Today's editorial comment in the Wall Street Journal calls for greater scrutiny of the World Bank on the part of the USA. About time::
If there is a silver lining here, it is that the public has been able to get a glimpse of how the World Bank works and what it actually accomplishes. Among other lowlights, we've recently been reminded that the bank annually pushes billions in loans to countries like China and Mexico that can easily get credit in private capital markets. We've seen that many of those loans go to projects in places like India or Kenya that are riddled by corruption; the bank may have lost as much as $8 billion to corruption in 25 years of lending to the Suharto regime in Indonesia. We've also learned that the bank funds literally hundreds of projects from Albania to Niger that were ill-conceived and proved to be failures.
We've seen that senior bank personnel, such as former Indonesia country director Dennis de Tray, openly argue that corruption is no big deal and should not get in the way of the bank's "helping people." We've seen how the bank trashed the careers of longstanding and well-regarded employees such as Bahram Mahmoudi, who blew the whistle on a misamanaged project. We've seen how Shengman Zhang, the bank's No. 2 under former President Jim Wolfensohn, seems to think there's nothing amiss with calling for Mr. Wolfowitz's resignation despite the fact that Mr. Zhang's wife was swiftly promoted while working under him.
We've seen how the board of directors apparently covered for one of their own--British Executive Director Tom Scholar--when he was accused of having a conflict of interest because of a personal relationship with an employee at the bank. And we've seen how the bank has served as a well-paid sinecure for out-of-office politicians such as Dutchman Ad Melkert, who has moved comfortably within multilateral institutions making an enviable tax-free salary while performing incompetently and behaving dishonorably.
In a better world, the bank would shrink to perform only its core mission of helping the world's poorest nations. That's not going to happen, however, so the best that President Bush can do now to minimize the damage of the Wolfowitz putsch is by replacing him with someone who shares his agenda and will clean the place up. No European should have a chance to do that given what has transpired, not even Tony Blair. Nor should he name another well known member of the Council on Foreign Relations seminar circuit whom the Europeans and staff can quickly capture.
We've suggested former Federal Reserve Chairman Paul Volcker, who saw first-hand how these institutions function while investigating the U.N.'s Oil for Food scandal. But whoever it is, the core task of Mr. Wolfowitz's successor should be to clean the World Bank stables, or shut it down.