[World Bank - IMF] Wolfowitz suggests ways to fight poverty

from The Houston Chronicle

By ELAINE KURTENBACH

SINGAPORE — Fighting corruption topped the agenda of the World Bank's gathering Monday in Singapore, with the institution's President Paul Wolfowitz stressing that accountability and transparency are essential for promoting economic growth and fighting poverty.

The point is to ensure that money goes where it is needed and is used most effectively, Wolfowitz said in a statement to the World Bank's policy-planning committee.

"Sound principles of accountability and transparency not only assure funds are spent as intended, but also are essential to accelerating economic growth, helping poor to escape poverty," said Wolfowitz, who has come under fire for decisions by the World Bank to block funding to countries accused of corruption.

Still, Wolfowitz said the bank, whose mission is to provide funding to fight poverty, said international aid donors must not abandon the poor because their governments or institutions are weak.

"That would mean they would be penalized twice," he said.

After Wolfowitz, the former U.S. deputy defense secretary, took over as president of the World Bank last year, the Washington-based institution suspended funding for more than $1 billion for projects in Africa and Asia because of allegations of corruption.

The World Bank's decision to suspend funding for many projects in Africa and Asia due to corruption allegations infuriated many countries, especially in Africa. They contend that poor people are being penalized for abuses by government officials and businesses.

"There is this belief that we are not doing enough. But nobody has told us what that 'enough' means," Kenya's Finance Minister Amos Kimunya told The Associated Press. "Nobody has added any item to what we are already doing."

In Kenya, the World Bank has held back funding for five projects, including one on education and another on AIDS, because of allegations of corruption, he said. Although Kenya has met all conditions for the loans, disbursals have been delayed because the allegations have yet to be investigated, he said.

According to the World Bank, $1 trillion in bribes change hands worldwide every year. The bank itself has uncovered 2,000 cases of alleged fraud, corruption and other misconduct related to its projects since 1999 and has sanctioned more than 330 companies and people, it says.

The World Bank says it has resumed funding for projects after recipient countries promised to bring safeguards against corruption.

The bank's policy-setting development committee met Monday to discuss a strategy paper on anti-graft efforts in countries receiving the bank's loans.

"Bank shareholders expect the bank to do all it can to ensure that the resources it provides will not be wasted," the draft strategy paper said. It said the bank would focus on good governance, using anticorruption teams, field-based governance advisors and anticorruption action plans for projects.

Wolfowitz and other delegates attending the annual meeting of the bank and the International Monetary Fund spoke of a growing consensus on the urgency of the problem.

"Everywhere you go, whether it is the taxi driver or the governments, will tell you bad governance is the reason for poverty, the lack of development," Wolfowitz said.

Speaking on behalf of 21 African countries, Kenya's Kimunya said Sunday that every country has its own way to deal with corruption and that there cannot be a uniform prescription to deal with the problem.

Wolfowitz emphasized that the bank would do whatever it can to help alleviate poverty, finding ways to meed basic needs while working with governments to resolve disputes over graft allegations.