World Bank candidate not fit for the job


By Brooke McKean
June 1, 2007

Once again, the Bush administration has elected an official unprepared for the job. For example, John Bolton, who once said it wouldn't matter if a few floors of the United Nations building were blown up, was our recent U.S. representative to the U.N. Paul Wolfowitz was elected World Bank chief, although his only experience is in U.S. politics.

With Wolfowitz's retirement after a scandal with his girlfriend, President Bush just nominated Robert Zoellick to replace him. Zoellick should not lead one of the world's largest donor agencies, nor should any American.

Zoellick's past dealings as U.S. trade representative for the Bush administration highlights that his theories and opinions do not represent the needs of Third World countries.

While representing U.S. policy, he supported policies that hurt the poor. First, while promoting regional free trade agreements to "level the playing field," Zoellick never considered decreasing U.S. agricultural subsidies.

These subsidies are greater than the gross domestic product (GDP) of most developing nations, allowing the United States to pour its surplus agricultural products into developing nations and make a phenomenal profit while weakening local markets. These subsidies are one of the greatest challenges facing developing nations created by rich nations.

During the second round of the Doha trade talks at the World Trade Organization, which discussed the lessening of agricultural subsidies in the West, nothing was accomplished. Zoellick claimed the United States would decrease subsidies by one-third, which is still a phenomenal amount of money, but he refused to negotiate.

Undoubtedly, Zoellick is there to represent the interests of the U.S. government, but if he is truly "pro-poor," he would have pushed for some conclusion at the Doha rounds, which failed.

Zoellick also denied public health needs in negotiating regional trade agreements, particularly the Central American Free Trade Agreement (CAFTA). Low-income countries are allowed to negotiate patents and access generic medications, particularly for AIDS drugs that are almost one-third of the price of major pharmaceutical drugs.

CAFTA restricted access to critical medications for poor nations by forcing Central American countries to buy from major U.S. pharmaceutical companies. Hundreds of thousands of people have and will lose access to critical medications.

Criticizing Zoellick's nomination, Paul Zietz, executive director of the Global AIDS Alliance, said, "He has been a close friend to the brand-name pharmaceutical industry, and the bilateral trade agreements he has negotiated effectively block access to generic medication for millions of people."

Furthermore, as a wealthy American, Zoellick probably has very little understanding of life in a developing nation. Emphasizing his ignorance, Zietz said, "Zoellick has no significant experience in economic development in poor countries."

Based on Zoellick's history, he will probably implement neoclassical economic theory similar to his trade policy. However, in the imperfect markets of the Third World, such policy creates negative feedback and disregards day-to-day needs of the poor.

It continues to baffle me that World Bank presidents are always white American males with very little experience living in Third World countries. How can anyone ethically and responsibly represent the needs of 80 percent of the world's population in developing nations with such little experience?

I suppose the answers are the same as usual: U.S. interests, corporate bureaucracy and general ignorance of global development issues.

The Bush administration and future presidents need to go beyond their personal interests for the sake of the world's population. We would all be better off.

Reach columnist Brooke McKean at opinion@thedaily.washington.edu.


Comments

#1 Russ Wung

commented, on
June 1, 2007 at 2:01 p.m.:

No, no, you've got it all wrong. World poverty is the Greek system's fault!

But seriously, eliminating agricultural subsidies was never really on the table because Congresspeople, both Republicans and Democrats, who represent the states that benefit from them would never allow such a thing to go through. Zoellick would have been promising something that the administration would not have able to deliver on. Farm subsidies are just another example of how government meddling in the economy is in the end harmful to all people, including the poor.

I'm also somewhat disappointed no mention was made of the astounding corruption that goes on in developing countries vis-a-vis aid money. Whatever Wolfowitz's faults (the WSJ has made an excellent case that most of the allegations were fabricated or grossly distorted), part of the reason he angered so many European elites was his tough anti-corruption drive, which hit close to their pocketbooks and for dictatorial regimes in the Global South, who steal aid money and put it in their own pockets instead of building their countries' economies. This fight against corruption is the most important problem in getting development aid to the poor.

The fact that neoclassical economics has not worked properly in countries with rampant corruption and no rule of law is the fault of those countries' corrupt governments, not of neoclassical economics.

The World Bank has not been a very good vehicle for international development. This is not a question of presidents but of institutions. The future of global development does not lie with dysfunctional, bureaucratic institutions like the UN and World Bank, but with microlending, which bypasses governments and loans money directly to the poor. These programs are often self sufficient and avoid much of the governmental corruption which is endemic in many countries of the Global South. The Nobel Peace Prize has been given to many people of questionable merit, but Muhammad Yunus (the Bangladeshi banker who pioneered micro credit) was a good choice.

#2 Joy Lessons

commented, on
June 3, 2007 at 12:39 a.m.:

As long as "developed" nations continue to allow vulture funds, and similar policies of the same ilk are supported, it doesn't matter who runs the World Bank. If the full flow of money is tracked, it seems to hold a striking resemblance to money laundering and whatever scant benefit is genuinely accomplished in developing nations (corruption aside), would seem to be of secondary importance, but apparently just enough to justify it's existence.


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