World Bank finalises anti-graft strategy

WASHINGTON – The World Bank and member countries are close to agreement on a major accord to combat corruption after months of tension over how best to tackle the issue in developing countries.

Stamping out corruption has been a top priority for World Bank head Paul Wolfowitz, who has been at the helm of the development agency for a year and has argued that graft is one of the biggest threats to its efforts to alleviate poverty. At issue was how the World Bank would respond to evidence of corruption.Many members had been fearful of the idea that this could lead to development aid being halted or projects cancelled.World Bank officials said Wolfowitz and member countries were close to agreement after meetings last week, and a strategy would be presented to the World Bank’s board of governors at meetings of the International Monetary Fund and World Bank in Singapore in two weeks.Member countries, fearful from the start of Wolfowitz’s tenure that he would impose Bush administration policies and strategies on the bank, had challenged his abrupt suspension of several programmes.The members argued that instead of suspending projects or delaying debt relief to get governments to act against corruption, Wolfowitz should work with developing countries to correct the problem while allowing the benefits to continue to flow to the poor.In one of the biggest clashes over the bank’s anti-corruption drive, Britain criticised Wolfowitz’s decision to delay lending to health programmes in India, some also funded by the British government.India, which is the bank’s largest borrower, said the bank’s action to withhold the programmes on grounds of collusion and corruption in procurement was unfair, arguing it was holding up delivery of health services to the poor.The World Bank resumed lending for the projects on August 22 after the bank was satisfied that more oversight of procurement in the health sector was in place.Many of the disagreements over the bank’s anti-corruption tactics have played out behind closed doors, with governments nervous about being seen as too lenient or accepting of corruption.World Bank board officials, who spoke on condition of anonymity, said consensus over details of the strategy confirms that the bank’s work in developing countries must also address corruption and strengthen effective governance.One official said the agreement amounts to a partnership and greater trust between the board of executive directors and Wolfowitz, rather than an adversarial relationship.”I think Wolfowitz has come far since the beginning of the year when he went forward on his own and got into a big fight with the board,” said one official.The official said some issues in the new anti-corruption strategy remain unresolved, such as whether the board has a clearly defined role in decisions on corruption.Board members concede there is lack of clarity among themselves about their authority over bank operations and whether exerting more control would amount to micro-managing.Nampa-ReutersAt issue was how the World Bank would respond to evidence of corruption.Many members had been fearful of the idea that this could lead to development aid being halted or projects cancelled.World Bank officials said Wolfowitz and member countries were close to agreement after meetings last week, and a strategy would be presented to the World Bank’s board of governors at meetings of the International Monetary Fund and World Bank in Singapore in two weeks.Member countries, fearful from the start of Wolfowitz’s tenure that he would impose Bush administration policies and strategies on the bank, had challenged his abrupt suspension of several programmes.The members argued that instead of suspending projects or delaying debt relief to get governments to act against corruption, Wolfowitz should work with developing countries to correct the problem while allowing the benefits to continue to flow to the poor.In one of the biggest clashes over the bank’s anti-corruption drive, Britain criticised Wolfowitz’s decision to delay lending to health programmes in India, some also funded by the British government.India, which is the bank’s largest borrower, said the bank’s action to withhold the programmes on grounds of collusion and corruption in procurement was unfair, arguing it was holding up delivery of health services to the poor.The World Bank resumed lending for the projects on August 22 after the bank was satisfied that more oversight of procurement in the health sector was in place.Many of the disagreements over the bank’s anti-corruption tactics have played out behind closed doors, with governments nervous about being seen as too lenient or accepting of corruption.World Bank board officials, who spoke on condition of anonymity, said consensus over details of the strategy confirms that the bank’s work in developing countries must also address corruption and strengthen effective governance.One official said the agreement amounts to a partnership and greater trust between the board of executive directors and Wolfowitz, rather than an adversarial relationship.”I think Wolfowitz has come far since the beginning of the year when he went forward on his own and got into a big fight with the board,” said one official.The official said some issues in the new anti-corruption strategy remain unresolved, such as whether the board has a clearly defined role in decisions on corruption.Board members concede there is lack of clarity among themselves about their authority over bank operations and whether exerting more control would amount to micro-managing.Nampa-Reuters