It was odd that one of the biggest barriers to lifting nations out of chronic poverty — rampant government and business corruption — didn’t appear on the radar screen at the World Economic Forum at Davos a few weeks back. There wasn’t a single panel discussion on a problem that some say costs poorer nations up to twenty-five percent of their national income. Nonetheless, instigated by people tired of empty promises, horrible living conditions, and out-right thievery an anti-corruption wave, has gathered some momentum. The BBC reported on this campaign over the weekend. While today’s Washington Post reports on anti-corruption efforts in Kenya —
“‘We’re a thirsty land of empty promises. Other countries have droughts and you never see their people dying,’ Ciira said in this town 50 miles northwest of Nairobi. As she spoke, people gathered around her, some waving copies of one of Kenya’s daily newspapers, the Nation, with a three-page spread detailing the largest scandals.” Last week, dramatic details of two of the largest scandals have implicated high-level officials, some of whom allegedly pocketed a total of $1.3 billion in public funds, money that critics say should have gone to irrigation and road projects to help protect farmers from the devastating effects of recurring droughts. As the country’s worst drought in 20 years wears on, many Kenyans are blaming government corruption, not Mother Nature, for their dire situation. The crisis highlights how government fraud and mismanagement can worsen, and in some cases create, food shortages.
— and at the World Bank under the leadership of Paul Wolfowitz.
The bank has frozen lending to Chad, whose government had reneged on a promise to spend its oil revenue on poverty reduction. Although Chad is a small country, the frozen loans were high-profile: They were an attempt to defy the “curse of oil” and make petrodollars serve development. It took some courage to admit that the curse of oil remained unbroken. The bank has canceled 14 road contracts in Bangladesh because of corrupt bidding. Two government officials have since been fired, and Wolfowitz plans to ban the private firms involved from future World Bank contracts. The bank has frozen five loans to Kenya because of corruption, though it did go ahead with a project to improve Kenya’s financial management. On a recent stopover in London, Wolfowitz made a point of having dinner with John Githongo, a senior Kenyan official who left the country after issuing a report exposing cabinet ministers’ corruption. The bank has interrupted a project in Argentina that topped up the wages of poor workers. Some of the money seems to have greased the ruling Peronist Party’s electoral machine before elections in 2003, and the government has brought charges against one senior official and fired 10 others. The bank’s Argentina team responded by building in a few corruption safeguards and pressing to resume lending. But Wolfowitz has demanded that the safeguards be expanded further still. The project has yet to be reauthorized. Finally, the bank has postponed debt relief for Congo. A team from the International Monetary Fund had certified that the country deserved relief, and the bank was supposed to fall in line last Thursday. But a newspaper report about the Congolese president’s extravagant hotel bills was passed around by Wolfowitz’s top staff, who noted that KPMG, the firm that audits Congo’s state oil company, had refused for three years running to sign off on its financial statements. On Tuesday Wolfowitz called the IMF’s boss and asked whether Congo really merited debt relief. On Thursday he refused to go ahead with it.
