifying smaller companies because only the very largest contractors are able to compete.

I’m sure we can now count on Wolfowitz to exert the World Bank’s considerable pressure on Dick Cheney to get Halliburton in line and on his former boss Don Rumsfeld to whip the Pentagon into shape.

The Bank itself, however, is kinda shy, so we may never know all the good Wolfowitz is doing.

As freedom notes:

Near total secrecy surrounds Board meetings, which are held regularly. The meetings are not open to the public or the press. Transcripts of the meetings are kept, but are available in the Board Resource Center only to senior Bank officials. Nor are minutes available to the public, and access to them within the Bank is closely controlled.

Maybe an outbreak of anger would help the peoples of the world penetrate the Bank’s secretive deal-making. To hear former World Bank economist Joe Stiglitz tell it, that rage could erupt. Stiglitz made this prediction on March 20 to England’s Channel 4, as reported by The Telegraph (U.K), concerning Wolfowitz’s ascension to the throne:

“The World Bank will once again become a hate figure. This could bring street protests and violence across the developing world.”

The Telegraph story continued:

In an interview with Liam Halligan, the economics correspondent of Channel 4 news, Stiglitz said he was concerned that the Bank would “become an explicit instrument of U.S. foreign policy.” He added: “It will presumably take a lead role in Iraqi reconstruction, for instance. That would jeopardize its role as a multilateral development body.”

This is Stiglitz’s first public utterance since last week’s nomination. When he was the World Bank’s chief economist—under the current president James Wolfensohn, whose decade-long tenure ends in June—he played a major role in rebuilding its battered reputation.

Stiglitz’s quarrel is not just a matter of style and rep but also one of Wolfowitz’s lack of substance as a development person:

Stiglitz said Wolfowitz was unsuitable in part because the U.S. war in Iraq remains profoundly unpopular in many of the territories where the World Bank works. But he also complained that Wolfowitz has the wrong skills.

“He has no training or experience in economic development or financial markets,” Stiglitz said. The Bank was the most important institution addressing poverty, he said. “We need someone in charge who knows. . . development.”

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