Anne Williamson on the Meaning of the World Bank's Wolfowitz Scandal

From LewRockwell.com:

Wolfowitz's agenda puts at risk a very cozy world based on the post–World War II modus operandi in which dollar loans are extended to undeveloped and impoverished nations in order to grab control over their resources and governments. The main point is the loan, not the borrower's ability or commitment, but the lender's claim on national collateral. The corruption emerges from institutional action, action inherent in and according to the World Bank's design as a political lender masquerading as a humanitarian enterprise, and nothing effective can be done about it as long as the institution exists. Reform is not an option, only elimination.

For the well-positioned second-raters that people the Bank, there's no advantage in trading in a country club existence and perfumed reputation just to browbeat and bludgeon troops out of poor nations in return for dollar grants. It's so much more agreeable to posture as a helping-hand, hiding the nasty imperial bits in the loan covenants. True, the policies the loans require often lead to public riots, and to resource, land and territorial wars among their clients, but the mainstream media never connects the loans to their bloody consequences. At worst, details of the borrower's thievery leak out.

What's really at stake for staff is the richest, absolute best government plantation in the entire world. World Bankers, along with IMF, IFC and EBRD employees, enjoy a mem-Sahib lifestyle; tax-free six-figure salaries, foreign expeditions involving first-class travel, five-star hotels, generous per diems, lavish banquets, and – if one is obliged to "stay on" overseas for "mission" work – extensive local staff and personal aides, language tutors, tuition support for the children, numerous mandated vacations home per annum, residential rent subsidies, full insurance packages, diplomatic mail for those legally-dubious art acquisitions, the best address, and fancy invites.

If you are a foreign national lucky enough to escape your native backwater for an assignment in Washington, or London, or Paris, or Geneva – all the best places! – there is no treachery you wouldn't commit to stay in place. (The very best institutional reform scheme ever put forward was Christopher Fildes's suggestion to move the Bank's headquarters to Bangladesh.)

If you are a consultant, or an academic "adviser," you'll keep your honest opinions to yourself, and do the job, no matter how mad or useless. There's no way your university could, or your firm would, roll out a red carpet like the World Bank does.

If you are a Third World borrower and a government official and therefore advantageously-positioned to skim the loans and use the principal for purposes more useful to you and your continuing hold on power than to the nation, the World Bank is your literal lifeline. Without scads of dollars to hand out, an honest election or worse – open revolt – are always possibilities.

If you are a large, richly-endowed private corporation with an eye on the profit possibilities in some foreign hellhole, you'll play along, doing your bit to legitimize, publicize and generally support the Bank. After all, those giveaway loans may well be your critical leverage indirectly. Tit for tat. Loan for license.

Clearly, there's a lot of mouths to be fed. Luckily for the class of useless hors d'oeuvre eaters, there is China.

China is a rare creature in the World Bank firmament in that it is a large and paying customer, taking full advantage of the Bank's subsidized loans despite having an unprecedented $1.2 trillion in reserves. The income China represents to the World Bank is critical; already the Bank's sister institution, the IMF, an agency China does not patronize, is unable to make enough of a return on its international loans to pay its costs and is currently floating the idea of selling a portion of the Fund's contributed gold horde for cash to pay for their jobs and privileges.

The World Bank does not wish to be similarly indisposed.

There really wasn't much heat in the Shaha Riza story. After all, a couple of middle-aged parasites and public policy bores divvying up a big bag of other peoples' money while giving free reign to their shared delusions of bayonet democracy and the Middle East is somehow depressingly familiar.

But in the initial scandal data dump to the Washington Post on 12 April ("World Bank Chief's Leadership Role Called Into Question"), one sizzling fact leaked out apparently by mistake as it was never mentioned again in future reports. The maverick leak was an e-mail "noting that the bank had received a warning from China that it might halt future borrowings if Wolfowitz refused to curb anti-corruption investigations."

Wolfowitz is toast.

Alas, the Bank is not. Not yet, anyway.