issue 257 - July 1994
That martini magic
In a candid moment of self-congratulation one of the movers and shakers
at the World Bank reveals his deepest thoughts about the nobility
of the cause and the carping critics who dare defame it.
Bank watcher Joanne Henderson is the fly on the wall.
Ladies and gentlemen, thank you for asking me to say a few words this evening as we celebrate the twenty-fifth anniversary of the Bretton Woods Recreation Centre. The magical combination of playing golf and sharing martinis helps cement friendships and business deals. If we could export it in cans I’m sure it would contribute greatly to solving balance-of-payment problems. Perhaps our good colleagues over at GATT might even agree to qualify the combination as an intellectual property right.
As a member of the World Bank team that handles our relations with outsiders I’m often asked about this place. The requests sometimes come from our critics. Instead of taking the time and care properly to evaluate our worldwide efforts in the cause of development, they seize on any little ‘extravagance’ to defame us.
So let me share with you the answer I have prepared for them.
‘The World Bank does not own a golf course. The IMF operates the Bretton Woods Recreation Centre which was established in the 1960s when similar Washington area facilities were racially exclusive. Bank staff can obtain associate memberships at the unsubsidized rate of $1,850. Our staff hold only 225 odd of the 450 associate memberships available to non-IMF international organizations. This out of our total staff complement of 6,800.’
There. That sets the record straight.
It is a privilege to reflect tonight on another anniversary – that of the Bretton Woods institutions themselves. Particularly the institution which I have been honoured to serve for some two decades now – the World Bank.
It is a happy irony that it took a Third World government, that of Morocco, to set the proper tone for our celebration. On 15 April they placed an ad in the New York Times which set out a clear message about our past, our present, and our future. It read simply:
1944 Bretton Woods: The IMF and the World Bank
1945 San Francisco: the United Nations
1994 Marrakech: The World Trade Organization
History Knows Where It’s Going
The ad goes on to describe the new World Trade Organization as the ‘third pillar of the New World Order’.
To some, proclaiming oneself a pillar of the New World Order might appear an illusion of grandeur, a sign of the inebriation that often accompanies power. But I say to you, ladies and gentlemen, that it is an honest statement. A statement of pride. And that is really what I want to talk about tonight: pride. Because I believe that for a long time now we have had a dip in the sense of pride about our vision and accomplishments.
When I first started at the Bank I couldn’t believe my luck. As public-relations opportunities go I couldn’t imagine a better set-up – an institution with the beneficent mission of helping the poor, the hungry and the sick. The World Bank. Visions of planetary unity. It was as if the world had lent its name to the institution out of respect and honour.
So we begin with a noble cause grounded in 50 years of history. There have been criticisms but the Bank welcomes constructive criticism. It is only in the last few years that our critics have started to become shrill. This minority of low-budget professional troublemakers has chosen the Bank as a scapegoat for all the world’s ills – and unfortunately they have at times won the ear of the media. Of course people of real influence, North and South, see at first hand the benefits of our programs and policies. They realize the value of introducing some old-fashioned discipline into the chaotic world of development economics. They know there’s growth enough for everybody – the nations to whom we lend money as well as those doing the lending. Contracts for roads and dams. Contracts for mines and power plants.
So why, with the grandeur of our Mission and the abundance of first-rate talent that we have gathered from around the world to accomplish it, are we suffering from what I can only describe as a withering of self-esteem? We have been dragged down by an annoying combination of carping criticism from the outside and damaging internal bickering and power struggles on the inside. All too often these find their way into the press.
The problem is, of course, leadership. There hasn’t been any real leadership, in my opinion, since Robert McNamara left the Bank in 1981. Now there was a great World Bank president. He was a visionary and knew good PR when he saw it too. And if it wasn’t there he was perfectly capable of inventing it. When he said this was a bank for the poor, by God, people believed him, and all of those clay-footed butterballs at the US Congress came up with the money to increase Bank lending five-fold. What I wouldn’t give for another McNamara!
But today the loss of our old swagger has left us vulnerable to further bludgeoning by our detractors. An unholy alliance they are too. Right-wing conservatives with no desire to help the poor, working hand-in-glove with a naive bunch of environmentalists and champions of human rights who don’t know beans about what it means to be poor. Stop this. Stop that. Stop development is what they mean – leave the Third World to run itself on candle light and miniature windmills!
As for the outburst of publicity garnered by vocal activists in the Third World itself with all their crude jargon about recolonization – journalists should take a deeper look. What they would find, if only they had eyes to see, is a movement of left-wing agitators, many of them communists, clinging desperately to their dying ideology and using us as their scapegoats. They claim the Bank and the Fund aren’t helping the poor. Their quixotic notion seems to be that the poor can help themselves.
Well, let’s face some hard facts. The sick, the illiterate and the poor are not by themselves up to the tasks of international competitiveness that the New World Order demands. It has always been the industry, investment and initiative of the upper and middle classes that provide the economic motor to raise everyone’s standard of living. This is how the poor will be lifted out of poverty – not today perhaps but soon.
This isn’t just wishful thinking. Our critics go on about our preoccupation with the bottom line – saying our policies are based on a cold inflexible economics. But this is exactly why we will succeed. We have some of the best economic brains in the world working at the Bank. And it is our tough scientific analysis that will make a difference, not the wishful thinking of our critics. Far from apologizing for our approach, we should celebrate it.
You may be alarmed to hear that some of our own colleagues are trying to put a damper on the celebration of our 50 years of achievement. These are people who have lost their sense of vision and direction. They say ‘let’s celebrate in the privacy of our boardrooms in case the press fasten on statistics about our project-failure rate’. These are the types that hide their heads in shame over a few million cost over-run on the construction of our new building here in Washington. They are the ones prone to talk off the record, leak documents to the press and encourage doubt and criticism of management decisions.
Colleagues like this make my job a difficult one. McNamara would have just shown them the door. The Bank is led by a hard-working and enthusiastic team who deserves loyalty at every level of the institution. And we – you and I – can make this happen.
To this end I’ve worked up a few simple rules of thumb when dealing with outside criticisms of Bank policies. If we all stick to these we can underline to the outside world both the complexity and enormity of our task. Our critics seem to hold us responsible for every little glitch in the development process. It would certainly be nice to have all the influence with which they credit us but we are just not that powerful. So let us say simply but loudly and repeatedly ‘IT’S NOT OUR FAULT’. We believe in accountability and responsibility – so let the responsibility fall on the right set of shoulders.
Always remember that:
1) Problems associated with lack of democracy and human rights in any of our borrowing countries are not our fault. According to our charter we cannot attach human-rights or other political conditions to our loans. Of course in the case of structural adjustment we may have to stipulate certain economic policies and goals and penalize unproductive spending or price controls, but this is not a directly political matter.
2) If the millions resettled due to Bank-supported dam projects are not adequately compensated and rehabilitated, it’s not our fault. We are involved with only a small number of the overall world total of people forced to resettle. We can, moreover, point to people whose lives have been greatly improved by resettlement. Resettlement compensation is besides a matter for the local political authorities (all too often dictatorships) and thus out of our hands.
3) If people can’t speak English, that’s not our fault. It is far too expensive and at any rate logistically impossible for the World Bank to produce project documents in all the world’s thousands of languages.
4) If structural adjustments don’t work, it’s not our fault. This is mostly due to improper implementation by foot-dragging politicians or outside shocks that could not possibly be anticipated. Remember, there is no major political leader in the world today who does not recognize the need for adjustment. Adverse effects on the poor are temporary and they will benefit in the long run.
5) If the environment is degraded in countries where we are active, that’s not our fault. Environmental degradation is caused by poverty and only the free play of the market will raise up the poor. Free trade and an end to government subsidies will give a proper appreciation of the value of natural resources and enhance their preservation. To take just one example, deforestation is aggravated by public ownership. Through privatization and logging concessions the true value of the forest resource will be realized.
6) If projects and programs fail and the only thing growing is a country’s debt, that’s not our fault. The Bank gets involved in an economy only at the invitation of the host government, so blame (or most of the credit for that matter) lies with them.
The list could be longer but you get the idea. As we enter our next 50 years let’s be forthright and unafraid of our success. If the missions, advice, money and goodwill we send to the Third World were unwelcome they would not continue asking for them.
Over the next two years we are celebrating not just an anniversary. We are celebrating the future. A future in which we are a pillar of the New World Order. That future begins now. So Happy Anniversary!
Joanne Henderson is a pseudonym for an expert on the Bank who prefers to remain anonymous in case she is not invited back to the next bash.
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