World Bank faces setback to war on corruption
Actions of bank president Paul Wolfowitz have led to allegations of impropriety.
from the April 23, 2007 edition
Page 2 of 3
"Your credibility as a leader in the fight against corruption … is certainly harmed if there's a perception" of actions inconsistent with good governance, says Mr. Vogl, a former World Bank spokesman. "The situation is very serious. It needs to be resolved in a clear, transparent manner."
The uproar comes barely a month after the bank issued a comprehensive report on its strategy for fighting corruption and promoting good governance – matters of heated debate within the bank during Wolfowitz's two years at the helm.
Most of the world's nations have serious levels of corruption, according to survey-based research by Transparency International. Of the surveyed countries, 71 – or nearly half – showed "rampant" corruption.
The problem spans from the public sector to the private, and across the ideological spectrum. Consider some news reports from the past month:
•In Taiwan, the leading candidate for president is standing trial, accused of graft in diverting more than $300,000 of public money into a private account.
•In Afghanistan, citizens say today's leaders there are more corrupt than were their Taliban or Soviet-backed predecessors, according to a poll by Integrity Watch Afghanistan.
•In the US, major universities are scrambling to clean up a scandal involving financial-aid officers who allegedly accepted financial perks from lenders while steering students toward their loans.
Raymond Baker, a scholar at the Center for International Policy in Washington, says the problem is so big that the very survival of global capitalism in this century is at stake. The reason: Too many of the world's peoples are held in poverty by the illicit transfer of wealth.
Over the past decade, the World Bank has begun to acknowledge the importance of the problem. Bank president James Wolfensohn put it squarely on the agenda in 1996.
Now some observers say that his successor, Wolfowitz, has pushed the issue even further into the forefront.
"He has certainly attacked the corruption issue in a much tougher way than anyone has before him," says Patricia Adams, executive director of Probe International in Toronto, which follows trade and aid issues. "The biggest thing that he did, that no one else has done, is just stop the flow of money" to certain countries.
In the process, Wolfowitz has become embroiled in a longstanding debate, inside and outside the bank, over how to reconcile two priorities – clamping down on corruption and continuing to assist nations that in many cases are desperately poor.
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