Blair must oppose Wolfowitz

Blair must oppose Wolfowitz

Noreena Hertz
Guardian News Service
London

This is the year Africa will be saved, and we're going to do
it -- that, more or less, was Tony Blair's message at the launch
last week of the report of the Commission for Africa. But not
with Paul Wolfowitz in charge of at the World Bank, we won't.

Key recommendations -- for example, that corrupt dictators'
cash in foreign bank accounts should be repatriated and that
forcing policies such as privatisation on countries in exchange
for debt relief and aid needs to be rethought -- are highly
unlikely to be endorsed by Wolfowitz.

This, after all, is a man who, while U.S. ambassador to
Indonesia, was scarcely a vocal critic of the blatantly corrupt
Soeharto regime; a man who embodies the mindset that compels
other countries to adopt a particular set of values and policies,
whether they are right or not.

Wolfowitz is hardly even a champion of the values on which the
bank itself was founded. He is neither well placed to help it
meet its early goal of helping countries rebuild, nor its later
one of poverty alleviation. Wolfowitz recently told the U.S.
congress that war-ravaged Iraq should pay not only for its
reconstruction but also for the war itself out of its oil
revenues.

Although the bank today is hardly a collaborative or
progressive operation, any moves its current president, James
Wolfensohn, has made to include environmental considerations in
lending decisions and to broaden the range of nations consulted
are unlikely to be continued under Wolfowitz, who has a track
record of rewarding subservience. He banned countries that
opposed the war with Iraq from bidding for reconstruction
contracts.

Perhaps most worryingly he is George Bush's chosen one. And
the Bush administration is a very long way from the bank's
espoused goals and mandate. Development thinkers are now pretty
much unanimous that trade subsidies are a serious barrier to
development. Wolfensohn has spoken out against trade subsidies.
But the Bush administration continues to reject calls to remove
subsidies on its cotton and sugar producers, while its response
to the recent World Trade Organisation ruling that U.S. cotton
subsidies breached its trade rules has been an attempt to
negotiate a way out of the ruling with Mali and Brazil.

There could hardly be a less suitable administration to choose
a candidate to lead an organisation whose mission is to alleviate
poverty. At home Bush has implemented a series of tax cuts for
the rich and his latest proposal to reduce the U.S. deficit has
been to suggest the slashing of food aid to his country's
poorest.

Of course, the U.S. hijacking the World Bank to serve its
foreign policy interests is not a new phenomenon. But the Bush
administration is unabashedly forthright in its pursuit of self-
interest, and in its willingness to use aid as a tool to promote
its geo-political goals.

Bush has said that he nominated Wolfowitz because he had
proved himself adept at promoting U.S. interests while ambassador
to Indonesia. But the nomination of the World Bank president is
being left to a government that has cut off aid to any country
that does not exempt it from being held to account by the
international criminal court and that has resisted attempts by
Wolfensohn to weaken the U.S. stranglehold over the bank.

It is only a matter of convention that America gets to
nominate the president of the World Bank. The U.S. has twice
successfully rejected Germany's candidate to head the IMF,
despite the convention that allows Europe to nominate its head.

A rejection of the presumption that the U.S. nominates the
bank president would chime well with today's climate of demands
for more democracy and transparency in the development arena. It
is also something that fits with the Labour government's position
on necessary reforms of the international financial institutions.

The UK foreign secretary Jack Straw said of Wolfowitz's
nomination: "If his appointment is confirmed, we look forward to
working with him." That is not the response the world is looking
to Britain for. If Blair is serious about making poverty history,
he will have to do away with such diplomatic niceties for once. A
U-turn on Blair's wider support for Bush unfortunately remains a
pipe dream. But Blair credibly can, and should, oppose the Wolf.

The writer is the author of IOU: The Debt Threat and Why We
Must Defuse It, and professor of global political economy at the
University of Utrecht, the Netherlands.