World Bank’s plan for post-conflict states discussed in Liberia

In the second leg of his week-long African tour, World Bank President Robert Zoellick flew to Liberia to meet with officials from the Liberian government, international development agencies and the private sector to search solutions to help rebuild the country.

The Bank president said it was imperative to bring in the private sector to help create jobs and rebuild the country’s infrastructure.

From Reuters:

…Zoellick met donors and U.N. officials to discuss how to fund Liberia's infrastructure needs, which the government puts at $700-800 million, mostly for roads. The Bank oversees a Liberia infrastructure trust fund which already has $90 million.

Liberia has struggled to attract private companies to build roads, mostly due to high costs importing equipment. Chinese firms have expressed interest but want to be sure they can get contracts if they spend the money bringing in the equipment.

Zoellick said post-conflict governments faced a shortage of skill-led workers, with many professionals having left the country and living abroad. The challenge was to either quickly train new professionals or compensate and attract back those who had left.

During his two-day trip Zoellick also meet with finance ministers of four other West African post-conflict countries – Guinea, Sierra Leone, Cote d’Ivoire, Togo and Liberia – to seek advice how to provide financial support to speed the recovery of these states. Other than providing monetary aid in a timely manner, I could not find any other concrete suggestions solicited from the group. More later, I hope.

Mauritania squeezes money, promises out of World Bank

World Bank President Robert Zoellick traveled to Mauritania for a two-day visit with President Sidi Mohamed Ould Cheikh Abdallahi.

From Reuters:

In a signal of support aimed at donors and private investors, Zoellick signed a memorandum of understanding with the Mauritanian government on the development of the country's mineral resources and still-growing oil sector, the expansion of Nouakchott port and exploitation of natural gas for electricity.

Zoellick’s week-long tour will also take him to Liberia, Ethiopia to attend an African Union summit and Mozambique.

Furor(?) over resignation of World Bank's antifraud chief

In what the New York Times is painting as the continuing battle of World Bank staffers against the fallen regime of deposed Bank president Paul Wolfowitz, Suzanne Rich Folsom has resigned her post amidst much speculated acrimony and tension.

She had been chief of the bank’s antifraud unit, and Wolfowitz, her former boss, had made the battle against corruption job one at the World Bank. Like her former boss, she was supposedly prickly and “overly aggressive.” Yet it was hinted that the Bank that was merely complacent?

New bank president Robert Zoellick believes corruption should remain a high priority, but like the way these stories always pan out, he is less “divisive” and “confrontational” about pursuing the issue. One wonders whether these boxes painted for Wolfowitz and his staffers – confrontational, divisive – and the one anointed for Zoellick – pragmatic, measured – is actually true or just makes for a more interesting tale.

One reason for her departure, buried in the story’s juicy final paragraph, is that Folsom was a “onetime activist in Republican Party politics” – where members of the bank tend to be liberal – and she was seen as just another conservative flak for mean Mr. Wolfowitz. Perhaps it’s just me, but the perception of the World Bank in every story like this is of an international institution where a large majority of staffers have nothing better to do than gossip and backstab. (This from a person who loves office gossip more than most anything.) Maybe if they spent less time worrying about…

My problem with gossip-laden stories is either you give us the goods or don’t mention the issues at all. Whether it can be blamed on the mantle of objectivity or just good taste, too many reporters want to take the high road – where no high road has been tread upon – and merely mention these issues of personality conflicts in passing. I say, if people talk smack about others enough to drive them away, a newspaper is the proper forum to air that dirty laundry. It may tell us something about the institution. (See previous paragraph.) AfricaFlak rule o’ journalism number 658: Don’t beat around the bush – that gets us nowhere. If you have something to say, say it.

Nonetheless, here’s some uninteresting, but useful tidbits.

Corruption is widely described as a problem in the bank’s $30 billion annual lending programs for poor countries, but the extent is in dispute. Last September, an outside panel led by Paul A. Volcker, the former Federal Reserve chairman, found weak management, distrust and internal resistance to combating fraud at the bank.

Mr. Zoellick, according to his aides, has sought to carry out broad changes in the way Ms. Folsom’s unit interacts with other bank officials, and to install procedures on competitive bidding, inspections and disclosure that would prevent corruption instead of just prosecuting cases after the fact.

“It’s all very well to talk about corruption and to have these reports,” said Ngozi Okonjo-Iweala, a managing director at the bank and former finance minister of Nigeria, who negotiated the India agreement. “Bob Zoellick is geared toward implementation, and how we sustain this and embed it in a country.”

Ms. Okonjo-Iweala negotiated the arrangement with India to set up ways to rid programs of fraud. By contrast, Mr. Wolfowitz abruptly suspended aid to India after accusations of fraud in 2005, and that suspension angered board members and helped pave the way for his downfall, many bank officials say.

Anxiety and transition: Q & A with Robert Zoellick of the World Bank

World Bank President Robert Zoellick sat in for a round of questions from the readers of Daniel Altman’s Managing Globalization Blog in the International Herald Tribune.

Some highlights.

Q. The short term benefits of writing off the African debt having been fizzled out by ever-higher energy prices, what cards does Mr. Zoellick have on the table on capacity-building in Africa?

Richard Mufumbya
Tanzania

…The resources to help all African countries can come from local savings, international aid and private investors, both domestic and foreign.

The World Bank Group recently wrapped up the 15th replenishment of our fund for the poorest countries, the International Development Association (IDA). With a big effort and support from 45 donor countries, we have been able to mobilize $41.6 billion for the next three years (that is a record and a 30 percent increase over the previous replenishment). About half of the IDA countries are in Africa; our allocations to them are based on a formula donors have developed to blend assessments of both need and effectiveness.

In particular, the IDA 15 replenishment gives the World Bank Group more leverage to respond more quickly and more decisively to fragile situations. In addition, the International Finance Corporation (IFC), the private sector arm of the World Bank Group, is increasing its work in Africa and the poorest countries, including with innovative efforts for infrastructure, energy, agribusiness, health care, and trade finance.

Additional resources alone are not enough. We need to customize our work with each country, based on its particular needs. It is also vital that the government has “ownership” of the effort. Working with government partners, we bring expertise and help develop local capacity. For example, we want to support countries to develop capacity to expand the productivity of agriculture and food production. We can help share experience of good natural resource management. We work with countries to put in place sound debt management capacities.

In sum, Africa faces some good prospects and certainly deserves the effort and assistance of its partners around the world. Each country faces unique challenges. And too many are suffering from strife and dangers of weak governance. To help most effectively, we need to encourage the building of local capacity, solutions, responsibility and accountability.

Q. I live in a country with dire discrepancies across its territory in terms of infrastructure, access to water, energy and health care. Can you elaborate on the World Bank experience in assisting governments and leaders that you think display a blatant lack of strategy, let alone vision? And if it is the policy of the World Bank to deal only with government and not criticize them, can you say it is a viable credible institution in a networked economy?

El Aid El Othmani Nabil
Morocco

A. Nabil, this is an excellent question. It highlights both the possibilities and limits facing the World Bank Group. Under our international legal charter, the WBG works with governments and is owned by governments. Unless governments have ownership of reforms and projects supported by the Bank, they will not implement them effectively.

Yet we can also work with the private sector. The WBG’s private sector arm, the International Finance Corporation (IFC), provides equity and loan financing, as well as technical assistance to private investors in our client countries. The IFC is also working with the International Bank for Reconstruction and Development and the International Development Association (the public sector parts of the World Bank Group) to develop public private partnerships in areas ranging from infrastructure and energy to health care and microfinance.

Perhaps the best way to consider how the WBG can help is to see it as offering three complementary services: (i) providing learning and knowledge based on experience from around the globe (a “brain trust” of development experience); (ii) based on this learning, we help develop markets and support institutions so the benefits of the work will extend beyond individual projects; and (iii) providing finance to spur these activities. We customize the mix of these services according to countries’ individual situations and preferences.

We need a constructive two-way dialogue with our partners. We provide advice based on our global experience, testing and technical reviews. But we also need to listen to views from governments and citizens in client countries, so we learn their priorities, constraints and experiences.

We do speak up when we have concerns or perceive mistakes or things going wrong. Yet, to be effective, we need to try to work with countries as partners while being candid and sharing concerns, especially where we see problems of poor governance or corruption. At some point, we may need to revisit our engagement with a particular government or in some sectors of a particular country. We try, however, to consider ways to keep helping the poor and disadvantaged, or position ourselves to do so in the future, so as not to add to their sufferings.

Q. Economist and columnist Paul Krugman has recently opined that trade between rich nations has little malign effect on job displacement, but trade between rich and poor nations does result in malign effects. What do you think?

James Geiger
United States

A. My recollection of Paul Krugman’s point is somewhat different: I believe he said that reduced trade barriers (and subsidies) between developed and poor countries offer opportunities for the people of poor countries. Lots of studies and data support this finding, and many developing countries have used trade to grow and overcome poverty. Furthermore, there are rapidly increasing possibilities for mutual gains through “South-South” trade among developing countries.

In many cases, barriers to trade are designed to protect favored oligopolies and oligarchies. They increase costs for consumers and businesses seeking to compete.

I believe that openness to goods, investments, ideas and even people helps countries maintain a competitive edge, build economic strength, create opportunities and protect liberties.

You may be referring to Professor Krugman’s point that reducing trade barriers may require much better support for workers in developed countries who lose jobs, whether due to technology, trade or domestic competition. I agree that governments need to help people deal with change, anxiety and transition. This is why I’ve supported ideas to pilot “wage insurance” programs. I also think health care, pension, school and training systems need to be overhauled to help people adjust and support those who have difficulty doing so. Developing countries need to help their people adapt too.

Togo clears another hurdle: World Bank calls for donors to clear debts

From Reuters:

The World Bank will ask donors to clear debts of some $135 million owed to it by Togo after the West African state held multiparty polls in October, the Bank's representative in the former French colony said on Wednesday.

"We're quickly going to normalise relations between the World Bank and Togo. That means clearing the debts Togo owes to the Bank," James Bond, the Bank's director of operations in Togo, told reporters.

"Together with our partners in Washington we're going to find a solution, we're going to plead for Togo not to have to pay," he said.

He estimated that Togo's debts to the bank stood at $135 million and were increasing by $2 million each month.

The announcement comes weeks after the European Union restored full economic cooperation with Togo after a 14-year hiatus, citing the successful holding of parliamentary elections on October 14.

One good day the World Bank will be financially responsible for its own loans. And yes, I did notice the name of the director of operations. You infantile children.

I’m (not) shrinking: African economies at the 21st century

1975. Jaws grew into a Mega-hit. Monty Python and the Holy Grail was baptized a cult classic. With Abba, we sang this tune in our green Pacers:

When you're gone
How can I even try to go on?
When you're gone
Though I try how can I carry on?

People wore this and this.

In 1975 African economic advances were leading declining indicators. GDP was modestly rising. Incomes, too. Then the bottom fell out. Afterwards, anytime the continent saw periods of growth, monumental collapses quickly followed. Researchers wondered whether the continent faced a long-term economic rut. Or, did Africa’s politics – wars, shoddy infrastructure, poor governance – have something to do with keeping its economies comatose and people destitute?

The good news is that Africa has been on the mend for much of the past decade. According to a new report by the World Bank, 10 years of expanding economies in Africa has allowed the continent to claw its way back to economic levels last seen in …1975.

Yes, thirty years ago. The World Bank researchers found that African per capita GDP in 2005 resembles snapshots of economic indicators taken from when Gerald Ford was President of the United States. In fact, the World Bank’s report points out those similarities are uncanny between the growing Africa of today and a continent once hooked on Afro-Cuban music. “Countries that started poor, stayed poor, and those that started richer, stayed richer – with few exceptions,” World Bank researchers claim.

Between 1975 and 2005:

• At least 19 countries improved economically;
• 13 countries remained economically the same;
• 11 faced steep declines.
  

I can’t hardly wait
To understand this decade of African growth, World Bank researchers reviewed more than 1,000 indicators in fields like health, economics and private sector development. They found that between 1995 and 2005 African economies on a whole posted a 5.4 percent level of growth. Not only is Africa’s economic prowess much online with the rest of the world, but it’s the largest growth rate seen on the continent since, uh, 1975.

This finding has brought a measure of optimism surrounding Africa. "For the first time in about almost 30 years we've seen a large number of African countries that have begun to show sustained economic growth at rates that are similar to those in the rest of the developing world and actually today exceed the rate of growth in most of the advanced economies," John Page, the World Bank's chief economist for Africa, told the BBC.

Of course, not all growth is equal. The World Bank claims a country must have a sustained period of growth of at least 7 percent to pull many people out of poverty. A total of nine countries performed at this rate, including Mozambique and Rwanda. On the other hand, steep declines do happen. Gabon, Burundi, Central African Republic are just a few.

Researchers placed countries into roughly three broad groupings of economic growth. First, we have so-called Slow-Growth Economies, which include many conflict or post-conflict countries whose economies have been increasing less than 4 percent per year for the past ten years. These 17 countries include Niger and Togo and make up 36 percent Africa’s population. The World Bank terms next group the Diversified, Sustained Economies, which obtained growth at more than 4 percent per year during the past decade. These 18 countries make up some 35 percent of Africa’s population and include nations like Mali, Ghana, Burkina Faso. Finally we have the seven major oil exporters of Africa, which take care of 27.7 of the population.

Here are other highlights of the report.

• One third of Africans live in countries that have grown at more than four percent for the past ten years;
• Still, 41 percent of Africans live on less than $1 a day;
  
• Thank oil for much of Africa's success, but the economies of non-oil producing states expanded at an average of nearly six percent during the past four years;
• African nations are becoming more stratified amongst themselves: In 1975, the richest 10 percent of countries had 10.5 times of GDP per capita of the poorest. Today, it’s 18.5 times.

Fact Check: West Africa
Fact checking some of the work by the World Bank, I found that among 11 West African states, economic advances mostly lead declines. I reviewed statistics from the World Trade Organization, and found those 11 West African states posted an average 4.18 percent increase in GDP between 2000-2006. Burkina Faso, Mali and Nigeria all claimed a six percent growth rate during that time. On the other end, divided Cote d’Ivoire posted a less than one percent increase and Togo’s economy rose by 2 percent.

One of the reasons Africa is growing so solidly is the continent’s new-found reliance on world trade. Researchers at the World Bank report that Sub-Saharan African exports rose by a whopping 26 percent between 2004 and 2005. A few caveats are in order. For example, crude oil comprises at least half of the continent’s exports. Also, at least two-thirds of African countries rely on only one or two products for at least 60 percent of their exports. (Burkina Faso and Mali are two of those countries.)

Perhaps this is why the news coming from West Africa isn’t strikingly glowing or completely downbeat. Those 11 countries of the sub-region posted export expansion by an average of 4.33 percent. The big winners, however, were not the oil producing states. Land-locked and resource-poor Mali (at nine percent) and Burkina Faso (at eight percent) were the region’s biggest winners. Bad news came in from Mauritania (one percent decrease) and Cameroon (posting a one percent increase). Niger did not have enough data.

Oddly, at least to me, imports skyrocketed throughout the region. Until the turn of the new century, Sub-Saharan Africa often posted minor trade deficits. Since 2000, however, exports have pretty much outstripped imports across the continent. That is, until you take economic superpowers Nigeria and South Africa out of the equation; then, African imports far exceed exports. This trade deficit surely seems to be the case in West Africa, where imports increased 7.33 percent throughout the region.

There may be a few reasons for this. If I follow this report correctly, then people have more money to purchase things, so they do. African manufacturing still lags (more on this later), so people buy more imported goods, anything from average cheap plastic junk to cars to cell phones. If this is true, it may prove Africa’s growth is, maybe, trickling down to the lower economic sectors. The same can be said for machinery imports. Growing economies need machines and parts, forcing African businessmen to look elsewhere to keep their factories on line.

Or, the opposite may be true: This growth is not being felt at all levels of society. Getting by is becoming more difficult, and the continent must import more food because prices are too high and farmers cannot feed everybody.

The great big no
We can continue to party like it’s 1975, World Bank researchers confess, but Africa’s growth has its limits. Remember, we may now be living through the high times before the economies came crashing back down. A note of caution is in order: Certain sections of the continent have joined the globalized realm of capital flows and hedge funds, but many people in Africa live outside this realm, separated from good jobs and high wages and the accouterments – telephones and fax machine – necessary to do business. This is why when the World Bank mentions Africa’s globalization success stories, it relates the same tales: Ghanaians processing insurance claims for U.S. insurance companies; Senegalese working in French call centers; Kenyans exporting cut flowers.

Let’s get back to Africa’s infrastructure for a moment. Africa, as a whole, is in the process of updating its laws governing business (a big World Bank pet project), but basic infrastructure needs must also be addressed. In a big way. In this case, the researchers don’t mince words. In Africa, “the quality of service is low, supplies are unreliable and disruptions are frequent and unpredictable—all pushing up production costs, a critical impediment for investors.”

Their complaints continue. Reliable electricity service remains a problem; so is getting hooked up to the grid. Telephone service still lags behind everywhere. Even the cell phone revolution has limits. Access to clean water is up (dirty water is a health hazard that keeps people out of work); so is access to education (Africa needs more educated workers to perform complicated tasks), but completion rates have stagnated. Roads are improving, but they still need work.

All this must be confronted – and physical infrastructure isn’t cheap.

Agriculture is another sticking point. It’s Africa’s number one industry, but the problem here is non-irrigated crops, which you will find growing in 96 percent of fields throughout the continent. If a sensible irrigation system could somehow be developed in Africa, crop yields will increase and so will productivity. Agriculture-based economies will grow even more.

This is where I’ll insert a small quibble: This idea sounds like perfect development program – from 1975. Hauling in expensive equipment on shoddy roads to provide small relief for a few months before it starts to break down and then sits in the field and rusts. Hopefully, the pipes could be broken down and sold for roofs or sleds or something useful like that. You have to keep these economies expanding somehow.

Once more, with feeling
I’ve spent much of the day with this report, and I still don’t know how to take it. It’s definitely an interesting document. And granted, it’s provides a moment to bask in at least a cupful of optimism about the continent. (Business editors take note.)

However, we need to follow up on fundamental questions raised by this report. What, really, precipitated this type of growth? What about microeconomic issues: How much is the growth affecting individual countries? How much of this growth is trickling down to society? How much will the continent’s growing population affect this?

One last snarky note: Missing from my reading of the report was the irony that Africa’s supposed fall of 1975 may have coincided by a couple of years with the mounting debt problem, followed by intervention in African economies by the World Bank and …

Ritalin necessary for World Bank, IMF?

From: U.S. Secretary of Treasury

To: World Bank & IMF

Re: Get it in gear

U.S. Treasury Secretary Henry M. Paulson spoke Tuesday at the annual International Monetary Fund and World Bank meetings.

The quips:

To remain relevant in this changing landscape, the international financial institutions must better define their core missions, and align staff and other resources accordingly. Future credibility of the institutions also requires that governance structures evolve to reflect new global realities...

Fundamental changes to the IMF's governance structure to reflect the growing role of dynamic emerging markets in the global economy must remain a priority…On behalf of the U.S., it is time that we ask emerging markets to take on greater responsibility in the international financial system. But it is fair for them to ask for a greater share in representation in return...

Changes are also needed to put IMF finances on a sustainable footing. One part of the solution must be to reduce expenditures by re-evaluating the IMF's core mission and making difficult decisions on priorities. Hand-in-hand with this, we recognize that we need to consider longer term sources of income for the IMF over the next year...

Multilateral development banks also must adapt while continuing to focus on their core missions of economic growth and poverty reduction. On the one hand, there is the challenge of their continuing relevance in countries whose economic success means they no longer need MDB finance. On the other, the poorest countries – especially in Africa – continue to need concessional assistance that is results-oriented, performance-based and focused on each bank's comparative advantage.

The Green World Bank v. George F. Will

Last week on U.S. television, George Will claimed poor countries didn’t care about climate change. Pooh-pooh on that, said the World Bank. When it comes to global warming, the rich countries can take care of themselves, said World Bank President Robert Zoellick.

On top of that, the World Bank will help poor countries achieve access to clean energy. In a communiqué from its annual meeting, members of the Bank’s development committee stated:

Bearing in mind the scale of the challenge of addressing the causes and impacts of climate change, we called on Bank management to develop a strategic framework for Bank Group engagement, including support for developing countries’ efforts to adapt to climate change and to achieve low-carbon growth while reducing poverty.

And:

We recognized the critical importance of energy access for growth. We asked the Bank Group to increase its support for access to modern, cost-effective, clean energy, especially among the poorest and in Sub-Saharan Africa. We also called for expanded work on energy efficiency and renewable energy, and facilitation of the development and dissemination of related knowledge and technology.

According to this story, there’s at least one "rich" country who doesn’t appear too happy at the Bank’s green leanings.

Saudi Arabia's finance minister, Ibrahim al-Assaf, told the committee that his committee had reservations about any use of the bank's International Development Assistance funds for climate-change efforts.

He also urged the bank not to take steps that would pre-empt U.N. negotiations aimed toward setting up an agreement to replace the Kyoto Protocol when it expires in 2010, Reuters reported.

Don't feel too bad for Mr. Will. It’s not the first time George Will locked horns with the World Bank.

It is difficult to demonstrate that World Bank loans have produced growth, let alone as much growth as private capital would have produced. Furthermore, when the bank provides debt relief, it creates what economists call moral hazard, an incentive for perverse behavior -- particularly, improvident borrowing. The bank's transactions with nongovernmental organizations are, strictly speaking, irresponsible: To what, or whom, are NGOs, or for that matter the bank, truly accountable?

Take backs

I’d like to take back (or re-think) my comment yesterday regarding the role Africans must play in democratizing their countries, ushering in a respect for the rule of law, freedom of the press and that other good stuff. To tell you the truth, I was inspired by a comment page on the BBC where readers could write in and respond to this question: Should there be a limit to the amount of terms or years African leaders serve? By looking at the names or the addresses, most of the comments were from Africans themselves. The polling wasn’t scientific by any means, but the responses sent a clear reminder how much the West needs to consider the opinions of regular Africans in this process.

Ok, put that aside for a moment.

My new argument is that the Western/Donor/Former-Colonial nations have a role to play in this, too. It’s their money (or, their taxpayer money) that funds these countries and we should have a say in the matter. That’s not to say regular Africans shouldn’t have a say; they should, perhaps they should possess the greatest say. Also, I don’t mean to say that the West should instruct a foreign government how to run its own country. (That went out in 2003.)

Rather, donors have the right choose whether a country gets funding at all. It’s the right of the West to say no to aid – although few countries have the guts to pull out every stake and walk away from the table.

Perhaps these donor nations can take the lead from Robert Calderisi, a former World Bank guy and author of The Trouble with Africa: Why foreign aid isn’t working. In his primer on ten ways to change Africa, he says the Richie-Rich nations should “focus foreign aid on five countries that are serious about reducing poverty.”

That’s right, have the international aid community give five well-run governments blank checks to help them fight poverty, hire teachers in villages, fight river blindness, whatever they choose. He creates this list from what he sees are the best run governments on the continent: Uganda, Ghana, Mozambique, Tanzania and maybe Mali. (My paperback has a 2006 copyright date, so my guess is that he would now include Mali on the list.)

His argument is simple: these well run governments are transparent enough so corruption isn’t a major worry and inclusive enough so the people have a say on where this development money should go. (Which should be the whole point of development.)

As for those other countries? He’d like to expand the list and give out money to more countries, but not until their governments start playing nice.

“The number could grow,” he writes of the list of five, “as political systems throughout the continent are opened up, corrupt leaders are replaced, and the benefits of self-directed development become clear.”

His arguments remind me of another World Bank turncoat, William Easterly, who wrote a book with a title surprisingly similar to Calderisi’s: The White Man’s Burden: Why the West’s efforts to aid the rest have done so much ill and so little good. (What is it with these former World Bank guys and their long titles?)

Easterly looks at development from a global vantage point and is markedly crankier than Calderisi (he’s an economist), but nobody would confuse either as a stoolie of the development crowd. Calderisi’s prescription for those leaders who don’t meet his demands: “[G]overnments that are indifferent to poverty, cannot guarantee basic education for their citizens, or offer only lip service to fighting HIV/AIDS should not be helped at all.”

If you think that is harsh, his prescription goes on from there:

• Introduce mechanisms for recovering public funds, that is put controls on secret banks and money stashes of African leaders, just like you’d target terrorist organizations;
• Require all heads of state, ministers and senior officials to open their bank accounts for public scrutiny. (My guess is the political big wig building the mansion across the street from my house may not support that one.);
• Require all countries to hold internationally supervised elections;
• Supervise the running of Africa’s schools and HIV/AIDS programs. I never said he was a bleeding heart.

It’s a bitter pill, this stuff. But as a Ghanaian said in the BBC forum:

African democracy is in its early stages and therefore must be given enough chance to grow. The continent is now going though an era of transition from the military days to the rule of law. In order to avoid the mistakes of the past, African leaders should not be given the mandate to rule for more than four years. The longer they stay in power the more complacent and less popular they become. We must give democracy a chance.

Not your father's World Bank

An interesting piece in the Washington Post dishing praise for the new World Bank president, Robert Zoellick.

After the failed presidency of his predecessor, Zoellick is off to a good start. His wonkish style goes over wonderfully: In my straw poll of World Bank insiders, the new boss gets a rapturous thumbs up. He brought nobody with him when he arrived, determined to avoid Wolfowitz's first error, which was to rely on imported aides detested by the bank staff. But if Zoellick's first hundred days at the World Bank have been a honeymoon, the reasons go beyond style.

The main thrust of Zoellick’s program is to provide some sort of political influence to help not reign in globalization per se, but steer it in a direction that will help include the billion or so people of the world who live outside its system. Sort of an advocate for the poor, I guess. In the words of columnist Sebastian Mallaby, it’s called “the political deficit of globalization.” We couldn’t reprint what the world’s poor called it.

Brush with greatness
When Wolfowitz traveled to Burkina Faso in June 2005, my friend Steve and I had the pleasure to meet some of his staff, including his assistant Robin Cleveland.

Here’s Robert Calderisi’s take on her (and Paul Wolfowitz) in the New Statesman:

She supervised the Pentagon's budget and is remembered for predicting that the war in Iraq would cost "only" $80bn (not $300bn and counting), after which its oil revenues would "pay for the rest". She also worked on Capitol Hill, where she was known as one of the meanest people in Washington. Her verbal outbursts and denigration of World Bank staff have made her infamous. And every Wednesday, I am told, she visits the White House for "instructions".

She was quite nice to us. As another (and much younger) aid straight out of the White House prattled on with the official photographer about the death of princess Diana, Steve peppered her with all sorts of questions on international aid and other sundry topics: I remember her being very adamant about speaking to her teenage kids about sex; she disliked the Peace Corps (a waste of money, I believe she said.); she thought the EU was a joke.

We didn’t ask her about Iraq.

All in all, an interesting conversation. She was engaging and in Burkina Faso we don’t get to speak to too many people who've sat near the throne of power. Anyway, the time to pay the bill came, and we put down our share of money. She wouldn’t take it; we insisted. She looked at the kid recently departed from the White House and said: “Please give these people their money back before I scream.”

So, you were saying?
As for the World Bank, it needs your help. I know a few people who have worked there and they’re all very nice and well intentioned and whatever. In my mind, however, the World Bank seems unsure of what it wants to do, what its role is in 2007. It certainly suffers from a clear case of scope creep. There’s the new good guys, who claim the Bank is a good tool for small-scale development. No, we’re a bank with funds to create large-scale projects, the old guys say. Why else would we be forced to push, push, push new lending. I want to be a bad-ass debt collection agency, opine a few guys in black. No, we’re soldiers in the war on corruption, Wolfowitz said before they pushed him out the door.

Yes, the bank has placed more people in the field; yes, its leaders have reigned in some of their support for large-scale one-size-fits-all projects; yes, they’ve started to address some of their abhorrence of transparency, especially their in-country decision making process. But the Bank has a long, long way to go. Part of me thinks that with increasing private capital from outside sources and falling loans from the World Bank itself, perhaps it’s time to find a better way to do this. Doesn’t Blackwater handle these sorts of things?

The grievances
Here’s a Carnegie Mellon professor’s take on the World Bank and its dependent audit sector, perhaps the single biggest problem the bank has. (Actually, auditing and project appraisal is a problem throughout the world of development. Along with paying per diem.)

After half a century and more than $500 billion, there is little to show for the bank’s efforts,” he writes.

He continues (and I quote):

• Thirty-eight countries have amassed $71 billion in unpayable multilateral loans, encouraged by the bank’s selfserving projections of country growth, on which rich-country taxpayers must now make good.
• Corruption has been exposed both within the bank and in its programs and is now estimated at more than $100 billion.
• Protest is rising among leading African scholars who seek to stop all aid because it serves only to entrench and enrich a series of corrupt elites.
• Massive anecdotal evidence of waste, ineptitude, and outright theft can no longer be ignored.
• Seldom does the bank return to inspect long-term project success, and many on-site investigations come up empty for lack of monitoring and records. The focus is on quantity of inputs with little effort expended to measure the effective output of programs. (His emphasis.)
• Performance measures have been manipulated to bolster management claims of success and refute critics.

Bent, not broken; kind of bad, but certainly not hopeless is how Nancy Birdsall (of the Center for Global Development) describes the bank. A fixer upper. Why? We need the Bank because it does what it does well well. Well, pretty well.

First, the U.S. alone cannot be the sole missionary for free markets and democracy. Bank staff bring to governments in the developing world -- many incompetent and some ridden at all levels with the curse of corruption -- solid expertise on how to foster poverty-reducing growth. Even China , India and Russia, which are flush with private capital and borrow little from the Bank, value its advice--be it on education, agriculture, debt management, or pension reform. They see the Bank as an imperfect but essentially honest broker, with staff who have worldwide, practical experience.

Second, the world needs the Bank to provide global public goods. With its financial heft and technical expertise, the Bank is arguably the best-armed institution to address urgent 21st century challenges that are beyond the scope of any single nation state: fostering an overdue green revolution in Africa; creating incentives for development of an AIDS vaccine and new solar energy and biofuel technologies; helping poor countries to adapt to accelerating climate change; and combating money laundering, cross-border bribery and other international corruption.

The speech
So what does Zoellick have to say for himself? Other than the advertised “globalization with a human face” theme, he laid a platform of six strategic areas where he will focus the Bank’s efforts.

Theme one: To help the poorest countries – especially Africa – overcome poverty and spur sustainable growth. He traveled to Africa during the summer and found that leaders want the Bank to help them build infrastructure (especially in the energy sector) that will help spur regional integration.

Second, to help address the special needs of countries coming out of conflicts. He admits the Bank’s understanding of these issues is modest at best.

Third, create a new business model for working with middle income countries. They may need social services and infrastructure, but what is most necessary is to increase the income of the poorest of these countries. Also, many face environmental problems.

Fourth, the World Bank must play a more active role in fostering regional development and integration and goods that transcend national boundaries.

Five (and an interesting choice of words): “One of the most notable challenges of our time is how to support those seeking to advance development and opportunities in the Arab World.”

Six, keep the multi-pronged approach alive and use the ability of the Bank to collect data to help the five other themes.

Finally, he spoke of the need to reflect on the bank’s internal challenges: Focus more on client services; strengthen ties with civil society; work more effectively with national aid programs; strengthen the approach with dealing with governance and corruption.