Monday, April 24, 2006

Wasted Arrows?

The frustration is evident in John O'Shea's letter in today's Irish Times (subscription required). The World Bank has relieved billions in debt for some very corrupt governments including Rwanda, Mozambique, and Uganda. Debt Relief was supposed to mark a step forward from the bad old days of aid money enabling corrupt leaders to augment among other things their Swiss Bank accounts. Such practice was not only terribly wasteful it also discouraged donors from coming up with further aid.

Aid and debt relief are not benign pills. They need to be administered intelligently or they will cause great harm. Some of the downsides are that they
-can create dependancies
-relieve governments of some of their duties of care to their citizens
-decrease the amount of leverage available to coercise reform

John O'Shea is no doubt frustrated as once these arrows are wasted there is less available in the quiver. His charity GOAL is reknowned for its efficiency and for their selection of projects to maximize impact for those who need it most. The World Bank would counter that they are fighting the problem going forward and they are getting to grips with corruption, today's FT reports -
Paul Wolfowitz, the president of the World Bank, yesterday pledged to develop a formal framework for dealing with corruption in developing countries, a move urged on him by European shareholders anxious that his anti-corruption drive should not paralyse the bank's lending and lead to it abandoning people in need.
Britain and some other European countries have pressed Mr Wolfowitz, the former US deputy defence secretary, to put greater emphasis on fighting corruption by building institutions in the developing world rather than simply suspending loans where corruption is suspected.

It seems like an impossible task but they are persuing more than one avenue. Rather then focusing solely on corrupt regiemes they are recognising that for every bribe taker there is a bribe giver and that many of these bribe givers are western. They already have a blacklist of such companies. Its a start.

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