23 March 2007
President Wolfowitz announced that all 24 members of the Board of Directors at the World Bank approved the new GAC strategy set to rid corrupt and fradulent practices from its lending portfolio.
President Wolfowitz took on the task of rooting out corruption as one of the cornerstones of his presidency when he took office in June 2005. There appeared to be complete support of Wolfowitz's plan from other Bank staff, until he began suspending loans for entire countries, in what some claimed was an ad hoc fashion.
He has since been criticized as having no definitive way of evaluating loan suspensions. Bank officials claimed to be concerned that Wolfowitz's frivolous financial suspensions was harming the poor in the developing nations, more than those engaging in corrupt practices.
Critics believe that the new GAC strategy is much weaker than what Wolfowitz originally proposed. The latest iteration of the strategy states that the Bank is committed to engaging with countries, even when corruption is present. "It is important to stay engaged in countries with poor government to help them improve and develop a strategy for success," Wolfowitz said. The draft declares that corruption will be addressed on a project to project, company to company basis, as opposed to suspending finances for entire countries. In response to the latest version of the draft, Manish Bapna, Executive Director of the Bank Information Center says, "This was most definitely a pyrrhic victory. Wolfowitz has emerged with a strategy that reflects little of what he originally proposed."
The paper will be presented in mid-April at the Spring Meetings of the World Bank and IMF in hopes of gaining the approval of the bank's steering committee and having the provisions operationalized by the end of the fiscal year in June 2007.
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- World Bank fully endorses anti-corruption strategy, Lesley Wroughton, Reuters, March 20, 2007 (Reuters website)
- World Bank revamps anti-corruption policies, Associated Press, March 20, 2007 (International Herald Tribune website)
- World Bank Revises Loan Strategy, Steven R. Weisman, New York Times, March 21, 2007 (New York Times website)
- World Bank Anticorruption Drive Blunted as China Threatens to Halt Loans, Richard Behar, FOX News, March 26, 2007 (FOXNews website)