Wolfowitz trying to end corruption through the world bank...
A very positive look at how Paul Wolfowitz is doing good things at the World Bank.
In a series of tough decisions, some of which have been widely reported and some of which have not, Wolfowitz has challenged this culture.
The bank has held up $800 million in lending to Indian health projects. This is a vast sum, and India is one of the bank's most formidable clients: It borrows a lot, has a good economic record and tells development organizations to get lost if they behave condescendingly. But Indian politicians were said to have their hands on the health funds, so Wolfowitz blocked the loans anyway.
The bank has frozen lending to Chad, whose government had reneged on a promise to spend its oil revenue on poverty reduction. Although Chad is a small country, the frozen loans were high-profile: They were an attempt to defy the "curse of oil" and make petrodollars serve development. It took some courage to admit that the curse of oil remained unbroken.
The bank has canceled 14 road contracts in Bangladesh because of corrupt bidding. Two government officials have since been fired, and Wolfowitz plans to ban the private firms involved from future World Bank contracts.
The bank has frozen five loans to Kenya because of corruption, though it did go ahead with a project to improve Kenya's financial management. On a recent stopover in London, Wolfowitz made a point of having dinner with John Githongo, a senior Kenyan official who left the country after issuing a report exposing cabinet ministers' corruption.
The bank has interrupted a project in Argentina that topped up the wages of poor workers. Some of the money seems to have greased the ruling Peronist Party's electoral machine before elections in 2003, and the government has brought charges against one senior official and fired 10 others. The bank's Argentina team responded by building in a few corruption safeguards and pressing to resume lending. But Wolfowitz has demanded that the safeguards be expanded further still. The project has yet to be reauthorized.
Finally, the bank has postponed debt relief for Congo. A team from the International Monetary Fund had certified that the country deserved relief, and the bank was supposed to fall in line last Thursday. But a newspaper report about the Congolese president's extravagant hotel bills was passed around by Wolfowitz's top staff, who noted that KPMG, the firm that audits Congo's state oil company, had refused for three years running to sign off on its financial statements. On Tuesday Wolfowitz called the IMF's boss and asked whether Congo really merited debt relief. On Thursday he refused to go ahead with it.