Allegations of corruption

The World Bank is supposedly working against corruption both outside and within its organisation. Its website states:

Recognizing that any program to assist in controlling corruption worldwide needs to start with the example of best practices at home, the Bank has taken initiatives to stamp out conflicts of interest and any possible corrupt practices among its own staff.[3]

Beginning in 2005, Paul Wolfowitz, President of the World Bank, allegedly used his position to influence a pay and grade increase for his girlfriend Shaha Riza. Riza, who had held a position at the bank before Wolfowitz was appointed president in June 2005, was required to leave the bank and re-assigned to the State Department to avoid a conflict of interest, working in the office of Liz Cheney, daughter of Dick Cheney, while remaining on the bank's payroll. Her salary was increased from nearly $133,000 to tax-free compensation of $180,000, and eventually reached $193,590 after subsequent raises. The panel concluded that the salary increase "at Mr. Wolfowitz's direction" was "in excess of the range" allowed under bank rules. As a result of this controversy, Paul Wolfowotz has resigned effective June 30, 2007.^{[citations needed]}

Further information: Shaha Riza#Wolfowitz Scandal, Paul Wolfowitz#Wolfowitz's relationship with Shaha Riza, and Paul Wolfowitz#Wolfowitz's leadership of the World Bank.

The World Bank head of "Institutional Integrity" department is Suzanne Folsom. She is the wife of George Folsom who is the President of the International Republican Institute and a personal friend of Paul Wolfowitz. According to the Financial Times her appointment as "a person close to Mr Wolfowitz, and with a political background...to a unit that was seen as independent of the president’s office since it was set up in 2001" was met with great concern by some senior staff. Wolfowitz's efforts to control the bank are seen by some senior staff to have led to "a lack of consultation by Mr Wolfowitz’s advisers, and an atmosphere of suspicion."^[11]

Criticism

The World Bank has long been criticized by a range of non-governmental organizations and academics, notably including its former Chief Economist Joseph Stiglitz, who is equally critical of the International Monetary Fund, the US Treasury Department, and US and other developed country trade negotiators.^[12] Critics argue that the so-called free market reform policies – which the Bank advocates in many cases – in practice are often harmful to economic development if implemented badly, too quickly ("shock therapy"), in the wrong sequence, or in very weak, uncompetitive economies.^[13]

World Bank standards and methods are, however, highly valued and adopted in areas such as transparent procedures for competitive procurement and environmental standards for project evaluation.^{[citation needed]} World Bank also engages in funding the education of promising young people from developing countries through its graduate scholarship programs.

A young World Bank protester takes to the street in Jakarta, Indonesia.

In Masters of Illusion: The World Bank and the Poverty of Nations (1996), Catherine Caufield makes a sharp criticism of the assumptions and structure of the World Bank operation, arguing that at the end it harms southern nations rather than promoting them. In terms of assumption, Caufield first criticizes the highly homogenized and Western recipes of "development" held by the Bank. To the World Bank, different nations and regions are indistinguishable, and ready to receive the "uniform remedy of development". The danger of this assumption is that to attain even small portions of success, Western approaches to life are adopted and traditional economic structures and values are abandoned. A second assumption is that poor countries cannot modernize without money and advice from abroad.

A number of intellectuals in developing countries have argued that the World Bank is deeply implicated in contemporary modes of donor and NGO driven imperialism and that its intellectual contribution functions, primarily, to seek to try and blame the poor for their condition.^[14]

Defenders of the World Bank contend that no country is forced to borrow its money. The Bank provides both loans and grants. Even the loans are concessional since they are given to countries that have no access to international capital markets. Furthermore, the loans, both to poor and middle-income countries, are at below market-value interest rates. The World Bank argues that it can help development more through loans than grants, because money repaid on the loans can then be lent for other projects.

In The Globalisation Tapes (http://www.imdb.com/title/tt0407827/) an Indonesian palm plantation worker states that his son has to help him meet his daily quota. For this ton of fruit that is worth over $31 he and his unpaid son get only $1.14 in wages.

AIDS controversy

The World Bank is a major source of funding for combating AIDS in poor countries. In the past six years, it has committed about US$2 billion through grants, loans and credits for programs to fight HIV/AIDS.^[15] Its critics, however, claim these financial expenditures to be insufficient. In the 2005 Massey Lecture, entitled "Race Against Time", Stephen Lewis argued that the structural adjustment policies of the World Bank and the International Monetary Fund have aggravated and aided the spread of the AIDS pandemic by limiting the funding allowed to health and education sectors.^{[citations needed]}

Other information

The World Bank provides summer internships to local DC students at its headquarters every year. This youth development program is a large investment in the city's youth and the World Bank partners with a local nonprofit, Urban Alliance Foundation, to provide this opportunity.