World Bank President Paul Wolfowitz may appoint
a new resident director for Iraq soon, a move that sources inside the Bank
say could contradict the institution's policies on engagement in
conflict-stricken areas and put his role in the 2003 U.S. invasion back
into the limelight.
The move by Wolfowitz, the former number two official at the Pentagon and
a main architect of the U.S.-led war, likely means the Bank would release
new loans to the occupied Arab nation, despite the deteriorating security
situation and recent disclosures of massive corruption in reconstruction
"This is exactly what he shouldn't be doing and what the [World Bank]
board was initially afraid that he would do, which is to use the financial
resources of the World Bank to take some of the heat off the U.S. Treasury
and U.S. policy," Bea Edwards of the Washington-based watchdog group
Government Accountability Project told IPS.
In a previous statement, Edwards argued that "Wolfowitz's apparent
determination to use the World Bank to further questionable American
military goals in the Middle East is a fundamental distortion of the
Bank's mission, a violation of its founding Articles of Agreement, and a
reckless waste of donor resources."
The Bank has a policy called Procedure 2.30 ("Development Cooperation and
Conflict"), which states that to operate in a country emerging from a
conflict, the Bank must first prepare a "watching brief," develop a
transitional support strategy, begin transitional reconstruction, then
begin post-conflict reconstruction, and finally return to normal lending.
Unlike the Bank's Interim Office for Iraq, which is based in Amman,
Jordan, the soon-to-be-named country director would exclusively manage
Iraq for the Bank from Baghdad, according to GAP, which first leaked the
information, citing inside sources.
Other sources inside the Bank said talks with the new country director had
taken place in January and continued until earlier this month. They say
that a draft contract was being negotiated with the candidate who has some
experience in post-conflict regions and speaks some Arabic.
This development has reportedly upset some Bank board members and senior
staff who are concerned about staff safety and possible corruption given
the numerous reports of shoddy work, mismanagement and labour abuses by
private contractors hired to carry out major reconstruction projects in
When Wolfowitz was first appointed in June 2005, there was an outcry at
the board because of his close association with planning the Iraq war. For
the past year and a half, Wolfowitz has kept a relatively low profile on
the issue and tried to publicly tone down his ideological leanings.
Anticipating that Iraq could eventually take a more prominent role at the
Bank, the board has periodically issued official statements -- a highly
unusual measure -- telling Wolfowitz that they want to be updated on any
plans for Iraq.
The news that he is discussing a contract with a new country director has
caused those concerns to resurface.
Several board members declined on the record interviews for this article.
For the past three days, Dina el-Naggar, a World Bank media officer, said
she has not been able to arrange for World Bank officials working on Iraq
to respond to written questions submitted by IPS.
Some critics note that Wolfowitz has been trying to polish his name by
launching a widely publicised campaign against corruption in World Bank
projects, but now appears to be moving ahead with new projects in Iraq
despite ample evidence of wrongdoing there.
The World Bank has been involved through the Iraq Trust Fund, within the
International Reconstruction Fund Facility for Iraq, which has financed 15
projects worth 410 million dollars to improve education, health, household
data collection, irrigation and drainage, social protection,
telecommunications, urban infrastructure, and water supply and sanitation.
The Washington-based lender says it has also approved 275 million dollars
in International Development Association credits for education,
electricity and transport.
In May 2006, Joseph Saba, country director of the Middle East Department,
said the Bank was ready to strengthen its existing presence in Iraq, timed
with the advent of a new Washington-backed government.
The Bank at the time said it was looking into hiring a "volunteer",
meaning the job assignment will not be mandatory, to serve as Iraq country
director based in Baghdad's Green Zone.
But political chaos and lack of security have so far limited the plans
even though the Bank has promised that the new country director would be
guarded by a dedicated security team, including for occasional controlled
visits outside the Green Zone.
The Bank's operational work in Iraq has relied until now on a growing
cadre of professional Iraqi staff based in the country, regular meetings
with Iraqis outside of Iraq, use of the Bank's videoconferencing
facilities in Baghdad, and close support from the Interim Office for Iraq
The Bank has not had a major presence inside Iraq since a bombing on Aug.
19, 2003 claimed the life of a Bank staffer and those of 21 U.N. employees
at the U.N. headquarters in Baghdad.
Yet ever since he came to office in June 2005, senior Bank staff and some
board members have expressed fears that Wolfowitz's ideological leanings
would push the Bank towards more involvement in the controversial conflict
Some inside sources say that the 30-year World Bank veteran Christiaan
Poortman, who was vice-president for the Middle East, resigned last year
because he objected to Wolfowitz's directives to prepare to increase
lending and add staff in Iraq.
Edwards of GAP also points to the lack of a functioning system in Iraq
that could guarantee that the Bank loans or projects will be dealt with in
a transparent manner.
"In fact, the Bank is prohibited from operating in a conflict like this," said Edwards.
"In the simplest financial terms, there is no functioning banking system,
the government does not control its territory and it cannot guarantee loan
repayment. Any emergency or social funding in Iraq should come from
donors' grants, not loans."
Copyright © 2007 IPS-Inter Press Service