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The current change in World Bank leadership brings an important opportunity to discuss the role of the institution. However, debate has been reduced to a dispute over the nationality of the president. The core issue lies not on the procedence of those who are in power, nor on their capacity to conceal the beneficiaries of nepotism, but on the logic that politically guides the institution.

Europe wants him (indeed it is him since it has always been a man) to be a European and no longer an American as historically has been the case – being obviously proud of the performance of the IMF, historically led by a European – while others demand it should be someone from a Southern country. Well then, what if Demiaan Fiocca, former president of BNDES, was to be president of the World Bank? Would this imply a change in the performance of the institution? The Finance Minister, Guido Mantega, criticises the process by saying that the election should be made on the basis of merits rather than nationality. Right, but who is going to define those merits? Is it going to be, by any chance, the people directly or indirecly affected by the Bank’s policies or the traditional owners of power – either Brazilian, American or European; all of them belonging to the same neo-liberal school? The core issue lies not on the procedence of those who are in power, nor on their capacity to conceal the beneficiaries of nepotism, but on the logic that politically guides the institution. It is precisely this guidance which has a direct impact on the power structure and the development model on which the Bank bases its lending.

Naturally, to have Wolfowitz – or any Wolf-something – as head of a development bank is something that must be questioned; not only for the ethical issue resulting from his nepotism but also for being one of the architects behind the invasion of Iraq as well as advocate for the implementation of neo-liberal policies that have been responsible for the death of millions of people worldwide. However, Robert Zoellick – former US trade representative – cannot be considered an anti-Wolfowitz as he has been portrayed in the press, just because he has not yet been photographed wearing torn socks or licking his comb before running it through his hair1. The same as Wolfowitz, Bush’s current candidate is going to head an institution that promotes the capitalist interests of large multinational companies, the privatisation of public utilities, the reduction of the State and the end of national sovereignty, through the use of moralist – since they believe they know what is the best for the world – and very probably immoral conditionalities attached to loans, while also taking advantage of illegitimate external debts – which it was responsible to create – as an instrument for control. Those policies are responsible for increasing poverty, inequality and exclusion, promoting the privatisation of life and contributing astonishingly to one of the greatest and most menacing nightmares of nature and humankind: global warming. And the Bank’s failure in meeting its goal of “helping the poorest people and the poorest countries”2 – a mask for its real interests – cannot be just acknowledged by those who are well-known critics of the Bank, such as NGOs, social movements and some scholars. The Bank’s own Independent Evaluation Group concluded that between 1995 and 2005 only one in ten borrowing countries showed sustained growth. With regards to the other nine, they either remain stagnated or fall into even more severe poverty 3.

All that control continues to be exerted even over countries that no longer need financial resources from the Bank, as is the case of Brazil. In 2006, the World Bank disbursed U$S 2.2 billion; and the IDB U$S 1.5 billion4, and the BNDES U$S 26 billion. The difference is alarming. Then, what for? The World Bank considers its presence to be important for Brazil on account of its “crowd pulling power” – it attracts partners! But, will it be really so? Or is it just another excuse to try to overcome the fact that it no longer manages to justify its existence? If Venezuela and Ecuador can go on without the World Bank, why not Brazil? Because the government is unwilling to do so!

Instead of keeping on losing time with discussions over the presidency of a politically, financially and above all ethically failed bank, Brazil should be concerned about the promotion of real changes at BNDES which is following the same steps as the World Bank in terms of development promotion model. After over sixty years of World Bank and IMF, it is high time we said the reform of these institutions is not possible. It is necessary to build alternatives aimed at promoting the implementation of economic, cultural and socio-environmental rights, with all people sharing the same rights and the same power. These alternatives should be governed by countries themselves in order to prevent the creation of huge machines offering unreal salaries to replace the State, with leaders and officials that would be responsible before justice, would have no immunity and would have to pay taxes, where all the information and records would be of public domain, aiming at overcoming the asymmetries rather than increasing them. That is to say, alternatives of the people for the people. All that which the World Bank fails to do!

Fabrina Furtado
Master in International Political Economy and
Executive Secretary of Rede Brasil on Multilateral Financial Institutions

References:

1 - Amid the nepotism scandal this May, the Brazilian press published photographs of Wolfowitz wearing torn socks in a mosque in Istambul. In his film Farenheit 9/11, film director Michael Moore showed Wolfowitz licking his comb, running it through his hair and smiling before giving an interview about the invasion of Afghanistan and Iraq.

2 - World Bank Group About World Bank Available at: http://www.worldbank.org

3 - World Bank Group Annual Review of Development Effectiveness 2006 – Getting Results

4 - Ministry of Planning, Brasilia. Available at: Fluxo Financeiro Banco Mundial e BID

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