Wolfowitz Corruption Push Clashes with Debt Relief Paul Wolfowitz was one of the leading backers of going to war in Iraq. Now, as head of the World Bank, he faces almost as much controversy by moving to suspend bank aid to poor countries that don't do enough to fight corruption.
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Wolfowitz Corruption Push Clashes with Debt Relief

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Wolfowitz Corruption Push Clashes with Debt Relief

Wolfowitz Corruption Push Clashes with Debt Relief

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When he was a deputy secretary of defense, Paul Wolfowitz was a leading advocate for the Iraq war. His enthusiasm for that cause made him an early target of opponents of that war. In 2005, President Bush named Wolfowitz as the U.S. choice to head the World Bank. But fighting poverty cannot be almost as controversial as waging war. Today, we have the first of two reports on the Wolfowitz tenure at the World Bank.

NPR's Tom Gjelten explores how the former Pentagon intellectual is once again creating a stir.

TOM GJELTEN: Paul Wolfowitz is a man with big bold ideas. While at the Pentagon, he confidently argued that the overthrow of Saddam Hussein could produce a wave of democracy across the Middle East and a new attitude toward the United States in Iraq.

Mr. PAUL WOLFOWITZ (President, World Bank): I am reasonably certain that they will greet us as liberators.

GJELTEN: After the situation in Iraq began to deteriorate, Wolfowitz moved to the World Bank, where he pushed another big idea - that a way to end poverty in the developing world is to go after corruption. It was a point he made in speech after speech.

Mr. WOLFOWITZ: Today one of the biggest threats to development in many countries is corruption.

GJELTEN: Corrupt governments, Wolfowitz argued, do not work, and the loans and grants that go to them are often misspent. When corruption is widespread in a country, businessmen don't invest and the economy doesn't grow. If the World Bank is to fight poverty in those countries, Wolfowitz said, it must first help them get rid of corruption.

He wasn't the first World Bank president to make that point. Wolfowitz's predecessor, James Wolfensohn, said a decade ago that corruption had become a cancer in the developing world. But Paul Wolfowitz went much further. In the first year of his presidency he moved on his own over the objections of professional bank staff to cut off support for countries he regarded as too corrupt. One of them was the Republic of Congo.

(Soundbite of birds chirping)

GJELTEN: Nearly 70 percent of the population in this former French colony subsists on less than a dollar a day. After three devastating wars in the 1990s, the public institutions in Congo are in terrible shape. At this secondary school in the capital, Brazzaville, there are no toilets, no textbooks, no paper and no pencils.

On exam day the teacher writes the questions on the blackboard and the students write answers in notebooks they have brought from home. The students, 14 and 15 years old, sit on benches behind long wooden planks on which they do their writing. They are squeezed elbow to elbow. The students in the back row strain to see the board.

Mr. ERNEST MANDATIRI(ph) (Director of Studies): (Through translator) One hundred and nine students.

GJELTEN: Ernest Mandatiri, the director of studies at this school, explains that this history class is actually one of the smallest in the school.

Mr. MANDATIRI: (Through translator) You're lucky to have come to this class where we have 109, but in the first (unintelligible) secondary school we have more than 200 students in a class.

GJELTEN: Where do they sit?

Mr. MANDATIRI: (Through translator) They sit on the floor.

GJELTEN: This is the face of poverty in Congo. But at the same time, the overcrowding in this classroom in Brazzaville is a consequence of corruption. In truth, there are enough teachers on the payroll in Congo to staff the schools properly. The problem is that fully a third of the teachers have essentially abandoned the school system even while continuing to collect paychecks. They're occupying salary slots that could go to people who are actually willing to teach.

It's one small example of the corruption that pervades public administration in Congo, and it raises an important question. Is Congo corrupt because it's poor and underdeveloped, or is it maybe poor because it's so corrupt?

(Soundbite of car horn)

GJELTEN: By some measures Congo is, or should be, a wealthy country. More than 250,000 barrels of oil are produced each day in the oil platforms offshore the city of Point-Noire on Congo's south Atlantic coast. At more than $60 a barrel, all this oil should give the Congolese government here resources to help lift its people out of poverty.

Mr. CHRISTIAN MOUNZEO (Activist): (Speaking French)

GJELTEN: Christian Mounzeo is an anti-corruption activist here in Point-Noire. He argues that the most serious problem in Congo is that much of the country's oil money disappears into the pockets of corrupt officials, with no one knowing where it's going or being able to do anything to find out.

Mr. MOUNZEO: (Speaking French)

GJELTEN: It must be said that all the problems we face, Mounzeo says, are tied to this fight against impunity, against corruption, and against the lack of transparency in government.

So what should international aid agencies do about a place like Congo? This is where the Wolfowitz agenda at the World Bank gets complicated.

Early last year, the professional staff of the World Bank and the International Monetary Fund concluded that Congo met the initial requirements for debt relief, meaning that much of its foreign debt could be forgiven if it implemented key reforms. But then Paul Wolfowitz stepped in and said Congo did not deserve to have its debt forgiven because of the corruption in its government. Christian Mounzeo and other anti-corruption activists in Congo applauded, but the bank and IMF staff who had been working with Congo were outraged by Wolfowitz's intervention.

European governments represented in the World Bank board of directors rose up unanimously to challenge him. He wanted to change the rules in the middle of the game, says a French government official, who asked to remain anonymous while discussing the Congo negotiations. He said the board told Wolfowitz you cannot work like this.

The Congolese minister of communications, Alain Akwala(ph), says his government deserve to be treat with more respect.

Mr. ALAIN AKWALA (Minister of Communications): (Through translator) The World Bank under Mr. Wolfowitz's management is bullying us. They should be helping us, not pointing fingers at us as if we were a little black sheep. When you listen to some of these people talk about our country, you get this feeling they see us Africans as a bunch of dictators and butchers.

GJELTEN: In the end, Wolfowitz backed down and allowed Congo's debt relief to go forward. The fight, however, marked a turning point in his relations with European governments. They began demanding that Wolfowitz consult with them before taking precipitous action. Wolfowitz also strained his relations with the bank's professional staff. Veterans grumble that by pushing the institution to focus so heavily on corruption issues, he was neglecting the bank's core poverty-fighting mission.

Dennis de Tray left the World Bank last year after more than 20 years directing programs from Indonesia to Latin America.

Mr. DENNIS DE TRAY (Former Director, World Bank): The World Bank is a development institution, not an anti-corruption institution. It's not a police force. It's not a keeper of moral standards.

GJELTEN: The De Tray view, shared by many, probably most, development professionals at the World Bank, is a direct challenge to Paul Wolfowitz's agenda. Conflict between him and the staff was inevitable. Two years into his term at the bank, the institution is now in turmoil and Paul Wolfowitz himself is at the center of the controversy.

That story tomorrow.

Tom Gjelten, NPR News.

MONTAGNE: And you can learn more about the Republic of Congo's economy plus Paul Wolfowitz's tenure at the World Bank at npr.org.

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