Wolfowitz to World Bank

[Roguish Lawyer]

What am I missing here? Are we going to take that money and focus it on AT? Or is he being sent to Siberia?

[jatx]

Near the end of grad school, I applied for a job at the World Bank. I believe that they have a very important mission in this world, and it is one of the few places where a wonky economist such as myself can get his hands dirty and make a difference.

After several rounds of interviews, I was told (none to discretely) that they didn't like my "demographics". Southern, white, male and conservative for those who haven't figured that out yet.

That came from a Pakistani female who was enjoying life in our capital city, living the American Dream and paying no federal income taxes! I think that Wolfowitz is exactly what they need, and from the internal email traffic that's been forwarded to me over the past few days, many there are sh#@ing the bed.

[The Reaper]

I don't get it either, but it sure made a lot of people angry.

Political payoff to someone?

TR

[Roguish Lawyer]

I have a friend who does World Bank deals. I'll have to ask him about this.

[The Reaper]

Already being compared to McNamara's appointment, but Wolfie couldn't be THAT bad.

TR

[NousDefionsDoc]

Does he have to be confirmed?

[The Reaper]

If he does by the World Bank members, we are in trouble.

US has 17% of the votes, Euros 30%.

TR

[Sacamuelas]

Does he have to be confirmed?
From a BBC report:

"Mr Wolfowitz must be formally approved by the World Bank's executive board.

US appointments to the World Bank presidency are usually unchallenged, as are European nominations to lead the International Monetary Fund.

The view in Washington is that the White House would not have announced the president's choice unless sufficient support had already been garnered behind the scenes, our correspondent says."

[Roguish Lawyer]

Everything I am reading says that this is huge because he's going to try to address corruption and make them spend the money on things that make sense. We're going to use World Bank money to win hearts and minds. :munchin

[DunbarFC]

It's like sending Fredo to work with Mo Green

[CRad]

he's going to try to address corruption and make them spend the money on things that make sense. We're going to use World Bank money to win hearts and minds.

Which to my thinking is a good idea. Some people don't like the guy but I do and think he'll be great at the job. Salon.com suggested that former Pres. Clinton or even Bono :rolleyes: would be a better choice. I think they are being short-sighted and missing some of Wolfowitz's strengths. Furthermore, it seems there are people who would have disliked anybody President Bush wanted for the job.

[Airbornelawyer]

One of the branches of the World Bank is MIGA, the Multilateral Investment Guarantee Agency. That agency's main purpose is to provide political risk insurance to private investors.

Political risk insurance is insurance against political risks. :D

Specifically, the risks they address are things like (i) foreign currency transfer risk (government restrictions that might prevent payments, profits, royalties and other remittances from being taken out of the country), (ii) expropriation risk (the risk that the government may simply take your property or earnings), (iii) breach or repudiation of a contract by the host government with the investor, and (iv) war and civil disturbance.

The US government has a similar agency, the Overseas Private Investment Corporation (OPIC). OPIC is a frequent target of critics of "corporate welfare" even though it is self-financed through the premiums paid by companies on their political risk insurance policies (in fact, it currently makes a profit for the Treasury). MIGA and OPIC are also included in the rogues gallery of evil corporate/government power by the WTO protester types.

What gets lost in the debate over corporate welfare and the like is the international security role played by MIGA, OPIC and other agencies which facilitate private investment in otherwise risky countries. Private investment is in many ways preferable to public development assistance, especially in terms of long-term opportunities rather than short-term aid ("teach a man to fish" and all that).

In a paper I wrote in law school on the national security aspects of OPIC and related agencies' mission, I noted that while such agencies are recognized as having an important foreign policy role, there is no policy coordination to ensure that they perform that role in the most strategically valuable way. Partly this is because of the fear of companies investing in such countries that they might be seen as an arm of US power and suffer retaliation (this is a justifiable fear: recall the attacks on Belgrade's McDonalds restaurant during the NATO bombing offensive in the Kosovo War).

But it does mean that the efforts of MIGA and OPIC are not always directed in the most effective manner. At the time I wrote my paper (2000), the largest site of OPIC risk insurance was Colombia, where it helped facilitate projects to get Colombians off the pipe - to build roads, factories and businesses, especially in coca-producing regions to give poor Colombians other opportunities than working for the cartels or helping the rebels. But the number two site for OPIC was, if I remember correctly, Nigeria or some other African country which, though of national security interest, was not "vital."

As of June 30, 2004, these are the top 10 recipients of MIGA guarantees, by gross exposure in the country: Brazil, Bulgaria, Romania, Mozambique, Russia, Bosnia and Herzegovina, Serbia and Montenegro, Argentina, Turkey and Ukraine. Does this list match what you might think of as the most important risks?

Brazil had $626 million in guarantees. Bulgaria had $353 million. Romania, $331 million.

Afghanistan now has about $5 million, and MIGA's "Afghanistan Investment Guarantee Facility" has a political risk insurance coverage capacity of only up to $60 million.

Iraq is not currently a member of MIGA, though MIGA participated in the donors'/lenders' conferences and is encouraging private investment. For the Middle East and North Africa as a whole, MIGA's exposure for guarantees was $243 million in 2004. Almost $100 million of that was in Syria, with almost all of the rest split among Algeria ($50 mil), Kuwait ($50 mil) and Jordan ($45 mil).

If Wolfowitz can make sure that the World Bank spends money and effort in ways that advance international security and prosperity, rather than simply react to the latest fiscal crisis in various countries, maybe the World Bank can do some good. There is always going to be a fringe who will vilify him and consider this proof of the evil neocon conspiracy, but they don't really matter.

[Roguish Lawyer]

Maybe they can issue policies for doing business in California . . . :D

AL, what are the other branches of the World Bank and what do they do?

[The Reaper]

AL:

I learn something every time you post.

Well done, Sir!

TR

[Airbornelawyer]

Maybe they can issue policies for doing business in California . . . :D

AL, what are the other branches of the World Bank and what do they do?

The World Bank Group has five branches.

- The International Bank for Reconstruction and Development (IBRD) is the original "World Bank," founded in 1945. It provides loans to developing countries.

- The International Development Association (IDA) provides interest-free credit and grant financing to the poorest countries.

- The International Finance Corporation (IFC) mainly provides capital and technical assistance for project financing.

- MIGA we already discussed.

- The International Centre for Settlement of Investment Disputes (ICSID) serves as a forum for arbitrating disputes between countries and foreign investors.

The IBRD and IDA together are the "World Bank" proper, and provide their assistance directly to developing countries. The IFC and MIGA provide assistance directly to private investors (in the form of loans, financing, insurance and technical assistance) to facilitate investment in developing countries.

Project finance, by the way, is basically capital financing for infrastructure projects where the revenue to repay the financing is generated by the project. It is the way large utilities, pipelines, mining projects, toll roads and sports stadiums are often funded.

[CRad]

rather than simply react to the latest fiscal crisis in various countries...


That and refusing to react to footage of "starving children that are being deprivedby US bullying" and insist on an accountability. He seems like a guy who can cut it on that account.

[Roguish Lawyer]

A friend of mine is an in-house lawyer at IFC (I didn't realize it was part of the World Bank). I'll see what he thinks, but he is a serious commie. :eek:

[The Reaper]

A friend of mine is an in-house lawyer at IFC (I didn't realize it was part of the World Bank). I'll see what he thinks, but he is a serious commie. :eek:

Now why does that not surprise me? :D

College buddy, or neighbor of yours?

TR

[Roguish Lawyer]

Now why does that not surprise me? :D

College buddy, or neighbor of yours?

TR

College buddy.

[The Reaper]

College buddy.

The State rests.

TR

[Roguish Lawyer]

The State rests.

TR

You are opposed to communicating with people who disagree with you? :munchin

[The Reaper]

You are opposed to communicating with people who disagree with you? :munchin

I don't keep people with a more tenuous grip on reality than myself around as friends, or request opinions from them.

TR

[Roguish Lawyer]

I don't keep people with a more tenuous grip on reality than myself around as friends, or request opinions from them.

TR

I think that is a mistake. Dude named Sun Tzu wrote:

Rouse him, and learn the principle of his activity or inactivity. Force him to reveal himself, so as to find out his vulnerable spots.

:munchin

[The Reaper]

I think that is a mistake. Dude named Sun Tzu wrote:

:munchin

So you agree with everything he wrote? :munchin

TR

[Roguish Lawyer]

So you agree with everything he wrote? :munchin

TR

Not necessarily, but a lot of it.

Do you know how many liberal judges I have to appear in front of? Do you think I should not try to understand where they are coming from so I can get them to do what I want?

[The Reaper]

Do you know how many liberal judges I have to appear in front of? Do you think I should not try to understand where they are coming from so I can get them to do what I want?

Do you enjoy that?

TR

[Roguish Lawyer]

Do you enjoy that?

TR

Getting them to do what I want? Yes.

Talking to liberals? No. And I don't do it much either. But maintaining contacts with people, whether you agree with their political views or not, is a good thing. You never know when you may need their help with something.

[Roguish Lawyer]

IFC Broadcast
03/17/2005 01:57 PM


To: IFC All Broadcast (HQ and COs)
cc:
Subject: Message from the Staff Association regarding staff interest in the presidential nomination


Dear Colleagues,

Over the past 24 hours, following the announcement of the candidacy of Mr. Paul Wolfowitz for president of the World Bank Group, the Staff Association has been hearing a range of views and concerns from many of you relating to this appointment and its implications for the World Bank Group and its mission.

While recognizing that the selection and confirmation of the next World Bank president is the prerogative of the shareholders, staff are asking that their views be taken into consideration and taken seriously by the decision-makers. The Staff Association is preparing to act as a conduit for these views, and the Executive Committee is urgently considering the most effective way to help staff be heard. A Staff Association delegation is meeting with Mr. Wolfensohn this afternoon, we are in touch with the Board, and we will get back to you as soon as possible on next steps.

Please be assured that the Staff Association is prepared to take action and work to ensure that staff views are heard.

Stay tuned!

Alison Cave
Chair
World Bank Group Staff Association

[Roguish Lawyer]

And here are my friend's comments:

I sense disbelief and outrage over the appointment. For example, the legal assistant nearby said she was devastated and would not show up for her 10 year picture with him (a WB tradition for employees). My view is irrelevant but this appointment will doubtless cause a great deal of turmoil within the institution (perhaps Bush's objective). But I do not think a stint facilitating arms sales to the Indonesia military and taking a plane ride over tsunami-devasted Sumatra demonstrates any particular expertise in the WB's mission - alleviating poverty. And his March 2003 testimony on Iraq speaks for itself.

But imagine what they must of thought of McNamara (and as far as I can tell, he is well revered around here these days). But then I wonder whether Wolfowitz will one day acknowledge that he too was "wrong, terribly wrong"...

Probably representative of others working there. Perhaps this is a giant enema for an organization that desperately needs it . . . :munchin

[Roguish Lawyer]

More intel:

March 28, 2005


Staff Comments on the Presidential Nomination
Last Monday, the Staff Association set up a confidential comment line to get a sense of staff views and concerns on the nomination of Paul Wolfowitz for World Bank President to help inform the decision of the Executive Directors. We sorted through the nearly 1,300 responses we had received as of noon on Wednesday, March 23rd. Briefing books have been prepared and were sent to the Executive Directors this morning. While the majority of respondents raised concerns about Bank reputation and effectiveness, the nominee's qualifications, multilateralism (Bank independence from US policy and the war in Iraq), the selection process and even the role of the Staff Association, approximately 8% of respondents were favorable or neutral to the appointment.

[Roguish Lawyer]

And more:

To: All Bank Group Staff
Subject: Board Unanimously Confirms Paul D. Wolfowitz as 10th President of the World Bank


The following news release has been issued by the Board of Executive Directors:

The Executive Directors of the World Bank met today to select a new President of the World Bank following Mr. James D. Wolfensohn's ten years of service as President of the World Bank. The Board expressed its deep appreciation for his outstanding leadership of the World Bank Group and for his passion for poverty reduction, the Bank's core mandate.

The Executive Directors unanimously selected Mr. Paul Wolfowitz, effective June 1, 2005, to succeed Mr. Wolfensohn as President of the World Bank, when the latter retires on May 31, 2005. As an international civil servant of a multilateral organization, the President of the World Bank is ex officio President of the International Development Association (IDA) and Chairman of the Board of Directors of the International Finance Corporation (IFC), the Multilateral Investment Guarantee Agency (MIGA), and the Administrative Council of the International Centre for Settlement of Investment Disputes (ICSID).

Prior to the selection of the President, Executive Directors had discussions with Mr. Wolfowitz on issues related to the Bank's policies, programs and ongoing mission of poverty reduction. Issues discussed by Executive Directors included development strategy; the Bank's role and multilateral character; synergies within the Bank Group; the financial sustainability of IBRD and IDA; the focus on development results and governance issues, including the fight against corruption; and issues related to the Bank's organization and effectiveness, including the diversity of management and staff, and the process of selecting the President.

Mr. Wolfowitz, a United States national, currently serves as U.S. Deputy Secretary of Defense. He was previously Dean and Professor of International Relations at the Paul H. Nitze School of Advanced International Studies (SAIS) of The Johns Hopkins University. He held a number of significant posts within the U.S. government. In addition to U.S. Deputy Secretary of Defense, he served as Under Secretary of Defense for Policy, U.S. Ambassador to Indonesia, and as Assistant Secretary of State for East Asian and Pacific Affairs. Mr. Wolfowitz has also served as Head of the U.S. State Department's Policy Planning Staff, as Deputy Assistant Secretary of Defense for Regional Programs and in the Arms Control and Disarmament Agency, as well as in the US Bureau of the Budget. He taught previously at Yale (1970-73) and John Hopkins (1981). Mr. Wolfowitz has received numerous distinguished government service awards.

Mr. Wolfowitz has a doctorate in political science from the University of Chicago.

In response to the Board's decision, Mr. Wolfowitz made the following statement:

"I want to thank the Board for their vote of confidence. It is humbling to be entrusted with the leadership of this critically important international institution. Fortunately, I already know I will have a great deal of help from the many people who are deeply committed to the mission of the World Bank. Since my nomination, I have had the opportunity to listen and talk with all 24 Executive Directors, who themselves possess deep knowledge across the broad range of issues facing the Bank.

Yesterday, in Brussels, I had discussions on the Bank's future with the Development Ministers from Denmark, Germany, the Netherlands, Norway, Sweden and the UK. This was followed by a broader meeting hosted by Prime Minister Juncker of Luxembourg with more than 25 European Union representatives. Their advice and questions were constructive, and I know they will continue to provide valuable guidance as I begin my tenure as an international civil servant.

I have also exchanged views with dozens of ministers, ambassadors and even Presidents and Prime Ministers, from every continent. I appreciate their support and their commitment to the vision of the World Bank. As I have said frequently, that mission – helping the poorest of the world to lift themselves out of poverty – is a noble mission or, as former Secretary of State George Shultz said, "a beautiful mission."

I believe deeply in that mission. Nothing is more gratifying than being able to help people in need and developing opportunities for all the people of the world to achieve their full potential.

I would like to take this opportunity to express my appreciation to Jim Wolfensohn who has been extremely helpful to me. His commitment to the Bank's mission will be a hard act to follow and I will be counting on his continued advice and support.

I look forward now to deepening my understanding of the challenges facing the Bank through exchanging views with two key groups: the civic society organizations whose advice and views have become increasingly important in Bank deliberations; and the extraordinary professional staff of the Bank, who constitute the richest body of expertise in the world on the problems of economic development and poverty reduction.

The next six months are a key period of decision making on international development policy, particularly leading up to the UN Summit in September on the Millennium Development Goals.

Beyond the Development Goals, I have been provided with a wealth of advice and information. I have a new appreciation for the urgent need for debt relief, infrastructure and regional integration if poverty is to be reduced. My new colleagues have recommended I review the right balance between loans and grants; the Bank's role as lender versus technical advisor; lending to middle income countries versus support for the poorest nations; and timely, high quality delivery of financial support versus the need for conditions, accountability and safeguards.

Finally, many of my colleagues have pointed out that reducing poverty involves more than the commitment of the Bank's loans and grants. Trade polices and subsidies along with positive conditions for private sector investment are all key factors influencing prospects for the poor.

These are just a few of the challenges which lie ahead. As we take on these concerns, I am excited about the strong contribution the Bank can and must make if we are to create a new era of opportunity for the world's poor.

I look forward to working with the talented Bank staff, all shareholders and supporters as we join together in our noble mission."

President Jim Wolfensohn also commented:

"I welcome the decision of the Board to appoint Paul Wolfowitz as the next President of the World Bank Group. He is a friend, and I know him to be a person of immense talent and high intellect. He will be an extremely dedicated and strong leader of the Bank. Paul has a long and respected background in academia, diplomacy and international affairs, and his work in the developing world has afforded him a deep understanding of the many challenges of development. He knows what a remarkable institution this is, he appreciates its outstanding team of development professionals, and I know he will bring continuity to its programs and its mission of fighting poverty. I will make every effort to ensure that our transition period is successful, so Paul can hit the ground running on June 1."