[Peace-discuss] With Larry Summers' World Bank Bid in Trouble, Mexico Insists on Open Process

[Carl G. Estabrook]

Jeffrey Sachs’ Grab for the World Bank
by LAURA FLANDERS

There may be worse candidates for the presidency of the World Bank  
than Jeffrey Sachs (Larry Summers, also a candidate, comes to mind,)  
but Sachs is well worth raising an alarm about. He combines a new  
fangled profile as a progressive with policies that amount to full  
steam ahead for global growth. And he’s running as the candidate of  
“change”  clearly hoping no one looks too closely at his record as an  
economic hit-man.


In the US (if not in much of the rest of the world and certainly not  
CounterPuncht) Sachs’s closeness with the singer/crusader Bono bestows  
a liberal glow. He directs the Earth Institute at Columbia University,  
advises the UN and the Congressional Progressive Caucus, and he’s  
winning endorsements from among others, Congressman John Conyers and  
economist Mark Weisbrot.  He’ll attract predictable opposition from  
the Right who bristle at any mention of foreign aid, but although his  
media pals like to forget it now, Sachs was once evangelist number one  
for exactly the heavy-handed “fly-in-fly-out” development tactics that  
have made the world financial institutions so passionately hated.


Last week, John Cavanaugh of the Institute for Policy Studies and  
American University development professor Robin Broad laid out a raft  
of concerns to which Sachs responded thus: “I would be the first-ever  
development practitioner and anti-poverty professional to be World  
Bank President, just what is needed given the bank’s mission of a  
“world free of poverty.”


In Europe’s post-Soviet “transition” years, Sachs’s professional  
poverty expertise was mostly in increasing it. Russia, following  
Sachs’s callous “shock therapy” prescription, sold off state  
companies, suspended public subsidies and drove employment and life  
expectancy into the ground, with brutal long-term consequences,  
exacting the most savage costs in terms of death and suffering since  
the Second World War and the results of the Sachs experiment in  
Poland, Estonia and Slovenia weren’t much better.  While a handful of  
global gamblers got rich of the disaster, former World Bank economist  
David Ellerman, said of Sachs “Only the mixture of American  
triumphalism and the academic arrogance of neoclassical economics  
could produce such a lethal dose of gall.”  If Sachs could double  
suicide rates in Russia as a cocky young Harvard advisor, it’s hard to  
imagine what he could to the world as World Bank President.


In recent years, Sachs has taken a few turns. He embraces debt  
forgiveness (some) and has some nasty things to say about world  
military spending in his book “the End of Poverty.” But the business  
of “poverty reduction” is a complex one. The World Bank’s calculations  
have been incisively discussed here by Adam Parsons. Suffice to say,  
there’s extreme poverty and there’s just getting by. In the same way  
when it comes to development, there’s total exclusion from the world  
economy — and there’s becoming a cog in it. Sachs’s vision of a “world  
free of poverty” has more cogs in more wheels, but it’s the same  
deadly machine driving the planet to the same nasty brink.


To cite one example. in his 2007 Reith lecture series “Bursting at the  
Seams” Sachs pushes new agricultural technology and commercial  
fertilizers to increase yields in low-life expectancy countries.  
“Africa can and must have a Green Revolution as India initiated nearly  
forty years ago.” He celebrates increased yields and dismisses  
concerns about environmental damage and rising debt, claiming that  
“Older techniques for replenishing soil nutrients, such as the  
rotation of farm lands, allowing the replenishment of nutrients on  
land left to fallow for 10 or 20 years, are no longer feasible.”  To  
top things off, there’s a dose of “population control” in Sachs’s  
mix.  “The evidence is overwhelming that it’s possible and necessary  
to have a rapid demographic transition on a voluntary basis to greatly  
reduce fertility rates in poor countries,” said Sachs.


Old arguments linking high population with high poverty are back in  
vogue in the context of contemporary planet-panic, but really, they  
miss the point. While growing population in poor countries has its  
environmental impacts, high-level consumption lifestyles in rich  
countries are much more of an immediate threat. Listen the small scale  
farmers of countries like Mali and Burkina Faso who gathered at the  
World Social Forum in Kenya a few years back and they report that  
traditional farming techniques like fortifying soil with manure and  
mixing the crops grown on the same piece of land are rehabilitating  
degraded farms and farmers, both. Lying fallow for a generation  
doesn’t come up.


It’s here that one sees the “old” Sachs in the new. To return to  
Ellerman– the analysts of “shock therapy” have long gotten it wrong,  
he writes in an essay, Lessons from Eastern Europe’s Voucher  
Privatization. In the post-Soviet states, the crucial distinction  
wasn’t so much between the fast-shockers and the incrementalists,  
rather, Ellerman points out, “Reform-mongers, in their strategies and  
even more so in their rhetoric, could be divided into those who take  
an ideological, fundamental, and root-and-branch approach versus those  
who take an incremental, piecemeal, home-grown, and adaptive  
approach.”  From what he says now about global agribusiness and it  
seems that not much has changed in Sachs’s approach to the adaptive,  
home-grown initiative — even as the sane world is increasingly  
convinced that those are the only strategies with any chance of heading


The fact that he’s campaigning for the World Bank job as the candidate  
of the new regime makes all this particularly hard to take. Since Paul  
Wolfowitz resigned under a cloud in 2007, new rules at the World Bank  
are finally permitting countries than the US and Europe to determine  
who heads the world’s financial institutions (since world war two it’s  
been the World Bank for the US, and a European at the IMF). Europe  
nominated Christine Lagarde for IMF president last year. She won over  
other candidates. For the World Bank post, the U.S. has quietly  
floated names like Susan Rice, John Kerry and Larry Summers to replace  
Robert Zoellick when he steps down June 30. Predicting he won’t be the  
US’s official pick, Sachs has gotten seven countries to endorse him,  
including Haiti, Jordan, Kenya, Malaysia and east Timor.

By March 23, we’ll know how all this plays out. Meanwhile, according  
to the open-source website, WorldBankPresident.org which is tracking  
these developments, a slate of countries with new financial capacity  
to compete with the US are taking steps to form a World Bank  
alternative. Quite possibly, at a meeting in India later this month,  
Brazil, Russia, India, China and South Africa may set up their own  
development bank with the goal, they say, ”to escape the dollar and  
the euro hegemonies and, if Chinese plans go well, making the yuan a  
global currency.” We’ll see what Sachs has to say about that adaptive  
initiative.

LAURA FLANDERS is the host of The Laura Flanders Show coming to public  
television stations later this year. She was the host and founder of  
GRITtv.org. Follow her on Twitter: @GRITlaura.

http://www.counterpunch.org/2012/03/20/jeffrey-sachs-grab-for-the-world-bank/


On Mar 19, 2012, at 12:35 PM, Robert Naiman wrote:

> http://www.huffingtonpost.com/robert-naiman/larry-summers-world-bank_b_1362716.html
>
> Early last week the New York Times reported that despite all the  
> previous fine rhetoric about the G20 and consultation and open  
> process, the U.S. Treasury Department had decided to rule by decree  
> and impose its own candidate for the next president of the World  
> Bank, the G20 be damned. U.S. officials informed G20 officials that  
> the U.S. intended to "retain control of the bank," as the Times put  
> it. According to the Times, the G20 countries grumbled but showed no  
> sign of being willing to fight Treasury. The U.S. candidate would be  
> a "lock," the Times said, "since Europe will almost certainly  
> support whomever Washington picks."
>
> Since the International Monetary and the World Bank were created,  
> the U.S. and Europe -- which control around half of the voting  
> shares of these institutions -- have colluded behind closed doors to  
> determine the institutions' top leaders, with Europe selecting the  
> head of the IMF with U.S. support and the U.S. selecting the head of  
> the World Bank with European support. In recent years, developing  
> countries have complained loudly about this practice -- a practice  
> which would be illegal if the World Bank were subject to the  
> Illinois Open Meetings Act -- and under pressure the World Bank has  
> adopted governance reforms that are supposed to guarantee an "open,  
> merit-based process" in selecting the president. But Treasury was  
> claiming that there wasn't going to be any open process, it was  
> going to be Treasury diktat.
>
> But over the course of the last few days, the world has changed.
>
> First, development expert Jeffrey Sachs' public candidacy, and  
> Treasury's rude dismissal of his candidacy -- not even putting Sachs  
> on its "short list," although countries in Africa, Latin America,  
> and Asia have publicly endorsed Sachs' candidacy -- planted the seed  
> of hope that there might be a real race after all. Then 27 Members  
> of Congress, led by Michigan Democrat John Conyers and, sent a  
> letter to President Obama, urging Obama to nominate Jeff Sachs...
>

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