[Assam] Oh My! - World Bank life; Corruption in India like Africa: WB official

Fri Feb 6 12:34:27 PST 2009

C-da,

I think the article shold be focused on how the corrupt in the developing countries are taking the donors for a ride. I have limited experience with World Bank though twice a month I volunteer at a non profit operating 200 yards from its HQ and recently we had an ex-WB exUSAID guy at our place discussing solar power ( Jnana Jyothi project) -- seemed quite Gandhian. Mangesh K. --- but it is common knowledge that WB officials have month long vacations and leave for the weekend at 4:30pm on Fridays.

 Traveling to big cities is in five star hotels but ofcourse they hve to go to risky rural places and live in tents too - so perhaps it evens out..  Further, since the take so many risks etc - perhaps they need more breaks - including further training to keep abreast with latest research - just like Univ professors who actually teach only 3 hours a week - though get paid for 40 hours/wk and get 3 months holidays.

corruption seems to be forced on the bank by the borrowers - like Mugabe saying - I will distribute aid - in  a country where thee is 90% unemployment and 70% below poverty line. if u want to help the country's power you have to work with Mugabe despite lawlessness. World Bank is not CIA - it cannot take out a corrupt official. It has allegedly got to give jobs to some relatives of these corrupt officials -as price of doing business with these countries .
In a role play at Harvard I was chosen to play World Bank disburising $200 million, other classmates played USAID, UK's AID -(DFID??) etc . The professor (guest faculty - helping with education in Africa while working for World Education, Boston) played the role of education minister.  I being tallest and largest aid offerer was asked first. Hey , can you get my son a job with the bank. I said, "Sure!!"  "Great!! you get the approval for funding our projects."

umesh

Corruption in India like Africa: WB official

Bribery in the World
Bank's lending methods is as rampant as ever, says a former Bank
official who has written a book on this corruption. Steve Berkman contends that Indian IT majors Satyam [Get Quote] and Wipro [Get Quote],
who were barred from World Bank projects for offering their stock to
Bank officials, represent a miniscule problem compared to the kickbacks
and commissions that go to government officials for approval of Bank
projects. Berkman,
who was an advisor to various project teams within the Bank on human
resource issues and capacity building, retired from the Bank in 2002.
He is the author of an expose on corruption in this multilateral
institution titled, The World Bank and the Gods of Lending, based on his 16-year experience auditing Bank projects, including the $800 million loan to health sector projects in India. While most of his experiences were in Africa and Latin America, he said the corruption "I've seen there (in India) is no different than what I've seen in Africa and other places." In an interview with rediff India Abroad,
Berkman said he strongly believes that Paul Wolfowitz was pushed out of
his position as World Bank president after an entrenched bureaucracy at
the Bank disliked his anti-corruption campaign and not because of the
mini-scandal about his girlfriend, which "was more of a side-show." The
problems for Wolfowitz -- a former Bush administration official --
began in July 2005 when Berkman said he suspended the massive Bank loan
for health sector projects in India because of allegations of
corruption. "My
experience has been that -- and again, one of the things I was trying
to shed some light on in my book -- is that almost always (corruption)
emanated from government officials in these developing countries. In my
experience, they have always been the catalysts for the corruption and
the fraud." Berkman,
now 75 and living a retired life in Leesburg, Virginia, near
Washington, DC, says the gods of lending are the international
bureaucrats who run the Bank and are the ones who conspired to nail
Wolfowitz using the mini-scandal with his girlfriend to call for his
ouster. "Quite
often," he argued, "everybody seems to be talking about the companies
that bribe these officials, but what never seems to come out is that in
fact, it is the officials who are the catalysts for this and they are
the ones that are more of less coercing the business. That if you want
a contract you have to pay us -- that kind of thing." In
most developing countries, Berkman said, "the spectre of corruption
throughout the governments in these countries -- I mean nothing is done
in some countries at all for the benefit of the people. It is merely
for the benefit of the people who are running the show." "But
as far as the Bank staff goes," Berkman said, "for many years, I would
have never believed that the Bank staff were also corrupt, but since
the early 1990s, I think it has become obvious that we have some bad
apples too." In
his book, in a scathing castigation of senior Bank managers and board
members -- the so-called gods of lending -- he writes that 'they have
created the myth that they are the "cutting edge" of development, while
they hide the appalling number of failures within the Bank's portfolio
-- failures that enrich the government elites of the Third World while
creating mounds of debt that cannot be repaid.' According
to Berkman, 'It is this single truth that exposes the hypocrisy of the
whole business: The Bank pretends it is lending for noble purposes,
while the borrowers pretend they will put the money to good use.' Instead,
he writes, how Bank funds are regularly 'placed in the hands of
officials with a history of looting national treasures.' In
the case of the $800 million loan to health sector projects in India, a
team of investigators found dummy companies that were paid by the Bank
for products and services that were never delivered and a plethora of
bribes and kickbacks that went into the pockets of senior government
officials. This was the basis of Wolfowitz's suspension of the loan to
India. In
the wake of allegations that by holding up a follow-up loan until the
discrepancies in the earlier loan had been fully investigated and fixed
he was 'depriving the poor of needed health care,' and that his actions
smacked of political considerations, Wolfowitz told Newsmax
that 'The India example is particularly interesting because it refutes
many of the objections that were commonly raised against the
anti-corruption efforts.' While
acknowledging that India was indeed a close strategic partner of the US
and a shining example of a successful developing democracy, Wolfowitz
told Newsmax that it 'didn't make it right to turn a blind
eye to corruption in World Bank health loans that were actually making
people sick,' because tainted pharmaceuticals had been bought by Bank
funds and distributed to the public. At the time a senior Bank official told rediff India Abroad
that when Wolfowitz had written to then Indian finance minister
Palaniappan Chidambaram about the alleged corruption and the Bank's
concern over corruption in India projects, an angry Chidambaram,
irritated by what he believed was the Bank president's patronising
tone, had curtly responded that India was as concerned or more about
corruption and implying that New Delhi did not need lessons about
fighting corruption from 'a holier than thou' Wolfowitz. India is the largest beneficiary of World Bank lending. In
the interview, Berkman acknowledged that since he left the Bank, it had
"done a lot in terms of fighting corruption and dealing with it, but at
the end of the day, I remain convinced that as much money is being
stolen now through bribes and kickbacks and embezzlement as there was
10, 15 years ago." He
said he did not believe "there has been any change although the Bank
now talks openly about corruption and has taken some steps to deal with
it." "I would be willing to bet that there is more money being stolen now than was stolen 10, 15 years ago," he added. In
the wake of the Bank banning Satyam, Wipro and Megasoft Consultants Ltd
for 'providing improper benefits to bank staff,' Berkman acknowledged
that firms vying for Bank contracts may have devised new ways of
bribing Bank officials through the offering of shares during Initial
Public Offers and such. "There are always ways to get around the system, but I don't see any big fish being caught and that's troublesome," he said. Berkman
said the IPO offerings to Bank officials were "the least of the Bank's
problems. At the end of the day, whatever they may have gotten with
stock options or whatever, I think is nothing compared to the rampant
corruption that is being practiced on the Bank's lending operations." "If
one would just take 10 percent as the rate of corruption on Bank-funded
projects -- I think last year they disbursed almost $25 billion -- then
10 percent is $2.5 billion," Berkman said, "and in many countries the
figure is much higher. When I worked in Nigeria, it was closer to 40
percent and most likely still is. That's an awful lot of money." "So,
in terms of where the Bank has come in the last 10 years, I feel that
they have made some progress, but they still have a very long way to go
-- people are still robbing them blind." While
senior Bank officials declare that things have changed and corruption
is not as rampant as it was, Berkman said, "my observations lead me to
conclude that things haven't changed at all. In fact, in private
conversations with a number of people who are still there, the general
consensus is that things are worse -- I mean worse in the sense that
they still circle the wagons and they are more concerned with appearing
to fight corruption than in doing anything about it." Although
making the case that Wolfowitz was forced out because he came up
against the 'gods of lending' with his anti-corruption efforts, Berkman
said, "Wolfowitz was a bad choice anyway. I mean he came to the Bank
with a lot of baggage. Let uss face it. He was not popular to begin
with and then he touched a very sensitive nerve at the Bank." 

Umesh Sharma

Washington D.C. 

1-202-215-4328 [Cell]

Ed.M. - International Education Policy

Harvard Graduate School of Education,

Harvard University,

Class of 2005

http://www.uknow.gse.harvard.edu/index.html (Edu info)

http://hbswk.hbs.edu/ (Management Info)

www.gse.harvard.edu/iep  (where the above 2 are used )

http://harvardscience.harvard.edu/

http://jaipurschool.bihu.in/

--- On Thu, 5/2/09, Chan Mahanta <cmahanta at charter.net> wrote:
From: Chan Mahanta <cmahanta at charter.net>
Subject: [Assam] Oh My!
To: assam at assamnet.org
Date: Thursday, 5 February, 2009, 6:04 PM

http://www.rediff.com/money/2009/jan/16-corruption-in-india-like-africa-world-bank-official.htm

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