October 13, 2006

Barun Roy: The moolah country

Why countries like Bangladesh are vehemently opposing World Bank's anti-corruption crusade.
Bangladeshi finance minister, M Saifur Rahman has a quick tip for the world's corruption busters. Close down the Swiss banks, he harangued in rightful anger at the recently concluded World Bank-International Monetary Fund annual meeting in Singapore.
It's almost like saying close down the governments if you really want to strike at the root of the problem. But we know that's an outrageous suggestion. Rahman knows it too, so he could afford to facetious. He thought the World Bank's toughening stand against corruption was "rather too much." It would decrease the flow of funds for projects to benefit the poor, he said, as if the flow of funds to Bangladesh, till the moment of his speaking, had really benefited the poor.
Here's what a Bangladeshi economist, Professor Mahfuz R Chowdhury, who teaches at Long Island University in the US, has to say (as quoted in a recent e-newsline dispatch from ADB Institute): "Despite the tremendous influx of foreign aid, Bangladesh's overall economy for general people has not improved much, even after some 35 years of its existence as an independent state. It is not to say that Bangladesh has not made any improvement as the economy has grown 5 per cent a year during the past decade. But the general public has benefited little. Aid money has created an unprecedented number of billionaires in the country. Of the billions of dollars" — $43.26 billion according to some estimates — "the world has sent to Bangladesh for its economic development, only a mere 25 per cent has gone towards that purpose. The rest of the money has one way or another been misappropriated by the privileged few."
One understands why Rahman and his kind are upset by any talk of tightening the screw. Rejecting the World Bank's proposal to deploy anti-corruption teams and field advisors in countries where governance and corruption pose major obstacles to reducing poverty, Indonesia's Finance Minister Mulyani Indrawati advised the Bank to instead deploy more people "who can work side-by-side with us at our pace, meet our deadlines and face our pressures." Mark these words: "our pace," "our deadline," "our pressures." "Act as a partner, not a preacher," she said.. Even India's P Chidambaram thought all this talk of stringent project screening was anti-poor.
I am surprised Rahman and others came out so stridently in the open. They didn't need to. Everybody knows that, in countries like Bangladesh and India, the battle against poverty will never be won, because everybody stands to lose if poverty ceases to exist. Cheap funds won't be flowing in anymore, cuts will dry up all along the line, and political parties will lose the ability to distribute largesse to maintain cadres along with their role as political jihadis.
Besides, multilateral lenders like the World Bank and ADB can curtail but can't actually stop lending for anti-poverty projects simply because a part of the funds is ending up in undesirable pockets. That would go against their mandate. It will be like punishing the poor for no fault of theirs. The World Bank board certainly won't let that happen. Already, there's a move to mitigate the stridency in Bank President Paul Wolfowitz's anti-corruption crusade, which has so far led to the suspension of loans worth more than $1 billion to suspect countries, including Bangladesh. The Singapore meeting decided that the Bank's governance and anti-corruption engagement would be supervised by its Development Assistance Committee, and not by Wolfowitz, whose jingoism on Iraq is still fresh in people's minds, hence, causing all the apprehension.
But that's not the point. What's galling about the whole thing is that there was no expression at the meeting, of any sense of shame or regret, from Rahman or other defenders of development aid that the countries themselves had done little to mitigate the scourge of corruption. Especially Bangladesh. This country of over 140 million people, half of whom are considered absolute poor living on less than a dollar a day, has topped Transparency International's list of most corrupt nations for five years in a row. Yet Prime Minister Khaleda Zia is unperturbed and thinks corruption is only a matter of perception. TI conducted a nation-wide household survey in 2005 that showed the annual burden on households because of corruption in a few selected sectors alone, such as land administration, police administration, and lower judiciary, amounted to Taka 6,796 crore. Yet nothing is more important to the political parties than the upcoming national elections in January, and even the Alliance for Economic Justice in Bangladesh, a coalition of 35 non-government organisations, wants the government to refund all loans from the World Bank and IMF to get rid of "illogical" conditions tagged to their aid packages.
Are we surprised? No. This is perfect moolah thinking fit for a perfect moolah country!

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