On the day that gold hit $
1385.50/ oz, the Twin Cities community packed the Humphrey Center auditorium to hear of "Challenges Facing Global Economic Development."
On Wednesday December 1, the President of the World Bank Group, Robert Zoellick, faced the Twin Cities community and addressed global development issues in the format of a guided conversation with his friend, Vin Weber.
Weber, the senior fellow at the Humphrey Institute of Public Affairs for many years, had pulled some strings to make this conversation free, public, and catered, promoting both the University of Minnesota and the World Bank.
The public wanted to know-- among other things written on pre-screened question cards-- what effect the Wikileaks site would have on banking. He said that it would have no effect, but Zoellick criticized the new releases from Wikileaks, saying that they make it harder for the US to do business with other countries.
[TC Indymedia video: Zoellick on Wikileaks:
http://tc.indymedia.org/videos/2010/dec/world-bank-president-robert-zoellick-slams-wikileaks]
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More: Upcoming Event: Striking Blows in Defense of the Earth @ U of M - Dec 11th - Ongoing: Indymedia live coverage of Cancun COP16 Climate Conference - LINK http://mobilebroadcastnews.com/MBN/story/Cancun-COP16
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The World Bank's claim is to work towards a world free of poverty. But time and again, its policies have eased up on the destructive practices of multinational corporations.
President Zoellick will soon face this easing of standards, as Sinar Mas, a palm oil company, fights its sanctions. Recently, as the Rainforest Action Network and scores of its allies have pressured multinationals like Cargill to stop using palm oil from old rainforests & end deforestation of the rainforests of Indonesia, the World Bank proposed changes to its own palm oil policy.
According to Climate Action's blog of November 22,
"The World Bank’s proposed easing off on its palm oil strategy [of no funding to palm oil companies] has roused relief for corporations worldwide whilst attracting mixed reactions to its plan to finance only firms pursuing green standards....
Robert Zoellick was responsible for freezing World Bank Group funding worldwide in the palm oil sector, pending the social and environmental concerns. It is now his responsibility to ensure safeguards are in place to protect all stakeholders."
Will he go forward with the green standards, which will be contested in early 2011?
Questions abounded and a few pre-screened questions were brought from the audience to facilitator Vin Weber.
Weber brought up the pointed question of Zoellick's piece in the Financial Times
(http://www.ft.com/cms/s/0/54a44c3e-ec7c-11df-ac70-00144feab49a.html#axzz17PNuQcFc)
that briefly mentioned a gold standard. It's the sort of thing that gets everyone worrying, and for good reason. "Gold is a signal of no confidence in the currency policies," Zoellick replied, betraying a hint of self-doubt. He advised a successor to the Bretton Woods II agreement, not an international gold standard but neither a rapidly shifting exchange rate like in China. He predicted that there will be flexible currencies with none predominant-- and no longer a dominant dollar -- but he had most faith in the Chinese Renminbi, "which needs to join the club and have an open capital account," he said, so that foreigners can finally invest in their currency.
The Bank President is surely picking up on the Gold Signal, and seeing its troubling signs not only for his job but for America.
"If you have a banking crisis, you'll have a sovereign debt crisis next," he warned. "Either debasing the currency, clipping coins, or inflation!" Both tactics are currently in use, of course, by America's money-maker, the Federal Reserve. His criticism of Federal Reserve Chairman Ben Bernanke was subtle: "I should be very careful what I say about certain institutions, like the Federal Reserve."
The World Bank Group is diverse, but not a democracy, in that its members' votes don't have equal weight. Zoellick commented that nothing in the WBG's charter requires it to be a democracy or to work with democracies.
One audience member asked, Why does the World Bank Group provide capital to dictatorships, like that of Ethiopia? Doesn't that border on complicity?
Zoellick responded that the needs of humans can still be addressed by World Bank funding & shouldn't be neglected for the sake of politics. He expressed an interest in working with Ethiopia for its leadership in addressing climate change. Many WBG members are not democracies, he noted, but still worth working alongside-- but to what (greenwashed) end?
The US has the greatest voting power among the 187 members (each representing a country) of the International Bank for Reconstruction & Development, one institution in the World Bank Group. The WBG, though a resource for international investment & settlements, is based in Washington, and customarily headed by an American. The International Monetary Fund, which also is based in Washington DC & came out of the historic Bretton Woods conference, is customarily headed by an European. This industrial Western bias has led to controversy over its approach to the Global South, a top-down approach that gives a uniform answer to development and aid while burdening developing countries with top -priority debt.
One question from the audience urgently asked about Structural Adjustment Programs, referring to the process of lending to poor countries with strict conditions for streamlined national economies, insisting on "free markets" that allow foreign companies access to resources.
Zoellick answered that there are no more Structural Adjustment Loans, and that the World Bank Group rather emphasizes Poverty Reduction Strategy Papers. Such plans are intended to be led by the governments of the recipient countries, but they tend to look quite similar to the terms of the Structural Adjustment Loans because the World Bank still advises heavily.
Zoellick spoke of a hip, green, transparent new trend in investing, but however hip it may seem, it will still be top-heavy.
He spoke of an upcoming Post-Conflict Development Group to emerge from WBG's work in Rwanda and Afghanistan, which would join the other complicated institutions in this alphabet soup: ICSID, the International Centre for Settlement of Investment Disputes, IFC, the International Finance Corporation, the Multilateral Investment Guarantee Agency for insurance, the prerequisite IBRD, International Bank for Reconstruction and Development, and the group for the poorest countries, IDA, the International Development Association.
It all seems very humanitarian at first glance.
"How can we help Africa?" Zoellick asked. He sees the emerging powers of the world as developing countries, some of them ahead of the curve of renewable energy, and wants to bring them in as stakeholders in a typically condescending institution.
"The basic lesson of development, no matter how well-intentioned, is --if the local guy doesn't own it, it's not going to work." He went on to say that "there are not just solutions from the West," but a "common interest" to be heeded.
That common interest, according to Zoellick, is localization and transparency. He said he wants to start a Corruption Hunters group in Washington, with investigators from 132 countries looking into political and financial corruption. "There are not just people who take bribes, but also people who
give bribes..."
This won't be the first time Zoellick's long career in finance helpes him dip into politics. With the World Bank, he claims to be uninvolved in politics.
But they say, the business of America is business.
His biography, as distributed at the event, reveals friendly jaunts through the "revolving door":
"From 1985 to 1988, Zoellick served in various positions at the Department of Treasury, including Counselor to Secretary James Baker, Executive Secretary of the Department, and Deputy Assistant Secretary for Financial Institutions Policy. In August 1992, Zoellick was appointed White House Deputy Chief of Staff and Assistant to President G.H.W. Bush. Mr. Zoellick was also appointed Bush's personal representative for the G7 Economic Summits in 1991 and 1992.
From 1993 to 1997, Zoellick served as an Executive Vice President of Fannie Mae. Zoellick was appointed as the John M. Olin Professor of National Security at the U.S. Naval Academy (1997–98), Research Scholar at the Belfer Center for Science and International Affairs at the John F. Kennedy School of Government, and Senior International Advisor to Goldman Sachs. From 2001 to 2005, Mr. Zoellick served as U.S. Trade Representative and from 2005-2006, he served as Deputy Secretary of State. He then took office as President of the World Bank on July 1, 2007", succeeding a very different President, Paul Wolfowitz.
What's next for the Development Aid Crusade?The World Bank has proposed to collect climate taxes in the Copenhagen 2009 proposal:
http://www.guardian.co.uk/environment/2009/dec/08/copenhagen-climate-summit-disarray-danish-text
Meanwhile, as the COP16 met to hash out the details, hundreds of protesters in Cancun demonstrated, upset about the World Bank controlling the global climate fund:
http://www.huffingtonpost.com/tina-gerhardt/street-heat-actions-in-ca_b_792905.html
