Paul Wolfowitz NEW PRESIDENT OF THE WORLD BANK Eric Toussaint, President of CADTM (Committee for the Abolition of Third World Debt) looks beyond the question of who presides over the World Bank, and asks what is the role of the World Bank?' Sank's mission is not to reduce poveri in developing countries. Its mission, defined by the victors of WWII - notably the US and Britain - was to assist in the reconstruction of Europe and, additionally, to facilitate growth in developing nations, many of which were still European colonies. It is this second mission that is referred to as 'development' and which has taken on greater importance over the years. During the first twenty years of its existence, more than 90 per cent of the projects the World Bank funded were designed to improve communications infrastructure and facilitate the production of electricity. The money lent to developing nations went towards their purchase of goods and technologies from industrialized countries. In short, what they needed to realize projects that allowed for an increase in exports from the South to the North. During this period, projects for education, health, access to clean drinking water and purification of sewer water received less than 5 per cent of loan money. From its inception, the World Bank was a tool for American and Allied foreign policy. Countries that opposed their strategic interests were systematically refused loans from the World Bank and the IMF: Guatemala under Arbenz in 1954, Egypt under Nasser in 1955 and 1956, Indonesia under Sukharno from 1962- 65, etc. Conversely, countries they considered allies received generous loans: the Congo under Mobutu, South Africa under Apartheid, Suharto's Indonesia from 1965 to 1998, Pinochet's Chile, the Philippines under Marcos. 14 WHAT WILL CHANGE? In addition, the World Bank gave loans to countries the US and its allies wanted to remove or distance from Soviet influence India, Tito's Yugoslavia, such as Ceaucesco's Romania, for example. The myth of fighting poverty became a central theme under Robert McNamara's presidency (1968-1981) in order to combat left-wing radicalization in the Third World. McNamara made it clear to US allies in the South that in order to avoid being toppled by popular rebellions they would have to implement some social programs. What is the World Bank's track record? From the perspective at ine most orations, and multinational corporations, nations on balance, the results have been positive. In collaboration with the IMF, the World Bank expanded its area of operations, from 44 to 184 member nations, and helped spread neo- liberal policies. Together, the IMF and World Bank managed the debt crisis by setting up a permanent transfer of wealth from the South to lenders from the North and by increasing the dependence of debtor nations. From a different perspective, however, the track record is negative: far from reducing or eradicating poverty, the policies recommended by the World Bank and IMF increased it. As it is said in the social movement in Bangladesh, when the World Bank says poverty reduction strategy', it really means "poverty reproduction strategy." Who is Wolfowitz? 73): he was Dean at Johns Hopkir University in 1981 and holds a PhD in political science from the University of Chicago. He is one of the main neo-conservative ideologues. He also has experience in international politics: as Director of the Asian section of the State Department under Reagan from 1982 to 1986, as US Ambassador to Indonesia from 1986 to 1989, as Strategy Director for Defence Secretary Dick Cheney in Papa Bush's administration (first Gulf War). After Clinton's two terms, as under-Secretary of Defence, he assisted Donald Rumsfeld in waging war against Afghanistan and Iraq. Contrary to his claims, Wolfowitz did support the military dictatorships of Marcos in the Philippines, of Chun Doo Hwan in South Korea and of Suharto in Indonesia. In the early 1980s he attempted to help Marcos hedge his bets by convincing him to enact certain democratic reforms. At that time in the Philippines, the combination of a strong revolutionary guerilla opposition and an anti-dictatorship bourgeois opposition threatened to lead to another defeat of the US like Somoza's overthrow in Nicaragua in 1979, when the Sandinistas joined forces with the bourgeois opposition. Marcos left the Philippines - not because of Wolfowitz, but because of a popular mobilization that chased him out of office in 1986- In the case of South Korea, Wolfowitz claims he succeeded in convincing dictator Chun Doo Hwan (responsible for the massacre of at
least 200 people during the 1980 rebellion) to retire at the end of his term in 1986. In reality, it was the millions of students, workers and citizens who forced him to leave office through mass mobilizations. Indonesia where the anti-dictatorship In mobilizations were much weaker (understandably, since Suharto had taken power in 1965 by massacring 500,000 civilians), the US supported the dictator until early in 1998. Wolfowitz was still declaring to Congress in May 1997 that 'any balanced judgment of the situation in Indonesia today, including the very important and sensitive issue of human rights, needs to take account of the significant progress that Indonesia has already made and needs to acknowledge that much of this progress has to be credited to the strong and remarkable leadership of President Suharto? Wolfowitz's recent past is well known: he is one of the architects of the 'pre-emptive' war strategy used in Afghanistan and Iraq beginning in October 2001. If the American army was not bogged down in the quagmire in Iraq, it is possible that other countries would have already fallen victim to this strategy. Moreover, the way in which Rumsfeld and Wolfowitz use the occupation and 'reconstruction' of Iraq to benefit American multinational provides corporations a glimpse of the 'conditions' Wolfowitz might attach to aid distribution as head of the World Bank. According to the Secretary of Defence, the war was supposed to cost $30 billion; it has already cost $200 billion. If one of the qualifications for leading the World Bank were good financial planning, Wolfowitz would not be in the running. Why did Bush choose Paul Wolfowitz as head of the World Bank? • ush is showing both the international community and his partisans that be has the will and the ability to increase the US's direct leadership over multilateral institutions. This is true for the World Bank as well as the UN, where it will be more difficult. Bush could have reappointed Wolfensohn to head the World Bank for a third term. After all, Wolfensohn stated to I've had the impression from the press, the administration that they are perfectly pleased with what has happened here in recent years.* It was not Wolfensohn's appointment by a Democratic administration that stopped Bush from doing so. Bush wants an American foreign policy strategy that is purely a product of the state apparatus While maintaining an excellent relationship with the neo-conservative intelligentsia and business milieus. In someways, Wolfowitz'snominationresembles that of McNamara. In 1968, as Secretary of Defence, he had relinquished his post as leader of the war in Vietnam when events took a turn for the worse for US forces; Wolfowitz stepped down from his post in the midst of the failure of the war in Iraq. Like McNamara, Wolfowitz has experience running a large administration: the Pentagon. Like McNamara, Wolfowitz was foreign policy advisor to the president of the United States. In all probability, Wolfowitz, like McNamara and without breaking with Wolfensohn's policies, will continue the myth of the war against poverty. He may even go so far as to cancel some multilateral debts for pet clients of the World Bank, especially in sub-Saharan Africa. Such a policy would be in the interests of the US and multinational corporations, given sub-Saharan Africa's role in providing oil to the US. Like McNamara, Wolfowitz will use a carrot and a stick. The appointment of Wolfowitz should be seen alongside the Bush administration's nomination of John Bolton as American ambassador to the United Nations. John Bolton, well known for his attacks on the UN, was president of the American Enterprise Institute from 1997 to 2001. He attempted to get Mohamed El Baradei fired as head of the UN institution charged with overseeing the disarmament of Iraq immediately before the war in 2003. It was Bolton who oversaw the US's refusal to ratify the International Criminal Court and who withdrew from the UN conference on racism in Durban in August 2001. John Bolton has told the US Congress: Now more than ever the United Nations needs American leadership." If Bush had appointed Wolfensohn for a third term, would things have changed fundamentally? Wolfensohn, o. Wolfowitz, supported Suharto until the very end. His policies were fundamentally in line with US interests. Immediately after the invasion of Iraq, he hesitated to involve the World Bank in Iraq and, under his presidency, although the World Bank did give loans to Iran, it did not diverge significantly from US policy. The only difference could be whether or not to pursue the policy of dialogue with NGOs and civil society practiced by Wolfensohn. Abandoning this dialogue would not change much given that the World Bank does not take these opinions into account. Wolfowitz will certainly delegate this public relations role to World Bank personnel. The Bank has everything to gain in seeing its actions legitimized by civil society. So nothing will change? 'nings will get worse. Wolfowitz will mak • sure that the actions of the World Ban remain even more tightly tied to US interests. He will increase World Bank pressure on the governments of debtor nations so that they privatize strategic sectors that have not yet been privatized. I am thinking, for example, of public oil companies like Pemex in Mexico, Petrobas in Basil and PDVSA in Venezuela. 1. Eric Toussaint is author of Your Money or your Life. The Tyranny of Global Finance, Haymarket. Chicago, 2005; and co-author, with Damien Millet of The Debt Scam, VAK Publication. Mumbai, 2003 and of Who Owes Who? 50 Questions about World Debt, Zed Books. Lon- don, 2004. See website: www.cadtm.org 2. See Walden Bello. US Sponsored Low Intensity Con- flict in the Philippines, San Francisco, Institute for Food Policy and Development, 1987 3. Tim Shorrock, 'Paul Wolfowitz, Reagan's Man in In- donesia, Is Back at the Pentagon'. in Foreign Policy in Focus, February 2001. p3 4. James Wolfensohn, Press conference, April 12. 2005. Washington 5. Financial Times, April 12. 2005 15