In Cameroonian Pidgin English, when a person refuses to give up on something, he is said to “hold grass”. This image is drawn from small animals clinging desperately to grass to avoid being washed away by water.
We all saw how Mr. Paul Wolfowitz, (now, thankfully, former) head of the World Bank, held grass for weeks after it was brought to public notice that he was embroiled in a sordid scandal involving a female companion. Well, Mr. Wolfowitz was swept away by the flood of public opinion. And now the US government is offering to replace him with someone who is, as evidenced by the article below, even worse, especially for the Third World.
The grass-holding of the US government, which in the past few years has squandered whatever moral currency it ever garnered as the leader of the “free world”, should be a cause for great concern for those of us who cannot hold grass when faced with an unprincipled giant.
Third-worlders and Bank borrowers, take out your hankies and sniffle after me…
The article follows.
Robert Zoellick and the World Bank: Putting the Fox in Charge of the Hen-House
David Woodward, nef (the new economics foundation)[1]
30 May 2007
This article first appeared on the Jubilee Research web-site, at www.jubileeresearch.org. |
Robert Zoellick, it seems, may have the rare opportunity to bring down, not just one international institution, but two. He has already played a central role in delegitimising the WTO whilst US Trade Representative, making a major contribution to the negotiations grinding to a halt. Now, it seems the Bush administration is determined to give him the chance to do the same thing at the World Bank. But, having had their fingers burned over Paul Wolfowitz, the Bank’s Executive Board should think long and hard before they stand by and let George Bush have his way again.
63 years ago, at the Bretton Woods Conference, the US government secured for itself the privilege of hand-picking the World Bank President without opposition from the rest of the membership – and the other members have quietly sat by and allowed it to continue this anachronistic and undemocratic “tradition” ever since. Two years ago, President Bush abused this privilege to inflict his deeply unpopular Deputy Defence Secretary and chief architect of the US invasion of Iraq on the Bank.
Now, Paul Wolfowitz has been forced to resign in disgrace amid a welter of accusations of abuse of power (of which his blatant conflict of interest in the Shaha Riza case is only the tip of the iceberg[2]), to an echoing worldwide chorus of “WE TOLD YOU SO!!!”. But the very same man who was responsible for this fiasco – George Bush – now plans to do exactly the same thing again to impose Robert Zoellick on a doubtless unwilling world.
As US Trade Representative (USTR) from 2001 to 2005, Zoellick was notorious among WTO delegates for throwing his – and the Bush administration’s – weight around in the negotiations, and expecting developing countries to fall in line and accept whatever the US demanded. But, while many developing country ministers succumbed to the threats and pay-offs of his preferred “carrot-and-stick” approach at the time, it bred neither trust nor affection, and ultimately backfired on him.
Zoellick was instrumental in the launch of the WTO Doha Round in 2001. This was a considerable feat, as there was widespread opposition in the developing world, which had precipitated the famous collapse of the 1999 WTO Ministerial Meeting in Seattle – and the WTO is at least notionally a one-member-one-vote institution based on consensus decision-making, and has a large majority of developing country members. Even with the power of the US for patronage and sanctions at his back (and a quite ruthless willingness to exploit it to get his way), this is a formidable obstacle. So how did Zoellick manage to pull this off?
A large part of the answer is 9/11. Just 11 days after the attack on the twin towers, on 20 September 2001, Zoellick opportunistically published an article in the Washington Post, making what might best be described as a rather tenuous link between the need to tackle terrorism and the need for free trade. The adversary, he said, ‘recognizes that America’s might and light [sic] emanate from our political, military and economic vitality. Our counteroffensive must advance U.S. leadership across all these fronts’. He went on to claim that ‘America’s trade leadership can build a coalition of countries that cherish liberty in all its aspects. Open markets are vital for developing nations…to overcome poverty and create opportunity’.
Suddenly, the US agenda in the WTO (which actually bore little resemblance to free trade, at least as far is its own policies were concerned) was part of the “War on Terror” – and President Bush’s dictum that “those who are not with us are against us” took on a whole new dimension for developing country governments and delegates in the WTO negotiations.
Zoellick’s less than subtle hint was not lost on developing country governments. By the time the Doha Ministerial Meeting rolled around in November 2001, many feared that, if they did not agree to the launch of the Doha talks, they would risk being branded as being ‘with the terrorists’. “Free” trade – or at least a decisive outcome to WTO negotiations – became the clarion call to counter terrorism. And should any delegate overlook this, a phone call to his capital would soon follow, no doubt accompanied by a reminder of just how dependent his country was on US aid, trade, investment and/or debt relief, and just what would happen to its economy if this somehow dried up.
In an interview for the book, Behind the Scenes at the WTO[3], one Africa delegate recounted his own meeting with Zoellick in Doha[4]:
In our bilateral meeting with the US, we were called to the Presidential Suite. Zoellick reminded us that he had already made calls to the capital and had spoken to our Head of State, and that all efforts to help combat terrorism had already been guaranteed, including launching a new Round [of WTO negotiations].
When Ambassadors did stand up to the US, it was by no means uncommon for such pressure on capitals to extend to “persuading” their governments to replace them – a tactic which was successful in several cases. According to a Central American delegate speaking soon after Doha[5]:
During the preparations for the [WTO Ministerial] Conference in Qatar, the pressure on the capitals increased, this time requesting the withdrawal of many of the Ambassadors in Geneva, who defended the interests of their countries, and who opposed the launching of a new round. The truth is that the launch of this new round would never have taken place if it had not been for the lack of transparency and interference on the part of the WTO Secretariat, and the political pressures used by the developed countries – mainly the United States and the European Union.
After Qatar, the pressures remain, and the objective of the developed countries is now to undermine any possibility of the developing countries presenting proposals and participating effectively in the negotiations. They are trying to destroy the Like Minded Group [a group of developing countries pushing for procedural reform in the WTO] which, as a coalition, attempts to achieve balance in the work of the WTO.
The pressure for changes of position and for the withdrawal of Ambassadors is permanent, and has no apparent logic beyond the arguments that the delegations in Geneva act as the enemies of the multilateral system, of the developed countries, and even of peace in the world. It is indeed incredible, in the 21st century, and in the context of an organisation in which all are supposedly equal, that arguments like these continue to be used.
With the assistance of such tactics, Robert Zoellick duly got his way in Doha. He also succeeded in destroying the reformist The Like Minded Group – whose Ambassadors he particularly targeted, succeeding in removing several.
In an interview quoted (anonymously, for obvious reasons) in Behind the Scenes at the WTO (p151), one of the victims recalled:
I was not the only one removed by US pressure on my capital authorities. Immediately after Doha [Ambassador A] did not even have time to empty luggage… [Ambassador B] did not even make it to Doha, and about a month afterwards was left without a job… [Ambassador C] had to travel to Doha with the company of his substitute… [Ambassador D] was removed and sent back to his native continent… [Ambassador E] was almost fired in Doha itself… By a sheer miracle, he was able to survive for a few more months in Geneva…..
But Zoellick’s victory proved to be short-lived. Before the Cancun Ministerial in September 2003, the US and the EU cooked up a package on agricultural trade that can only be termed as hypocritical – designed specifically to protect their own agricultural markets while opening everyone else’s. This proved a step too far. In fact, it catalysed a much greater degree of solidarity among developing countries, including the formation of a very determined “G20” grouping. As a result, as in Seattle, no agreement was reached.
Zoellick – a man known for his bad temper – was clearly shocked, and reacted true to form, blaming and threatening those who had refused to submit to the intense US pressure. After the talks had collapsed, in the final press conference in Cancun, he pointed fingers at the ‘won’t-do’ developing countries:
Too many were spending too much time pontificating, not negotiating. Whether developed or developing, there were ‘can do’ and ‘won’t do’ countries here. The harsh rhetoric of the ‘won’t do’ overwhelmed the concerted efforts of the ‘can do’… Demands and tough rhetoric are easy; negotiations require commitment and hard work. And some countries will now have to decide whether they want to make a point or whether they want to make progress… Many spent too much time with tactics of inflexibility and inflammatory rhetoric before getting down to negotiate.[6]
He went on to make a public and scarcely veiled threat that developing countries whose governments continued to resist US demands in the WTO would be penalised in the US Administration’s bilateral trade strategy. According to an Associated Press report at the time:
“The U.S. trade strategy”, [Zoellick] went on to threaten, “includes advances on multiple fronts. We have free trade agreements with six countries right now. And we’re negotiating free trade agreements with 14 more.”
“A number of countries just thought [the Cancun Ministerial Conference] was a freebie—they could just make whatever points they suggested, argue, and not offer and give,” he said. And now they’re going to face the cold reality of that strategy, coming home with nothing.” [7]
But just how strong is Zoellick’s commitment to free trade really? Almost non-existent, it seems – at least when it comes to the US. In February 2002, just months after the Doha Declaration was signed, and to the great consternation of the international community, Zoellick seems to have thought nothing of imposing additional tariffs on steel imports to protect the US steel industry. Nor did he do anything to fight the additional $73.5bn in subsidies that were provided to US agricultural producers in the May 2002 Farm Bill just three months later. If he ever had any belief in open markets, it seems all too easily to have fallen by the wayside at the least provocation.
What his WTO record shows is not Robert Zoellick, the tireless champion of free trade, but Robert Zoellick the promoter of American interests by any means and at any cost – especially to developing countries.
Is this really the sort of man we want as President of the World Bank? A man whose main claim to fame is a track record of arm-twisting, blackmail, pay-offs and abuse of power in the WTO to promote US interests at the expense of the developing world? Surely no-one outside the US could view such a prospect with equanimity– and, one suspects, relatively few outside the Bush Administration itself.
The World Bank itself has much to fear from Zoellick’s appointment. It is already at a particularly low ebb in terms of its legitimacy, credibility and relevance. For a quarter of a century, it has pushed ideologically-driven neoliberal policies in borrowing countries, with deeply damaging impacts across much of the developing world, and the promised long-term rewards for what were presented as short-term sacrifices still show little sign of materialising for most. Even as the Bank rebranded itself as an institution whose mission was to reduce poverty, and the world emerged from the “lost decade of development”, the 1980s, the rate of global poverty reduction has actually slowed dramatically, as the share of the poor in the benefits of global growth has plummeted.[8] And, after years of the Bank promoting itself as a self-styled “Knowledge Bank”, a recent independent review by prominent academics found that its research, which forms the basis of its promotion of neoliberal policies, is neither objective nor reliable.[9]
Quite apart from his ignominious departure, Wolfowitz’s tenure as Bank President merely served to undermine the Bank’s reputation further, highlighting the Bank’s role as a multilateral instrument for the furtherance of US interests and agendas. His only ‘new' initiative at the Bank was a crusade against corruption, whose credibility was seriously undermined from the start by his reputation for rewarding supporters of the US war on Iraq with untransparent, lucrative “reconstruction” contracts, which continue to bleed the country dry.
It is hardly surprising, then, that the Bank’s popularity is plummeting around the developing world. In Latin America, popular sentiment is growing that governments should sever relations with the Bank. In Asia, the abundance of private capital is encouraging middle income countries to cut down borrowing from the Bank. In Africa—a region particularly devastated and impoverished by Bank ideology and practice—China's ascendancy as a bilateral donor is threatening the Bank's influence over governments.
Appointing Zoellick as President can only help to intensify this growing disenchantment. Wolfowitz’s nomination demonstrated the Bush Administration's arrogance and complete confidence in the impunity it enjoys in the global policy arena; and its nomination of Zoellick, in the expectation that the Board will once more rubber-stamp his appointment – even after their previous nominee has so thoroughly disgraced himself – shows this attitude more than ever.
The Bank’s Executive Directors should think very long and hard before they decide simply to rubber-stamp the US nominee once again. Not just because this would be a gross abdication of their (moral, and quite possibly legal) responsibilities to the Bank and the countries they represent. Not just because they have already embarrassed themselves once by appointing President Bush’s last nominee, the disgraced and unlamented Paul Wolfowitz, or because they failed to ensure that he discharged his duties appropriately, and then negotiated a face-saving (and lucrative) “resignation” package with him because they couldn’t bring themselves to sack him. Not just because Robert Zoellick is once again clearly a wholly inappropriate and unqualified candidate, whose idea of international diplomacy, as exemplified by his years as USTR, is more reminiscent of the Mafia than democratic governance. And not even because he might very well bring the Bank into disrepute and near-collapse, just as he did with the WTO.
Even if the Bank’s Executive Directors do not find these reasons compelling enough to live up to their responsibilities and conduct a serious selection process for the Bank Presidency, there is another consideration they might find more persuasive. Before quietly acquiescing in Robert Zoellick’s appointment as Bank President, they should also take a long hard look at what happened to those Ambassadors in the WTO who dared to stand up to him as USTR. And then they should think very carefully about just how long they might go on being Executive Directors if they don’t serve out the rest of their terms just standing by and letting Zoellick run the Bank just the way he and his White House puppet-masters please.
You have been warned….
[1] The author is very grateful to Aileen Kwa, co-author of Behind the Scenes at the WTO (details at footnote 3) for her assistance in writing this article. However, the author is solely responsible for the views expressed.
[2] For a comprehensive catalogue of the many and varied allegations against Wolfowitz, and the supporting evidence, visit the archive at www.worldbankpresident.org.
[3] Fatoumata Jawara and Aileen Kwa (2004) Behind the Scenes at the WTO: the Real World of International Trade Negotiations. 2nd edition.
London: Zed Books. The book presents a detailed account of the processes before, during and after the WTO Doha Ministerial Meeting, based on interviews with 34 Ambassadors, delegates and Secretariat staff members at the WTO, which are quoted extensively throughout the book. Anyone who isn’t thoroughly convinced that Zoellick shouldn’t be allowed anywhere near the World Bank by the time they’ve finished reading this article should read this book!
[4] Personal communication from Aileen Kwa, who conducted the interview.
[5] Aileen Kwa (2002) Power Politics in the WTO: Developing Countries' Perspectives on Decision-making Processes in Trade Negotiations. Focus on the Global South,
Bangkok. http://www.focusweb.org/publications/2002/power%20politics_final.pdf.
[6] USTR Press Release, 14 September 2003, US Trade Representative Robert Zoellick Evening Press Conference,
Cancun, Mexico.
[7] Associated Press (2003) “WTO Reeling from Trade Defeat in Cancun”, 15 September.
[8] David Woodward and Andrew Simms (2006) Growth Isn’t Working: the Uneven Distribution of Benefits and Costs from Economic Growth. nef (the new economics foundation). http://www.neweconomics.org/gen/z_sys_publicationdetail.aspx?pid=219.
[9] Bretton Woods Project (2007) ‘Knowledge Bank-rupted: Evaluation says key World Bank research ‘not remotely reliable’’. 31 January. http://www.brettonwoodsproject.org/art.shtml?x=549070.
Typical weak-minded argument: Link to a rambling incoherent article, then pretend as if said article is the "final word" on the issue. Newsflash (not noted in your commentary or your cited article): Paul Wolfowitz openly disclosed his personal relationship with Shaha Riza to the Bank’s ethics committee before even coming on board to the World Bank. Did you even know that? You certainly don't mention it. Neither did the article to which you linked. How about the fact that Melkert, Chairman of the World Bank ethics committee, originally stated that "after careful review", there was no cause for further investigation. His verbatim words were that the details of Riza's pay increase "did not contain new information warranting any further review by the committee.”
I'm no fan of corruption, of which the World bank is famous, but it seems clear that Wolfowitz's real sin, if his critics were more honest, is that he supported the war in Iraq. Nothing to do with his actions at the World Bank
If you believe differently, then make the case while acknowledging the facts. Yourself. Without linking to rambling personal attacks from others.
Posted by: DarrellF | Sunday, June 17, 2007 at 11:11 PM
DarrellF, you have to give Wolfowitz his real credit. He did not just support the war in Iraq, he was one of its cardinal doctrinaires and instigators. That is much better than me of course, who only thought it was a jolly good idea at the time. One more thing DarrellF, why are you so upset? Are you a relative or something?
Posted by: Azaga | Sunday, June 24, 2007 at 09:37 PM