Saturday, March 03, 2007

World Bank to begin lending to Iraq?

Wolfowitz May bring Bank Back to Iraq
Emad Mekay

World Bank President Paul Wolfowitz is planning on appointing a resident director for Iraq soon. The Bank has not had any presence in Iraq since August 2003, when a Bank staffer died in a bombing. This move could signal the beginning of World Bank loans to the conflict-stricken nation, despite the poor security situation and recent disclosures of widespread corruption in reconstruction efforts. However, a Washington based watchdog group, Government Accountability Project, is extremely critical of Wolfowitz’s policies in this regard. According to the Government Accountability Project, Wolfowitz is using the World Bank’s funds to supplement American military goals in the Middle East, which represents an unacceptable distortion of the Bank’s mission. It is worthwhile noting that Wolfowitz was one of the architects of the U.S. military initiative against Iraq.

At this early stage, it is apparent that World Bank officials are far from unanimous in their support for Wolfowitz’s stance regarding Iraq. World Bank veteran of 30 years, Christiaan Poortman, Vice President of the Bank’s Middle East operations, resigned last year because he opposed Wolfowitz’s ideas about increasing lending and adding staff in Iraq. Further, others contend that in the absence of a functional banking system and governmental control, there can be absolutely no guarantees of loan repayment. Critics believe that development projects in Iraq at this stage should be funded by donors’ grants not World Bank loans.

1. How can the World Bank best assist Iraq in its developmental efforts, or is it too early to even think of World Bank intervention in this regard?

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