The World Bank, the planet’s largest lender to poor nations, will soon have a new leader. The Bush administration should support a candidate who will bring about changes within the mammoth institution necessary to make it more effective at its primary task: ending World poverty. Given that by tradition, the U.S. picks the World Bank president, this is a golden opportunity to help mend some fences and improve the nation’s standing internationally at a time when U.S. popularity is suffering.
A large portion of the U.S. taxpayer funds allocated to alleviating poverty worldwide is channeled through the World Bank, whose mission is “a world free of poverty.” Yet, in my travels to World Bank projects in Bolivia and other poor nations, I can report that the bank seldom gets it right.
During the World Bank’s 60 years of existence, it has poured billions of dollars into climate-destabilizing oil extraction projects in the world. Indeed, over four-fifths of the oil projects financed by the World Bank in the last decade have been for export to rich countries, including the U.S., instead of providing energy services to poor people in those countries.
Encouraged and applauded by the U.S. government, the World Bank has pushed for unregulated, open markets and lax social, labor and environmental policies throughout the developing world. In this hemisphere, Argentina experienced a major economic collapse in 2001 after diligently following World Bank prescriptions for decades. The number of people living in poverty in that country more than doubled within weeks.
The rest of Latin America has also swung dangerously in and out of recession. Broad dissatisfaction with a constant decline in living standards now manifests itself in the wave of new presidents elected in Bolivia, Brazil, Argentina, Ecuador and Venezuela. These leaders reject the bank’s market-opening formulas and instead are trying to tackle poverty by invigorating local economies.
This year will present important opportunities for the U.S. government to help redirect the path of the World Bank. Current World Bank president, James Wolfensohn, will leave his post in the coming months. At the same time, the Bush administration is selecting a new U.S. representative to the World Bank’s board.
This shift offers a great opportunity to transform this institution into one that addresses poverty effectively. Although there has been much speculation about who might fill these prominent vacancies, the White House has made no official announcement, except to float names whose expertise lies in running drug companies or negotiating trade deals.
Although it’s a global organization, a handful of member countries exert overwhelming control. The entire African continent is represented by two directors on the World Bank’s board, while the world’s five richest nations each appoint one representative. This imbalance of power is apparent in the direction the Bank has taken since its creation, and correcting it should be a priority for the new World Bank leader.
The tradition that a U.S. citizen must hold the World Bank’s leading post in itself contributes to a crisis of democracy within the institution and has fueled anti-U.S. sentiment throughout the world.
The Bush administration should throw out its current list of candidates for the World Bank’s presidency, none of whom have careers in poverty reduction. Rather, it can offer candidates who are visionary, and have proven track records as leaders in sustainable development, defending human rights, protecting the environment, standing up for workers, and taking a tough stance on corruption. It should not matter what country that person comes from.
President George W. Bush has stated, “We expect the World Bank to insist on reform and results, measured in improvements in people’s lives.” He now has the chance to help make that happen. In addition to their own advisers, administration officials should consult with the myriad citizens groups who have invaluable experience in international development right here at home as well as abroad.
Supporting the right person for the job won’t only help to smooth out relations with our international friends and neighbors. It can promote the very freedom and democracy in this country that Bush himself so proudly advocates.
NADIA MARTINEZ is a research fellow at the Institute for Policy Studies and a contributor of Foreign Policy in Focus. She can be contacted at email@example.com.