Why Wolfowitz?
By Jim Vallette
18 March, 2005
TomPaine.com
President
George W. Bush has shocked the international development world by announcing
that he wants Assistant Secretary of Defense Paul Wolfowitz to be the
next president of the World Bank. Choosing Wolfowitz for this job makes
perfect sense if the Bush administration intends to completely alienate
the world community. Its the worst presidential nomination since
Ronald Reagan picked James Watt to head the Interior Department, and
it betrays the governments practice of putting business and geopolitical
interests above all else.
The U.S. government
has selected every World Bank president in the development
institutions 60-year history, and alone holds de facto veto power
on its executive board. Through this dominant position, U.S. administrations
have long used the Bank to pry open developing countries economies
and resourcesto satisfy the insatiable appetites of U.S. corporations.
This primary objective of Washingtons policy at the Bank has been
threatened in recent months and years by calls to democratize the institution,
and to end its support for export-oriented oil projects.
At the past two
World Bank annual meetings, ministers and lawmakers from Africa, Latin
America, Asia and the Pacific pointedly demanded that the democratically
elected representatives of borrowing nations be the final arbiters of
all economic policies in their countries. They are challenging the very
structure of the Bankwhich would entail taking voting power from
the wealthiest nations. Also, a Bank-commissioned study last year recommended
that it phase out all financing of oil projects, because the exhaustive
investigation found no examples where such projects alleviate poverty.
The Bank itself has rejected its own commissions recommendations.
The United States
fears democracy and reform at the Bank. In a confidential June 2003
note to the World Bank board, then-Executive Director for the United
States Carole Brookins wrote a terse rebuttal. Giving population
and other factors a weight in voting strength would create a radically
different, less desirable and non-financial structure for the Bank,
she said.
Bush and Vice President
Dick Cheney are now striking back with another demonstration of shock
and awe, by nominating Paul Wolfowitz, a primary architect of
the Iraq invasion and the botched reconstruction efforts thereafter.
Wolfowitz must be approved by the World Banks executive board
to get the job. For the sake of the worlds poor, lets hope
that the board rebuffs this nomination.
Over decades of
political work, Wolfowitz and longtime buddies Donald Rumsfeld and Cheney
have mastered the art of packaging raw geopolitical and corporate objectives
into initiatives named otherwise. Strategic oil fields have preoccupied
them in and out of office.
It is almost a natural
progression for the Bush/Cheney administration to want someone this
steeped in blood and oil in charge of the World Bank. He was a weapon
of mass deception for corporate quests in Iraq. At the Bank, he can
serve the same function under the cloak of poverty alleviation.
Wolfowitz long advocated
for the Iraq invasion, partly on the basis that Saddam Hussein controlled
a lot of the worlds oil. In 1998, he advocated the creation of
a liberated zone in Southern Iraq, and the creation of a
provisional government to control the largest oil field in Iraq
and make available to it, under some kind of appropriate international
supervision, enormous financial resources for political, humanitarian
and eventually military purposes, in testimony before Congress.
Saddams supporters in the Security Councilin particular
France and Russiawould suddenly see a different prospect before
them. Instead of lucrative oil production contracts with the Saddam
Hussein regime, they would now have to calculate the economic and commercial
opportunities that would come from ingratiating themselves with the
future government of Iraq.
With the invasion
of Iraq, Wolfowitz executed a similar agenda, using oil resources as
a lever for economic, military and commercial opportunities. Occupied
Iraq represents the main development experience of this
would-be World Bank honcho.
Wolfowitz helped
orchestrate the U.S. reconstruction agenda, first by trying to strong-arm
non-coalition Europeans into canceling Iraqs debt. I hope
they [Paris, Moscow and Berlin] will think about how they can contribute
to helping the Iraq people get on their feet, he told an April
2003 Senate hearing. I hope, for example, they'll think about
the very large debts that come from money that was lent to the dictator
to buy weapons and to build palaces. He has never vocalized opinions
on debt cancellation accumulated by other odious regimes, as far as
the public record reveals.
After the Europeans
did not fall in line, Wolfowitz said the spoils of warer, reconstruction
contractsshould go only to those countries that supported the
U.S. invasion. In a Dec. 3, 2003, memo, Wolfowitz limited the use of
Iraq development funds to only those companies that are based in coalition
countries. Coalition partners share in the U.S. vision of a free
and stable Iraq. The limitation of sources to prime contractors from
those countries should encourage the continued cooperation of coalition
members, he wrote.
Over the ensuing
months, billions of dollars of oil export revenues flowed through the
Coalition Provisional Authority-controlled Development Fund for Iraq
(DFI)and into the Bush/Cheney administrations favored corporations.
An investigation
by the agencys inspector general hardly reads like a recommendation
for a would-be president of the worlds largest development institution.
The January 2005 audit found: The CPA provided less than adequate
controls for approximately $8.8 billion in DFI funds, provided to Iraqi
ministries through the national budget process. Specifically, the CPA
did not establish or implement sufficient managerial, financial, and
contractual controls to ensure funds were used in a transparent manner.
Consequently, there was no assurance the funds were used for the purposes
mandated by the United Nations.
As with the Europeans,
the Bush administration had a difficult time in getting the World Bank
to walk in lock-step on Iraq. Outgoing World Bank President James Wolfensohn
did not back Wolfowitzs call for total debt cancellation, nor
did he rush his employees into the country after the invasion. With
many European powers locked out of reconstruction contracts, he had
little chance of reaching a consensus on the Banks executive board.
The Banks
reticence to finance projects in Iraq may have pushed Cheney and gang
over the edge, ushering the embodiment of U.S. unilateralism into his
anointed role. With Wolfowitz in charge, the World Bank may be able
to complete what the Iraq invasion started two years ago: U.S. corporate
control over the worlds second-largest oil reserves.
Jim Vallette
is the research director for the Sustainable Energy & Economy
Network at the Institute for Policy Studies. He is the co-author of
numerous reports on the World Bank, including most recently Wrong Turn
from Rio: The Worlds Bank Road to Climate Catastrophe.
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