by Shalmali Guttal*
When the Bush Administration nominated its Deputy Defense Secretary Paul Wolfowitz for the presidency of the World Bank in March this year, many World Bank watchers reacted with shock. Outrage against Wolfowitz’s nomination was certainly to be expected from the left and the global peace and justice movement. But this was beyond the pale for even liberal academics, the international press and much of the leadership of “old Europe” (with the exception of Tony Blair), who found it inexplicable that the US would take the bold step of nominating one of the chief architects of the US war on Iraq as the head of the world’s largest development financier.
The disqualifying marks against Wolfowitz’s ability to lead the World Bank were many and included his reputation as a belligerent Pentagon hawk, his central roles in planning and overseeing the Gulf War and the invasion of Afghanistan and Iraq, his disregard for internationalism, human rights and democracy, and his proclivity to reward loyalty to the US’ invasion of Iraq with lucrative commercial opportunities. His support for the military dictatorships of Marcos in the Philippines, Chun Doo Hwan in South Korea and Suharto in Indonesia is no secret. Renowned economists such as Joseph Stiglitz, Jeffrey Winters and even Jeffrey Sachs joined Bank watchers in decrying Wolfowitz’s lack of training and experience in economic and financial policy, development planning, financial markets, trade, and social issues such as health, HIV-AIDS, education, water and sanitation, all of which are upheld by the Bank as central to the global fight against extreme poverty.

Widely regarded as one of the core members of the US neo-conservative intelligentsia and one of the most hawkish members of the Bush administration, Wolfowitz served in key political positions under the Reagan, Bush Senior and Bush Junior Administrations. Many voiced the concern that under Wolfowitz’s watch, the World Bank would become an explicit instrument of US foreign policy and that it was only a matter of time before Wolfowitz started to steer the Bank in the direction of US interests through Bank policies, staff deployment and financing.
Amid the blaze of attention on how unsuitable Wolfowitz was for the job, a few voices pointed to a more fundamental issue: the fact that developing countries, who borrow from the World Bank and who have to bear the brunt of Bank policies and conditionalities, have absolutely no say in who heads up the institution. As the World Bank’s largest shareholder, the US traditionally chooses the World Bank President while it allows the Europeans to nominate the head of the International Monetary Fund (IMF). Dismaying as the choice of Wolfowitz was, it came as no surprise to most Southern analysts that the Bush Administration would exert its muscle to ensure that the Bank more increasingly and compliantly carry out American dictates.
The international press drew parallels between Wolfowitz and Robert McNamara, another erstwhile Pentagon hawk, who was forced by the Johnson Administration in 1968 to relinquish his post as US Secretary of Defense and put in charge of the World Bank. McNamara’s transfer was widely regarded as a diplomatic manoeuvre by a beleaguered US President to deflect national and world attention away from McNamara’s role in planning and leading the US’ disastrous and unpopular war on Vietnam.
So why was Wolfowitz–the man most associated in the Bush Administration with spinning a phony case against Saddam Hussein and his supposed weapons of mass destruction, manipulating US public opinion, poor judgment about how the Iraqi people would react to the invasion and occupation of their country, political and military failures in Afghanistan and Iraq, and diminishing US credibility overseas–handed such a plum international position? Well, for starters, Wolfowitz’s nomination as World Bank President was not a face saving bid by the Bush Administration. Rather, it was a calculated move to ensure that the US is able to continually secure its economic and geopolitical interests even as it plays the game of multilateralism. For what the US wants the World Bank to do, Paul Wolfowitz is an eminently suitable boy for the job
Located a few blocks from the White House, the World Bank and IMF have long been Washington’s preserves in terms of economic and financial policy, operations, governance and management. US professionals (approved by the US Treasury of course) account for at least a quarter of senior management and higher-level professional staff. Regardless of claims of autonomy and independence, the Bank and Fund have consistently proven themselves to be affiliated to US policies and interests. Since the early 1990s, these interests have come together in a global project that has been in existence for over 50 years, but has acquired a more identifiable shape since the collapse of the Soviet block at the end of the 1980s: post-war reconstruction.
The US’s first official foray into external post-war reconstruction was through the Marshall Plan that came into effect immediately after the Second World War, and which laid out an elaborate plan, replete with financing, for the post World War 2 reconstruction of Europe. Since then, US talent and capacity for defining post-war reconstruction has expanded considerably, perhaps best showcased today in Afghanistan, Iraq and Haiti. The World Bank also got its head-start in post-war reconstruction in relation to World War 2 Europe as the International Bank for Reconstruction and Development (IBRD), charged with channeling the resources for and overseeing the reconstruction of war-torn Europe. Like the US, the Bank has also expanded its talent and capacity for reconstruction through its “post-conflict reconstruction” programme, although the Bank’s ambit runs wider and includes countries emerging from and/or in the grips of ongoing wars and violent conflicts (such as Rwanda, Afghanistan, Iraq, Haiti and Cambodia) as well as those “in transition” from communist to market economies (such as the Lao PDR, Vietnam, Kazakhstan and Azerbaijan).
The US approach towards post-war reconstruction can be summed up in a single phrase: vertical integration. The US either engineers a coup or invades a country, occupies it literally or by proxy, sets up a government of its choice, makes into law policies that favour US commercial and political interests, and then hands out plum contracts for “rebuilding” and “rehabilitating” the country to its most favoured private corporations. Ground for the vertical integration model is prepared well before invasion. By deploying spin doctors and the media, manipulating intelligence and security briefs, and creating public hype and hysteria against shadowy foes, a case is built to render invasion and occupation inevitable. Everyone comes away with a good chunk of the post- war reconstruction pie, except of course those whose homes, families and live are destroyed by the endless war that the model results in.
The World Bank has its own version of vertical integration, which complements the US model well. In that the Bank has always been a proxy institution of the US through which the US imposes economic and financial conditions on capital needy countries, it flows naturally that when called in to co-ordinate the reconstruction of a war-torn country, the Bank will continue to defend the interests of the US and its allies, rather than respond to the needs of the affected population. The Bank will first lay down the rules and policies under which aid for reconstruction is to be solicited and used, then it will bring in private sector actors to implement these rules/policies while heaping the costs on the occupied, and when things go wrong—as they inevitably would under such circumstances—the Bank will declare the affected country to be a failed state that is in need of even more stringent application of the same rules and policies that keep it a state of continuing failure.
After the collapse of the Soviet Bloc, the US emerged as a relatively unchallenged global power, and sought to secure its economic and political interests throughout the world through whatever means it could garner, whether military, commercial, political or institutional. The US economy is an oil and war economy; oil is necessary to fuel the high consumption that characterizes the American “way of life” and clearly, the US will wage war to ensure control over oil reserves as well as to cement its position of global military and economic primacy. Economic globalization today is essentially American hegemony: over the clothes we wear, the food we eat, the beverages we drink, the machines and chemicals we use in our industries, the appliances we use in our homes, the drugs we need to save lives, the films we watch, and even the social and political values that many in our societies hold up as necessary for progress and modern advancement.
For the US, “reconstruction” involves setting up systems that advance US ideological and material interests. On the ideological end are promoting a market inspired articulation of “freedom and democracy,” an individualized interpretation of rights, US style “democratic” values and systems, and a US sense of “moral clarity.” On the material end are securing and consolidating US control over oil and other key resources, expanding US corporate power both, domestically and abroad, ensuring US hegemony in global consumption, and establishing market and corporate friendly governance and legal processes and institutions.
For Wolfowitz, the end of the Cold War offered vast opportunities for spreading US ideology and serving US interests. The use of “American muscle to advance American values around the world” (1) was crucial to ensuring US economic and political dominance globally. Use of the US’ military forces and technologies are central to this strategy and Wolfowitz had no trouble reconciling military power and commercial/economic interests with moral purpose. In a commentary on Wolfowitz’s thinking on post cold war defense policy, Andrew Bacevitch notes, “By taking advantage of vast new opportunities to put US military might to work protecting human rights and advancing the cause of freedom, the United States could actually cement its position of global primacy.”(2)
In pursuit of achieving this primacy, the US has moved seamlessly from directly invading and occupying countries and engineering and financing political coups (as in Afghanistan, Iraq and Haiti), to promoting “freedom and democracy” (as in Cambodia, Timore Leste and Central Asia), and threatening to withhold financial contributions to multilateral bodies such as the UN system, the Asian Development Bank and even the World Bank, unless they establish in aid recipient countries the policies and institutions that the US wants.
US thinking on post war reconstruction is clearly articulated in the mission statement of the Office of the Coordinator for Reconstruction and Stabilisation (S/CRS). Established in July 2004 in order to develop a more “robust capability”(3) to prevent conflict and “manage stabilization and reconstruction operations in countries emerging from conflict or civil strife,” (4) the S/CRS reports directly to the Secretary of State. The S/CRS mission statement notes that:
“Until now, the international community has undertaken stabilization and reconstruction operations in an ad hoc fashion, recreating the tools and relationships each time a crisis arises. If we are going to ensure that countries are set on a sustainable path towards peace, democracy and a market economy, we need new, institutionalized foreign policy tools – tools that can influence the choices countries and people make about the nature of their economies, their political systems, their security, indeed, in some cases bout the very social fabric of a nation.”(5)
The Bush administration has requested $124.1 million from US Congress to jump-start S/CRS operations and has asked for ‘flexible spending authority’ in order to allow resources to be used to “maximum effect.”(6) Despite rhetoric about fostering peace, harmony and democracy, securing economic gains rank high in S/CRS planning. According to Carlos Pasqual, the Coordinator of the S/CRS, the office will build inter-agency, inter-sectoral and military-civilian teams that can move into conflict situations early in the process and take on bulk of the reconstruction work:
“To support the larger and longer-term program requirements, the coordinator’s office is assessing and filling gaps across government agencies in contracts and more informal arrangements with organizations that specialize in various aspects of stabilization and reconstruction: mobilizing international civilian police, training indigenous police, developing systems of justice, providing fiscal and monetary advice, stimulating the private sector, and supporting civil society. S/CRS is also assessing the feasibility of a civilian reserve corps that could tap individuals with key skills. The goal is to organize all of these resources so that they can mobilize quickly and efficiently after a conflict to fill all the needed functions and skills.”(7)
Pasqual is clear that S/CRS’s work would focus on creating laws and institutions for a "market democracy," and that it will devise reconstruction contracts well in advance with private companies and NGOs. (8)
“And so we’ve begun a process of ensuring that we have a global network of contracts and grants and cooperative agreements with firms and individuals and think tanks and universities and NGOs so that these are pre-competed in advance in core skill areas so that individuals are identified and when, indeed, it is necessary to deploy a team of individuals to the field that you can go to those contracts and, perhaps, cut off three to six months in your response time by having these activities pre-competed in advance.”(9)
The US’s reconstruction ambitions are perfectly reflected in the case of Iraq. Between May 2003 and June 2004, Lt. Paul Bremer, the Head of the US-established Coalition Provision Authority (CPA) which served as the first occupation authority in Iraq, fired 500,000 state workers (including soldiers and civilians), opened the country to unrestricted imports, started to privatise state enterprises, and enacted a radical set of laws to entice multinational corporations to set up operations in Iraq. In her research on Iraq’s reconstruction, Naomi Klein noted that, “Overnight, Iraq went from being the most isolated country in the world to being, on paper, its widest-open market.” Klein reported that according to Joseph Stiglitz, former chief economist at the World Bank, Bremer’s reforms were “an even more radical form of shock therapy than pursued in the former Soviet world.”(10)
Contracts worth millions of dollars were routinely handed out by the CPA to favoured US corporations while top posts for shaping Iraq’s future “sovereign” government and Iraqi civil society were farmed out to highly paid and ideologically motivated professionals from the Bush Administration’s pet think tanks and investment banks. Prominent among them are the Research Triangle Institute (RTI), the National Endowment for Democracy (NED) and Bearing Point, all of whom were tasked with constructing economic, social and political structures and institutions most conducive to US corporate interests even after direct occupation ends.(11)The bulk of the contracts for civilian construction, maintenance of the oil fields and procurement went without open competitive bidding to Halliburton, former home of Vice President Dick Cheney, and Kellog Brown and Root (KBR), a subsidiary of Halliburton. (12)
In an analysis of the final draft of the Iraqi Constitution, Herbert Docena shows how the Constitution has written into law provisions for private ownership of Iraqi assets, including foreign ownership, and binds Iraqis to enforce the neo-liberal policies laid down in the Bremer decrees. Docena notes that, “The contents of Iraq’s permanent constitution are of critical interest to those committed to reconstruct Iraq’s economy along neo-liberal lines.”(13) Particularly important among these are the provisions that govern Iraq’s oil assets in reference to which, Docena notes, Adil Abdel Mahdi, Iraq’s vice president, told an audience in Washington, just before the Iraqi elections: "[T]his is very promising to the American investors and to American enterprises, certainly to oil companies.” (14)
US companies that have benefited from lucrative reconstruction contracts abroad also benefit at home as is evident from the rush towards reconstruction in the US’ southeastern Gulf Coast after it was ravaged by Hurricane Katrina. And here too, we see the vertical integration model at work. In early September, the US Federal Emergency Management Authority (FEMA) and the Army Corps of Engineers awarded at least seven no-bid contracts, most for up to $100 million, for post-Katrina clean up, emergency housing, repair of public works and provision of basic services. Many of these companies also received no-bid contracts for work in Iraq, including KBR. KBR is a client of Joe M. Allbaugh, the former head of FEMA from 2001-2003, who now has a private lobbying and consulting firm. (15) Mr. Allbaugh is also a close friend of President Bush and was his campaign manager in 2000. (16)
Bechtel, with $17.4 billion in annual revenues globally, is working under an informal agreement setting up housing in Mississippi, with no set payment terms, scope of work or designated total value. It is also performing reconstruction work in Iraq under a large federal contract. (17) Many of the normal contracting safeguards that should accompany contracts of such sizes have been temporarily suspended in post Katrina rehabilitation in an apparent bid to ensure that emergency federal aid gets to victims as soon as possible. Also, the Bush administration has waived prevailing wage requirements that ensure government-contracted workers in disaster areas are fairly compensated. (18)
The Army Corps of Engineers was set to award another $1.5 billion in contracts in mid-September for post Katrina cleanup operations in Louisiana and the Gulf Coast. Although these contracts will go through competitive biding, they will be given “expedited handling,” i.e., the bidding process can last less than three days. (19) Those involved say that the costs of post-Katrina reconstruction are likely to exceed $100 billion.
In a bid to preempt allegations of contract abuse, the Department of Homeland Security decided to send a team of investigators and auditors to the hurricane ravaged Gulf Coast to ensure that federal funds are properly distributed in rescue, relief and rebuilding work. This is the same Department that drastically cut FEMA’s budget for emergency response, and undermined the capacity of Louisiana’s national guard—whose job is homeland security—by shipping most national guard off to Iraq. Ironically, the team will not be able to investigate the most controversial of the Katrina contracts: a $16.6 million contract with KBR for emergency repairs at the Gulf Coast naval and Marine facilities. This money is part of a $500 million Navy contract that KBR won by competitive bid last July.
Homeland Security claims that it has no authority to audit the contract since it was awarded by the Pentagon. However, KBR has been under scrutiny for receiving a 5 year no-bid contract to restore Iraqi oil fields shortly before the Iraq invasion in 2003, and questions have been raised whether KBR was treated especially favourably because of its connection with Vice President Dick Cheney, who headed Halliburton from 1995 to 2000. (20) Halliburton (KBR’s parent company) also has a 5 year, $ 500 million contract with the US Navy to provide emergency repairs at military installations damaged by Katrina. (21)
Obviously Paul Wolfowitz is not responsible for the post-Katrina scandals, however it’s worth keeping in mind that this is the milieu and working culture he comes from—cronyism and a shocking lack of accountability. According to Danielle Brian, director of the Project on Government Oversight, a nonprofit government spending watchdog group, in the case of Katrina–as in Iraq– "You are likely to see the equivalent of war profiteering – disaster profiteering.” (22)
For the World Bank, post-war reconstruction is an opportunity to apply the most egregious form of structural adjustment to countries emerging from war or natural disasters, undergoing violent internal conflicts, under foreign occupation, and/or in “transition” from communism to capitalism. The Bank is playing a significant role in shaping the economic, social and political climates in Afghanistan, Cambodia, Africa’s Great Lakes region, the Balkans, Liberia, Nepal, Sierra Leone, Timor Leste, Sri Lanka, the West Bank and Gaza, and other areas torn by war, conflicts and disasters. Common to all World Bank reconstruction programmes is the immediate application of free market reforms, including legal provisions for foreign investment, full repatriation of profits for foreign investors, private property rights, zero subsidies for food and essential services, and the now ubiquitous ‘good governance.’
The World Bank is one of the most influential institutions involved in post-conflict and war reconstruction. “Mitigating the effects of war” accounts for about 16 percent of the Bank’s total lending. (23) The Bank has a special unit to design development programmes for conflict affected countries (the Conflict Prevention and Reconstruction Unit) and a special fund to provide financing for reconstruction in “post-war societies” (the Post-Conflict Fund). It has an Operational Policy on "Development Cooperation and Conflict" (OP 2.30) that sets the scope and the terms of the institution’s interventions and explicitly opens the door for the Bank to work in conflict prevention. (24) The Bank can even intervene in countries where it is unclear who is in power and can provide grants on request from the international community as “properly represented” (e.g., by UN agencies). This means that the World Bank (and the IMF) can operate in a country in the absence of a sovereign government, as they did in Iraq and Afghanistan.
The Bank’s Post-Conflict Fund (PCF) was established in 1997 to “enhance the World Bank’s ability to support countries in transition from conflict to sustainable peace and economic growth.” The PCF makes grants to governments, civil society organizations, institutions and private sector actors, to channel Bank aid as early, and in as broad a spectrum as possible. In financial year 2004 alone, the Bank disbursed US $10.6 million; since 1998, it has disbursed US $66.7 million to, among others, Afghanistan, Sri Lanka, Columbia, Haiti, Azerbaijan, Rwanda, Sierra Leone, Bosnia, Croatia and the Philippines. (25)
What is remarkable about the Bank’ involvement in post-conflict reconstruction is the breadth and size of its operations, and the ease with which it repackages its usual programmes into ‘reconstruction’ mode. The Bank’s reconstruction activities span a wide spectrum, from giving policy “advice” and commissioning studies, to financing in-country activities and managing the donor funds channeled to an war torn or conflict ridden country for reconstruction. In the Great Lakes region in Central Africa, the Bank is administering a US $350 million, multi-donor programme to demobilize and reintegrate 450,000 former combatants from Angola, Burundi, Central African Republic, Democratic Republic of Congo, Republic of Congo, Rwanda and Uganda.(26) Even the International Finance Corporation (IFC)—the bank’s private sector financing window—is into the business, and has provided financing for projects such as a luxury long-stay hotel for international development personnel in Rwanda, a luxury hotel for diplomats and development aid professionals in Afghanistan, the development of oil fields in Southwest Chad, the construction of an underground pipeline from Chad to Cameroon (to transport the oil from the Chadian wells), a greenfield cement plant in Iraq, privatization and expansion of a state owned power plan in Tajikistan, and a special loan facility to reconstruct and rehabilitate tourism facilities destroyed by the tsunami. (27)
In order to expand its reconstruction work, the Bank has developed "new products" for situations where normal lending instruments cannot apply. These allow the Bank to "position itself" early on in shaping the affected country’s development path. In a number of countries emerging from conflict, the World Bank prepares a Transitional Support Strategy (TSS). The TSS is a short to medium-term plan for comprehensive reconstruction through which the Bank can provide emergency recovery grants and loans. Angola, Macedonia, Kosovo, Timor Leste and the Democratic Republic of Congo all currently have a TSS. The Bank has also established and managed joint donor trust funds in countries such as Afghanistan, Kosovo and Timor Leste, and in the Great Lakes region in Africa. (28)
At the end of 2002, the World Bank established the Low Income Countries Under Stress (LICUS) Unit. LICUS focuses on improving development effectiveness in what the Bank calls “fragile states.” In collaboration with other development agencies and academics, the Bank has started to create an analytical framework and “assemble the right tools” to help countries in difficult circumstances.(29) As of June 2004, target countries included the Central African Republic, Haiti, Liberia, Myanmar, Somalia, Sudan, Togo, and Zimbabwe.
In the Bank’s world, fragile states are “characterized by particularly weak institutions and performance, as measured by the World Bank’s Country Performance and Institutional Assessment ratings.” (30) Significant here is the Bank’s observation that LICUS countries have “environments that are not conducive to absorbing significant quantities of development assistance.” (31) The Bank’s approach to fragile states is actually quite similar to that of the S/CRS. Both express concerns about a proliferation of failed states that are as much a threat to the world at large as they are to their own populations.
“Many LICUS have domestic stakeholders who are attempting to initiate basic reforms. Domestic reformers in these countries are often politically weak: they require modest but timely international support to build momentum for reform efforts. This is particularly critical in LICUS countries where efforts at national reconciliation or political transition are underway: it is crucial that economic and governance improvements take place during such transitional periods, both to prevent a return to political instability and to strengthen policies and institutions in readiness for more comprehensive engagement by the international community.” (32)
In January, 2004, the Bank set up a LICUS Trust Fund to support LICUS countries during what it calls “transitional” periods, especially for those that have loan servicing arrears to the Bank. Financed by the Bank’s surplus in financial year 2003, the Trust Fund has a budget of $25 million, and to date has disbursed $19.1 million in grant packages to Comoros, Liberia, Central African Republic, Haiti and Sudan. According to the Bank,
“The proposed trust fund, targeted primarily to countries in non-accrual, would allow the Bank to provide modest support that would assist them as they initiate the kinds of reforms that would set the stage for arrears clearance and subsequent access to IDA financing and debt relief, on the basis of a robust track record.” (33)
In other words, the objective of the LICUS Trust Fund is to bring these “fragile” countries back under the apron strings of the World Bank and the IMF. The main reforms envisaged through Trust Fund financing include, governance, civil service, public finance, policy, institutional and judicial reforms— all the elements of a classic structural adjustment programme.
Despite its best effort to portray otherwise, the World Bank’s motto, “Working for a World Free of Poverty,” rings increasingly hollow with every dollar of aid it disburses.
Over the past 60-odd years of its existence, the Bank has moved through numerous fads, including emergency relief, infrastructure development, building human and social capital, meeting basic needs, financial and economic reforms, good governance and participation. By any measure of economic or social performance, the last two decades have shown rigid applications of Bank-Fund economic and financial orthodoxy to be abysmal failures. Countries indebted more than 20 years ago remain mired in debt with crippling repayment burdens that have undermined all social and environmental indicators; income poverty, inequality, unemployment, hunger and malnutrition have become entrenched conditions as result of Bank-Fund designed economic and financial reforms; social exclusion, distress migration and human trafficking are on the rise wherever the Bank and Fund have left their policy imprints; environmental and ecological destruction and forced resettlement accompany most Bank financed infrastructure projects, and; the abilities of most Bank-Fund borrowers to combat HIV-AIDS, malaria and other epidemic diseases have been undermined as a result of shrinking public expenditure budgets.
In a study on IFI involvement in Afghanistan, Anne Carlin notes that IFIs are seeking "new lines of business" at a time when large borrowers such as India and China turn to other sources for major projects. (34) In order to keep middle income clients such as India and China, the IBRD has cut its loan fees and raised the maximum amount it would lend to a single country by $1 billion, to $14.5 billion. (35) According to a senior Bank official, India has complained that it find the costs of borrowing from the Bank too onerous and is unwilling to borrow if the costs of borrowing are not reduced.
Post conflict/war reconstruction provides an excellent opportunity for the World Bank to carve out a new role for itself and keep institutional irrelevance at bay. “Nation building” and supporting “fragile states” to achieve “sustainable exits” from conditions of conflict offer useful shields to the Bank to deflect unfavourable attention away from its poor record with structural adjustment, debt relief and white elephant infrastructure projects. The ascent of Paul Wolfowitz to the Presidency of the Bank thus suits the Bank’s interests of self perpetuation.
Although Wolfowitz comes to the Bank presidency without any development experience, he does bring the extremely valuable experience of overseeing the reconstruction of Iraq during which, he demonstrated his commitment to corporate-led development. It matters little that in the two years since it was invaded, Iraq has descended into chaos, food, water and medicines are scarce, security is practically non-existent, and the country is wracked with sectarian conflicts. More important is the fact that US corporations have control over all the plum contracts for rebuilding the structures that Wolfowitz’s war destroyed. Vertical integration at its best.
In mid-September, the World Bank’s Board approved a plan for using as much as $500 million in loans to the Iraqi Government. In 2004, Wolfowitz’s predecessor, James Wolfensohn committed $3-5 billion for reconstruction and agreed to manage the Iraq Trust Fund. The Bank is now considering sending staff back to Iraq to oversee the huge sums of reconstruction funds that will be channeled through the Trust Fund, since an internal Bank report has warned that "there are high and unprecedented risks" to the Bank’s work in Iraq, arising from the inability of Bank experts to travel around the country and oversee aid disbursement. (36)
An interesting facet of the World Bank’s LICUS programme is that it endows the Bank with the capacity to designate countries that are at threat of becoming “fragile states.” Similarly, Carlos Pasqual’s S/CRS office has requested the US National Intelligence Council to identify every six months a group of countries that they consider to be at the “greatest risk of instability.” From among these, the CRS will select countries on which it will “focus a more intensive planning process.”(37) Both, the Bank and S/CRS then, are in a position to make state failure a self-fulfilling prophesy through their respective post war reconstruction programmes.
Paul Wolfowitz’s past experience in the US Administration is likely to serve him well in his new job at the World Bank.
* Shalmali Guttal is a senior associate with Focus on the Global South [email protected].
1. Andrew J. Bacevich, Trigger Man, In Paul Wolfowitz, messianic vision meets faith in the efficacy of force. The American Conservative, June 6, 2005.
2. Ibid.
4. Ibid.
5. Ibid.
6. Stephen D. Krasner, Director of Policy Planning and Carlos Pascual, Coordinator, Office of Reconstruction and Stabilization. Addressing State Failure. Foreign Affairs Magazine, July/August 2005, Vol 84, No 4, Washington, DC, June 27, 2005.
7. Ibid.
8. Financial Times, US prepares classified watch-list of 25 unstable countries. March 29 2005.
9. Ibid
10. Naomi Klein, Baghdad Year Zero, Pillaging Iraq in Pursuit of a Neocon Utopia. Harper’s Magazine, September 2004
11. Herbert Docena, The Other Reconstruction: How private contractors are transforming Iraq’s state and civil society. Focus on Trade, Part 1, Number 101, July 2004.
12. For details see the website:
13. Herbert Docena, Iraq’s Neoliberal Constitution. Foreign Policy in Focus,
14. Ibid. See also, Emad Mekay, US to Take Bigger Bite of Iraq’s Economic Pie. Inter Press Service, December 23, 2004.
15. Leslie Wayne, Expedited Contracts for Cleanup Are Testing Regulations. The New York Times, September 13, 2005.
16. John M. Broder, In Storm’s Ruins, a Rush to Rebuild and Reopen for Business. The New York Times, September 10, 2005.
17. Ibid.
18. The Associated Press, Investigators to Monitor Katrina Contracts. September 13, 3005.
19. Leslie Wayne, Expedited Contracts for Cleanup Are Testing Regulations. The New York Times, September 13, 2005.
20. The Associated Press, Investigators to Monitor Katrina Contracts. September 13, 3005.
21. John M. Broder, In Storm’s Ruins, a Rush to Rebuild and Reopen for Business. The New York Times, September 10, 2005.
22. Ibid.
23. World Bank Conflict page, World Bank website.
24. See “Bank’s policy on development cooperation and conflict,” World Bank web page.
26. See
28. Bretton Woods Project:[126]=x-126-16554
30. See
31. Ibid.
32. Ibid.
33. Ibid.
34. Anne Carlin, Rush to Reengagement in Afghanistan: The IFI’s Post Conflict Agenda, Bank Information Centre, December 2003.
36. Paul Blustein, World Bank Considers Sending Staff Back to Baghdad, Wolfowitz Acknowledges That Presence Is Important to Success of Rebuilding Programs. Washington Post, September 18, 2005.
37. Remarks delivered by Ambassador Carlos Pascual at The Center For Strategic & International Studies, 20 October 2004.