Promise-breaking at the World Bank, Part 3: Contenders

It is onto the terrain of unprecedented global financial malgovernance that Kim now strides. To be sure, on the way, he’s being tripped up a little by disgruntled neoliberals like Reuters columnist Felix Salmon, who concludes, correctly, “the US government in general, and the Geithner-Clinton axis in particular, doesn’t actually want any real change at the World Bank. Change can only come from a strong president who is strongly supported by the US, which has veto power over any real changes. Kim will be a weak president.” (

Salmon and far-sighted ‘establishment’ allies – The Economist, New York Times, Financial Times and dozens of ghastly Old-Guard WB executives ( – support Nigerian Finance Minister Ngozi Okonjo-Iweala, who was nominated by the governments of Nigeria, South Africa and Angola. A few years ago, Okonjo-Iweala served as Zoellick’s understudy, without visible discomfort, aside from “causing great turmoil” by abolishing new WB staffers’ open-ended contracts against the advice of her human resources department. (

Most importantly, she gave the West enormous assistance seven years ago in maintaining neo-colonialism in Abuja at a difficult time. As a result, writes a Foreign Policy blogger, backing Okonjo-Iweala’s candidacy is “an easy ‘reformist’ stance for economic conservatives to take. As these sources all note in their endorsements, Okonjo-Iweala is a fairly orthodox, free market, growth-oriented economist.” (

Free markets and growth are rarely so ‘easy’ to fuse, of course, and Okonjo-Iweala was not particularly successful in Abuja. According to the Nigerian Guardian columnist Sonala Olumhense, “She was one of those who put together the National Economic Empowerment and Development Strategy (NEEDS), which, we were assured, would cure employment in Nigeria before our very eyes. NEEDS, when the scheme was launched early in 2004, would create seven million jobs within three years, they told us, one million of them before the end of the year alone.” (

For Olumhense, “It was the original 419 [Nigerian financial scam]. Let me date-stamp all of this: Okonjo-Iweala was a key member of the powerful ‘economic reform team’ of that hour. In just months, NEEDS slipped into folklore; nobody from that team has acknowledged its existence since then, let alone taken responsibility for its deception.”

Last August, continued Olumhense, “at a media briefing to showcase the government’s economic priorities, she said that the major thrust of the administration’s economic agenda was ‘jobs and pro-jobs growth.’ Okonjo-Iweala did something else on that day. She spoke of the much-awaited ‘Transforming Nigeria Document,’ a mysterious guide that has remained unpublished until this day.”

Then there was the “Vision 20:2020 blueprint” which for Okonjo-Iweala was “the bedrock of the economic agenda. But Vision 20:2020 is a myth, like transformation, or NEEDS, or reform, or the war against corruption,” concludes Olumhense.

This was confirmed by former Central Bank Governor Charles Soludo, quoted by Olumhense as ridiculing “the whimsical origins of Vision 20:2020.” Confessed Soludo, “The impetus was the Goldman Sachs report on the BRIC countries and the Next 11 countries, which included Nigeria… We all know it is not achievable… it remains a wish list. The numbers simply do not add up. At best, it is a good slogan and an interesting joke.’”

The same dynamics worked in relation to debt relief. Back in 2005, Nigeria’s rowdy parliament was regularly rejecting foreign loan repayments as undemocratic and corrupt, given the country’s desperate poverty and the debts’ origins in the country’s military dictatorships. So Okonjo-Iweala first came to the world elite’s attention by working on behalf of the debt-collection mafia known as the Paris Club, with its representatives from the US, Europe, Brazil, Japan and the Russian Federation. To their applause, by October 2005 she quickly emptied Abuja’s treasury under the rubric of ‘debt relief’.

IMF rip-off artists explained the scam: “The agreement envisages a phased approach, in which Nigeria would clear its arrears in full, receive a debt write-off up to Naples terms, and buy back the remainder of its debt. The agreement is conditional on a favorable review of its macroeconomic and structural policies supported by the Fund under a nonfinancial arrangement.” (this and the next four citations are from

What that meant was that Nigeria, $6.3 billion in arrears, would first pay $12.4 billion in up-front payments. As Rob Weissman of Multinational Monitor reported, “You can celebrate this deal, as the Paris Club does, if you ignore the fact that creditors generally write down bad debts as a matter of course (not charity), the billions over principle that Nigeria has already sent out of the country, the fact that the deal imposes IMF conditionality on Nigeria (even though the IMF isn’t providing credit to the country), and the reality of the severe poverty in Nigeria.”

Complained the Global AIDS Alliance, “The creditors should be ashamed of themselves if they simply take this money. These creditors often knew that the money would be siphoned off by dictators and deposited in western banks, and the resulting debt is morally illegitimate. They bear a moral obligation to think more creatively about how to use this money. Nigeria has already paid these creditors $11.6 billion in debt service since 1985.”

According to Soren Ambrose, then based at Jubilee Africa, “The Paris Club requires that countries applying for relief be under an IMF program, but the prospect of agreeing to one is political dynamite in Nigeria. The Paris Club was however under great pressure to complete a landmark deal with Nigeria, where the legislature had threatened to simply repudiate the debts, so the PSI was deemed an acceptable alternative. Okonjo-Iweala told Reuters on May 18 that ‘the IMF makes sure it is as stringent as an upper credit tranche programme and then monitors it like a regular program, but the difference is that you develop it and you own it.’”

But actually, you don’t own it, they own you. What the Nigerian case illustrates is that the IMF pulls strings on behalf of the G8 ‘donor’ countries, and the G8 will continue to support the IMF if such functions benefit northern countries.

According to the leader of Nigeria’s Jubilee network, Rev David Ugolor, “The Paris Club cannot expect Nigeria, freed from over 30 years of military rule, to muster $12.4 billion to pay off interest and penalties incurred by the military. Since the debt, by President Obasanjo’s own admission, is of dubious origin, the issues of the responsibilities of the creditors must be put on the table at the Paris Club. As desirable as an exit from debt peonage is, it is scandalous for a poor debt distressed country, which cannot afford to pay $2 billion in annual debt service payments, to part with $6 billion up front or $12 billion in three months or even one year.”

So as a result of this deal and others like it, what Okonjo-Iweala accomplished can be summarized in a graph from an IMF report on the financial meltdown, which shows quite clearly that if you sell your family silver – all your reserves – in exchange for the write-off of vast ‘total public debt’ that could never have been repaid in any case, your Paris Club reward is to actually increase your rate of debt repayments to overall revenues. If you are a low-income African country, Okonjo-Iweala’s gambit means that although technically you owe half what you used to, in relation to GDP, you are now are milked even harder (50 percent more from 2008 to 2009, during the worst economic crisis in memory).


If we take this logic to its extreme, then from the standpoint of promoting social justice, Okonjo-Iweala would be a better choice for WB president than Kim, because having repeatedly done deals of this sort against her constituents’ interests, it is fair to say that no one in Nigerian history united the country’s poor and working-class majority so effectively.

To illustrate, a few weeks ago Okonjo-Iweala doubled the fuel price overnight, on the instruction of IMF Managing Director Christine Lagarde, and thereby introduced an ‘Occupy Nigeria’ spirit that helped connect the dots between Wall Street and African austerity. Usually without such dot-connecting the result is an ‘IMF Riot’ by furious citizenries, but the protest normally pops up briefly and dies down, leads to intense violence and achieves very little.

However, thanks to Okonjo-Iweala’s arrogant subsidy-cut advocacy, that social fury was transformed into mass non-violent strikes (although her police killed several unarmed demonstrators) and after a week, prior to desperate state concessions and trade union capitulation, it very nearly toppled the Goodluck Jonathan regime.

Such unique experience surely qualifies Okonjo-Iweala to play a role in humanity’s greatest task in coming months and years: uniting a coherent global people’s movement against the One Percent that would make the 1999 Seattle World Trade Organisation protest look like kindergarten training for Occupiers. What more could the 99 Percent ask of old WB in his fading days?

A similar case for Okonjo-Iweala is made by her compatriot, Ikhide Ikheloa, who first confirms the credentials required for a promotion: “There is no one else better primed to execute the obnoxious policies of the World Bank against African and brown nations than Okonjo-Iweala. Her current tour of duty, although disastrous to Nigeria and her poor, has given her an impeccable resume to spread the World Bank’s gospel of uncritical capitalism and indifference to the world’s poor and dispossessed.” (

After all, says Ikheala, WB “is an ancient bureaucratic relic whose time has come and gone” and, suffering within their own apparent stage of economic dementia, “The fawning over Okonjo-Iweala by Westerners has been comic… Under normal circumstances, were Okonjo-Iweala a Westerner or white, she and her bumbling team would have been fired for gross incompetence. The show of double standards is galling and maddening.”

Still, Ikheala pleads, the ordinary Nigerian would love to see her backside, even if it means being kicked upstairs: “When Okonjo-Iweala departs for the World Bank, she will be leaving Nigeria much worse than she found it. That is the most compelling reason why she deserves the World Bank presidency. Nigerians need a break.

Such passion and impeccable logic is quite hard to argue against, if we want to express solidarity with Okonjo-Iweala’s 150 million+ victims.

Still, the case of the other contender, Jose Antonio Ocampo, needs more investigation before we might conclude which candidate deserves WB leadership – or preferably, who can best manage WB decommissioning. An important qualification so far unmentioned: who can throw the best retirement party?

As Colombia’s Central Bank chairperson and Minister of Finance and Public Credit, of National Planning, and of Agriculture and Rural Development during the years 1989-97, serving one of the world’s most brutal governments, Ocampo surely participated in Cabinet meetings in which not retirement, but instead the murder of ten thousand trade unionists, human rights advocates and ordinary citizens by mushrooming paramilitaries was discussed, condoned, advocated or even celebrated?

I don’t know whether or not this is the case, but the best Latin American student I ever had, Jasmin Hristov, wrote the book Blood and capital: The paramilitarization of Colombia about this period: “It is not a mere coincidence that during the era of accelerated neoliberal restructuring, the deterioration in the living conditions of the working majority has been accompanied by an increase in the capabilities and activities of military, police, and paramilitary groups, as well as the portrayal of social movements as forces that must be monitored, silenced, and eventually dismantled.” (

Given how many illustrious economists endorsed Ocampo, one would hope he has clean hands – but then again one would hope that before signing, those economists might have explored the embarrassing possibility of Ocampo’s fingerprints on our comrades’ corpses. Then again, they are economists, so probably it didn’t cross their minds. And at least Ocampo is now a committed Keynesian. In his recent advocacy for exchange controls and in a wide-ranging Challenge magazine interview, he comes down clearly on the left side of the discipline, aside from one faux pas: advocating another ‘Green Revolution’ for Africa. (

Regardless of the two contenders’ foibles, it still makes sense to assume that Kim will be elected with a slight majority of votes – don’t forget, WB’s Board enjoys vote-per-dollar ownership ‘democracy’ – held by the US, Canada, Japan, Korea and most probably Europe. Brussels owes Washington for helping hammer up that late-1940s ‘Europeans-Only’ sign (ubiquitous here in South Africa before 1994) on the IMF Managing Director’s door last year, permitting Lagarde – while facing investigation for massive fraud on behalf of a Conservative Party donor – to be selected over the other candidate, Mexico’s neoliberal central banker.

(Her predecessor as both IMF boss and French Finance Minister, Dominique Strauss-Kahn had apparently overdosed on Viagra in a Times Square hotel – or was it a Lille brothel? – a few weeks earlier. They do scrape the bottom of the barrel for globo-gov management these days, don’t they.)

It is also safe to assume that when it comes to serving power, Kim will be more reliable and effective, simply because he’s imperialism’s choice, as against Brazilian and South African subimperialisms’ vain hopes. The oft-recited yet so far mythical potential of BRICS countries to challenge the system, in search of a few more crumbs from the table (for never would BRICS’ economically-obsequious leaders question what’s served for dinner or how it’s made), was dashed by Brasilia’s and Pretoria’s disunity: they couldn’t even decide to promote a single candidate, nor, in early April, has Brazil’s finance minister even decided to vote for the man, Ocampo, he nominated in late March.

So even if he avoids the April 9 Washington Post debate between WB presidential candidates, as is anticipated since Kim’s high-minded talk of openness and transparency in the FT will be his next broken promise, the winner in the WB Board selection in mid-April will be Kim. Recall that a factor working firmly in his favour, amongst the decidedly undemocratic electorate favouring the status quo, is Kim’s failure to initiate cultural change where it was so desperately needed, in the little One Percenter community of Dartmouth.

This, in turn, will make it easier to understand the same behaviour in Washington in relation to the 99 Percent’s needs, after a banal honeymoon that, like Obama’s first 30 months, may briefly deflect the cause of justice. After all, others have tried the WB insider-reform route – Stiglitz on economic philosophy, Caroline Moser in gender policy, Herman Daly on environment, John Clarke on NGO relations – and failed miserably. One day in 2012 or 2013, it is safe to predict, Occupy World Bank will need to move in and move Kim out, for his own good.

Before then, he will no doubt recall for WB minions the sickening strategy that served him so well in the noxious Ivy League, and that in coming months will work fine for a few thousand neoliberal economists – though not so well for species survival: “One of the things you learn as an anthropologist, you don’t come in and change the culture.”

The most appropriate attire for the slick status quo moves required – that outfit in which Kim was introduced to so many of us – is a studded leather jacket with spaceman sunglasses. Tempting as it is to admire his talk-left walk-right robot-dance (I certainly do), Kim’s razzle-dazzle really shouldn’t distract the rest of us from persuasively insisting that WB do what should have seriously been considered years ago: gracefully retire and stop causing so much trouble out here.

Patrick Bond directs the UKZN Centre for Civil Society (, which on Wednesday hosts a debate on the Bank presidency

3 thoughts on “Promise-breaking at the World Bank, Part 3: Contenders

  1. Pingback: Red flags at Ngozi’s CGD speech | World Bank President

  2. I agree. This press rekease on ngozi is totall malicious and untrue. . Those were tough decisions she made and nigerians release that one way or another fuel subsidy has to go since it is being used to line up the pockets of cabal… She was bold to call a spade a spade.. Stop the smearing campaign. Its irritating.

  3. Fuel subsidy in Nigeria is a conduit for corruption. Powerful guys in corridors of power are major gainer. These guys control the media and other powerful organ of government.

    So, when Ngozi decided to agree with the 36 state governors of Nigeria to remove the subsidy, you can be assured that this powerful guys would only come after Dr. Iweala.

    The removal of fuel subsidy and the repayment of Nigeria’s debt was done in the interest of Nigeria. The status-quo would go all out to discredit that!

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