The crisis over World Bank president Paul Wolfowitz is the result of the institution’s lack of internal democracy, UK-based international relief and development agency Christian Aid says.
An antiquated agreement allows the United States government to nominate the World Bank president, while European governments nominate the managing director of the Bank’s sister agency, the International Monetary Fund (IMF).
The US stranglehold results from its massive, 16 per cent voting share. The combined vote of the majority of the African continent – comprising 47 countries – is just 6 per cent. And the voting system guarantees the US an effective veto on any major decision.
Christian Aid has warned consistently that in its view Mr Wolfowitz is a bad choice of president, and that his election would be bad for poor countries. Christian Aid has also long argued that the president should be elected democratically.
In a letter to Britsih PM Tony Blair in March 2005, just before Wolfowitz was confirmed in post, Christian Aid said his election had laid bare the hypocrisy of a process "...which is neither transparent nor merit-based, as employed by an institution which portends to advocate good governance".
Charles Abugre, Christian Aid’s head of policy, commented: "Two years on and Wolfowitz’s regime has descended into farce. The self-styled anti-corruption crusader has behaved in a manner he was quick to condemn of recipient governments.
"Democratic choice is at the heart of good governance, yet the Bank pursues a policy of telling developing countries – who have almost no say in the election of the president – what to do."
Christian Aid is concerned that the Bank still uses the language of good governance for dubious economic reforms. "The governance issue is, in our view, a Trojan horse for inappropriate liberalisation reforms," adds Charles Abugre. "For example, in a recent loan to Bangladesh, trade liberalisation was packaged as contributing to ‘good governance and anti-corruption."
Christian Aid says it believes the UK and other European governments, including France and Germany, should lead by example and give up control over the leadership of the IMF.
The US should follow suit and relinquish its control over the World Bank, says the agency.