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Paul Wolfowitz and Haiti

The controversy over World Bank President Paul Wolfowitz and the payraise (to $193,590/year) to his Bank colleague and domestic partner, Shaha Riza, has focussed on the propriety of Mr. Wolfowitz’ involvement in the promotion and raise, and the apparent hypocrisy of Mr. Wolfowitz lecturing against corruption in World Bank borrower countries while engaging in questionable practices at the Bank (see a good article in the Washington Post by William Easterly). But there has been very little discussion about the propriety of an institution whose mission is to fight poverty to be paying anyone that much money, and the hypocrisy of the Bank in general telling poor countries to cut salaries for nurses and teachers while it paid such high staff salaries.

The absence of these issues from the debates may be explained by the absence of the voices of the Bank’s supposed constituents- the poor of Haiti and countries like it. The debates have been exclusively framed by relatively wealthy journalists, officials and policy makers living in relatively wealthy countries, with no input from the poor the Bank is supposed to be helping.

The World Bank compares the relative wealth of countries with a figure called per capita GNI (or Gross National Income), which is roughly a country’s annual wealth produced divided by the number of people living there. According to the Bank’s website, Haiti’s per capita GNI is $450, so on average 430 Haitians get by on Ms. Riza’s annual salary.

The World Bank does not release its general salary information, and although Ms. Riza’s salary is probably at the high end of the scale, it is a high scale to begin with. The Bank defends its salaries by saying that its employees live in expensive cities with high rents, and that it needs high salaries to attract the employees it wants- people with excellent resumes and world-class financial and management skills- who are also coveted by the private sector.

Although financial and management skills are vital to the successful operation of any financial institution, the World Bank is not just any bank- its success is supposed to be measured not by profits but by reducing poverty. The Bank has financial policies, but it also has political, moral and social policies: it tells poor governments how much they can spend on healthcare (and implicitly, how many citizens will die of preventable diseases), on education, clean water, roads, etc.

Solid analysis of the financial data is essential for making good economic, moral, political and social policy decisions, but the decisions require other skills as well, including an understanding of the implications of those policies beyond the spreadsheets. Someone making $193,000 year would have only a limited understanding of what healthcare cuts mean to the 430 Haitians struggling to getting by on their share of that amount, a share that leaves no room for health insurance.

I have no reason to doubt that the Bank’s employees do a good job of financial analysis, but there are plenty of reasons to doubt that the institution is effectively fulfilling its poverty-fighting missions. Many of its borrowers are poorer now than they were when the Bank started to help them. Global inequality, as well as death by preventable disease, increases every year. In recent years, countries that have had the opportunity to escape the Bank’s “help” have been willing to pay billions of dollars to do so.

This scandal might be a good opportunity for the Bank to reflect on what kind of an institution it is, and what kind of people it wants to attract. It may find that by emphasizing its mission over salary, that it can find people with the technical skills who are willing to accept as part of their compensation the knowledge that they are working to fight poverty.

BRIAN CONCANNON Jr. is a human rights lawyer and directs the Institute for Justice & Democracy in Haiti, www.ijdh.org

 

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