Archive | February 18, 2012

What Next World Bank!

What Next World Bank!

By Hwaa Irfan

Breaking headlines Robert Zoellick’s announcement that he would be stepping down as 11th president of the World Bank is more to do with the Establishment fears over the world economy, fears that probably lie behind Zoellick’s decision to leave with a ‘good track record.’  As a neoconservative, a globalist,  and a former high level official of the Bush Administration Zoellick commented:

“The bank is now strong, healthy and well positioned for new challenges, and so it is a natural time for me to move on and support new leadership.”

Nominated for the position by former U.S. president G. W Bush, and supported by Germany, Zoellick whose family is of German origin took up his position in 2007. Not an enviable position to head the World Bank, though Hilary Clinton has had an eye on the position for some time, Zoellick was from The Establishment, acted on behalf of The Establishment,  and got full support from The Establishment, which makes the job much more navigatable. One could leave Zoellick to apply and maintain their Agenda as a key member of the Trilateral Commission (which controls everything else), a signatoree of the January 26, 1998 Project for the New American Century, Deputy Chief of Staff at the White House, former vice-chair of International of the Goldman Sachs Group, Managing Director, and Chair of Goldman Sachs’ Board of International Advisors, and Executive Vice President of Fannie Mae. Zoellick also recieved the the Knight Commanders Cross from Germany.

Zoellick’s decision to stand down comes at time of increasing uncertainty, as he aknowledged in his speech in September 2011 at the George Washington University. Zoellick has observed:

“The ground is shifting under our feet.”

That the rich world can no longer pretend that it has all the answers, and as economic and political power moves towards ‘developing’ countries it is time for those countries to be seen as partners and not as wards of rich nations.

But as the coporate media looks at Zoellick’s acheivements, there is no reason to even consider that the common man, woman, and child will fare any better than they did under Zoellick’s presidency when the imperialistic mentality of the main contributors to The Bank.

The World Bank

The presidency of the World Bank or more correctly the International Bank for Reconstruction and Development (IBRD) has always been held by a U.S. national, as the IMF has always been a European thus ensuring imperial domination of the global economy. Based in Washington, the World Bank was initially established to rebuild Europe after WWII.

The main contributors are France, Germany, Japan, the U.K., and the U.S., and decide where the money goes each with a representative on the board of executive directors. The 187 member countries (182 only have 19 votes for representation amongst them) are shareholders with an admin budget of U.S$.2bn, 10,000 staff, the World Bank gave loans and grants in 2011 to the tune of U.S$.57bn. According to the World Bank, it raises money by selling AAA-rated bonds on the worlds financial markets. Their bonds are bought by both private and institutional investors. Then there are the net earnings from The Bank’s assets.

Who has the Bank Helped

The Bank has helped formerly classified 3rd World countries to remain poor, and just as there is no responsible accounting for the money it lends, on the part of The Bank itself, and the recipient countries, The Bank continues to lend in questionable situations, which points to another agenda. Examples include Guyana, Liberia, Peru, Nicaragua, and Syria that have all defaulted on loans received in the past. So who/what is The Bank really helping?

It is usually the borrower, not the lender that makes an application. It is with much intrigue that one observes the reverse has The Bank presented itself on more than one occassion as the solution to Egypt’s Arab Spring. Let us be reminded that WWI and WWII was fought for control of the world’s naturals resources, and continue to be reminded:

The Third World remains poor because the powerful strive to dominate every choke-point of commerce. One key choke-point is political control through the “co-respective” support of local elites. Where loyalty is lacking, money will be spent to purchase it. If a government cannot be bought or otherwise controlled, corrupt groups will be financed and armed to overthrow that government and, in extreme cases, another country will be financed to attack and defeat it.… The pattern has been well established repeatedly throughout history and throughout the world, as noted by the well-known philosopher Bertrand Russell,

An enormous proportion of the income of nations and individuals, nowadays, is blood money: payment exacted by the threat of death. Therefore the most prudent nation is the nation which is in the best position to levy blackmail.…Modern nations are highwaymen, saying to each other “your money or your life,” and generally taking both.” – J.W. Smith, The World’s Wasted Wealth 2, (Institute for Economic Democracy)

The World Bank and Land Grab

As much as The Bank warned the world about the ethics of land grab, The Bank has played a major role in perpetuating this form of neo-colonialism that has uprooted and has disposed thousands of people in Africa, Asia and The Americas. In order to sustain the wealth of vulture investors, not only have thousands of people been deprived of a place to live, and a sustainable life, but the very land grabbed only benefits the investor. In the process land fertility is reduced to povide cash crops and biofuels for rich countries.

This is in fact not much of a departure from the pre-Zoellich era when in the 1970s The Bank financed barbaric policies that led to the deaths of tens of thousands of boat people in the Sotuh China Sea. The mechanism was a U.S$60mn loan to the Vietnamese government when they had organized massive concentration camps. The loan was to finance an irrigation project, much like the loan to be given to Egypt’s irrigation project in 2012. The reality was the creation of agricultural settlements where 4- 5 million people were to be resettled, and led to farmer rebellion. Those farmers who resisted were sent packing quite literally in leaky boats of whom thousands drowned. The Bank continued to give loans until the U.S. Congress said otherwise.

The same again happened with Ethiopia, and is happening again now under land grab. Back then, it was in the middle of a famine in the mid 1980s. Heavily financed by The Bank, the forced resettlement program killed more people than the famine.

The World Bank and the Environment

The Bank has been behind the financing of roads in Brazil that has led to the deforestation of the Amazon at a rate of 137 species from the plant, animal and insect kingdom a day is being lost to humankind. Twenty-five percent of Western pharmaceuticals is derived from these rainforests, and 74% of plant-derived compounds in current use globally comes from research based on the ethnobotanical knowledge of indigenous peoples. The Bank financed controversial building of hydroelectric projects including U.S$450mn in a country that has no respect for the indigenous peoples it disposes. From deforestation in Brazil the size of the U.K., to desertifcation the size of Texas in Botswana, Africa causing death of thousands of animals, and unsustainable living conditions for the people.

There’s a ‘whiff of hypocrisy’ to rich countries’ advice, he said. ‘When [advanced] countries with large fiscal deficits preach fiscal discipline to poor countries—what are they really saying?’” Zoellick told the Washington Post in September 2011.

That ‘whiff of hypocrisy” underlies all loans made to developing countries but beyond a whiif, it is a crime against humanity. As the International Criminal Court of Justice preoccupies itself with the task of criminalizing African leaders who lean in favour of a people’s democracy, we end with a Class Action suit in the case of Chad:

The year 2000 witnessed the beginning of the construction of the Chad-Cameroon pipeline, an important pipeline for the then 5th poorest country globally, and land-locked Cameroon. The Bank’s contribution was just 4%, and backing to multinational oil companies to raise money on the market.

By June 2003, oil was flowing.

By 2005 it was quite evident that World Bank backing consisted of agreements that was as usual leading to human rights abuses by the Chad and Cameroon governments, and allowing the multinational oil companies to remain unaccountable for their actions, e.g the fishermen, and farmers were denied access to water and land, and anyone who questioned this was arrested and incarcerated.

By 2008 the World Bank closed the Chad account, and took 10% of the oil revenue apparently for the future generations ignoring the government’s call to fight against poverty at the time from what they had a right to; when the regional development plan ensured 5% for those who have been affected by the project. The World Bank could do so becuase the Chad government agreed to a “revenue management plan” which meant that revenue from the oil was put into an offshore account, audited by an Independent Revenue Oversight Committee.

At what point do the future generations begin is none too clear 1 years later when the Independent Evaluation Group (IEG) at the World Bank carried out a performance report that only stated what everyone else new at the time as:

“ Jointly, civil society organizations from both Chad and Cameroon demand without delay an independent audit of the environmental and social COSTS Of THE PROJECT IMPOSED ON THE COMMUNITIES IN THE OIL PRODUCING REGION AND ALONG THE PIPELINE ROUTE and ask for reparation.” – Group Tchad

According to the Center of Energy Economics:

“ Ten percent of royalties and dividends (representing about 85 percent of expected revenues over the first ten years of production) are to be invested with an external financial institution in long-term investment instruments, representing the “Future Generations Fund.”

The question remains, what happened to the 10% of oil revenues that The Bank took following The Bank’s 2008 statement that:

“Chad has now fully prepaid both the IBRD and IDA components of the loan, as of September 5, 2008.”

Banking on the Colonial Past

Quite literally this is how rich countries maintain their imperial position as their colonial debts were transferred to become the responsibility of the former colony at very high interest rates. Haiti is a modern day example of this transaction.

“Freedom was acknowledged at the price of a huge ransom. On July 11th 1825, under threat of an expedition equipped aboard 14 vessels armed with 500 cannons, Haitian leaders were forced to sign a treaty with the king of France, Charles X. The King proclaimed by royal decree that the current inhabitants of the French part of Saint Domingue would pay the French Federal Deposit & Consignment Treasury in five equal terms for each subsequent year the amount of one hundred fifty millions francs. The first payment was due on December 31st, 1825 to compensate former colonizers who claimed loss and suffering. “We concede, under the stated conditions, as per the decree, that the current inhabitants of the French part of Saint Domingue to have full  and complete independence of their government.”

Haiti had to pay France 150 millions gold francs as ranson, which later became 90 million or U.S$21bn. Haiti was the richest of the Caribbean islands, and kept paying until 1888 its exploiters for being exploited until it can hardly stand on its own two feet.

So naturally for globalist, Zoellick current president of the World Bank, globalization, or neoimperialism represents the only way, there is no alternative as stated in his 2001 speech at the Heritage Foundation. Zoellick warned developing countries recently about the impending recession:

Among other things, developing countries “could help by avoiding entering into trade disputes and by allowing market prices to move freely.”

As critics call for the U.S. to not monopolize the impending vacancy for the presidency of the World Bank, the issue is not the World Bank, but the 187 countries that supply the means for the World Banl to continue exploiting and impoverishing the natural and human resources of other countries for the benefit of the major imperial powers.

Sources:

“Biography.” http://web.worldbank.org/WBSITE/EXTERNAL/EXTABOUTUS/ORGANIZATION/EXTPRESIDENT2007/0,,contentMDK:21394208~menuPK:64822289~pagePK:64821878~piPK:64821912~theSitePK:3916065,00.html and http://go.worldbank.org/IHDUWCAI20

Bovard, J. “The World Bank Vs. the World Poor.” http://www.cato.org/pubs/pas/pa092.html

Bureau of Economic Geology, Jackson School of Geosciences. “The Chad-Cameroon Pipeline.” http://www.beg.utexas.edu/energyecon/new-era/case_studies/Chad_Cameroon_Pipeline.pdf

Group Tchad “The World Bank Group and the Chad-Cameroon Oil & Pipeline Project.” http://www.bicusa.org/en/Document.102151.aspx

Patrick, S.M. “Global Paradigm Shift: The Wisdom of Robert Zoellick.” http://blogs.cfr.org/patrick/2011/09/27/global-paradigm-shift-the-wisdom-of-robert-zoellick/

“Robert Bruce Zoellick” http://www.sourcewatch.org/index.php?title=Robert_Bruce_Zoellick

Mungcal, I. “World Bank President Robert Zoellick Announces Plans to Step Down.” http://www.devex.com/en/blogs/the-development-newswire/robert-zoellick-to-step-down-june-30

“World Bank Statement on Chad-Cameroon Pipeline.” http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/AFRICAEXT/CHADEXTN/0,,contentMDK:21894530~menuPK:349894~pagePK:2865066~piPK:2865079~theSitePK:349862,00.html

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