WB Announces New Anti-Graft Drive

WASHINGTON ~ World Bank (WB) president Paul Wolfowitz says he has altered his controversial drive to root out corruption in the bank’s lending after a chorus of criticism from both rich and poor nations.

Wolfowitz, chastened by demands from leading donors to go back to the drawing board, said he had consulted widely with governments and civil-society groups to ensure the poor do not suffer from his campaign.

“I guess in some ways it was almost surprising how strong the consensus was” in favor of his new anti-corruption campaign, he told reporters on a conference call after presenting the results of the extensive consultation to the World Bank board on Tuesday.

At the bank’s annual meeting in Singapore in September, Wolfowitz was admonished by several European countries and by developing nations for putting the anti-corruption initiative ahead of the needs of the poor.

Countries like Britain, France and Germany were all wary about attaching restrictive conditions to the World Bank’s multibillion-dollar development assistance.

Wolfowitz did win the backing of US Treasury Secretary Henry Paulson, who described corruption as “probably the cruelest” tax imposed on a country’s population.

Wolfowitz’s plan would link World Bank financial aid to commitments by beneficiary countries to good governance, such as transparency in public procurement, and anti-graft measures.

But the former US deputy defense secretary said his consultation showed that it was possible to marry clean lending with anti-poverty work.

“The bank should strive to stay engaged even in poorly governed countries,” he said, stressing: “Don’t let the poor pay twice.”

The revised anti-corruption strategy will be debated in Washington in mid-April, when the World Bank and International Monetary Fund hold their spring meetings.

Eckhard Deutscher, Germany’s representative on the World Bank board, said it should then be adopted before the end of the bank’s fiscal year in June.

At Tuesday’s board meeting, he said, there was “broad agreement that the bank is addressing the concerns that were raised in the annual meeting in Singapore.”

Wolfowitz said he was now committed to working with “governments but engage more with the private sector, civil society and media.”

He would also work “to strengthen rather than bypass country systems” and boost coordination with donors.

“The bank should not act alone,” Wolfowitz said.

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