Saturday, March 19, 2005

Stiglitz rejects Wolfowitz nomination

As reported in the Daily Telegraph, a pillar of Britain's conservative establishment. Money:

"This is either an act of provocation by America, or an act so insensitive as to look like provocation," he says. "The World Bank will once again become a hate figure. This could bring street protests and violence across the developing world...."

"My worry," says Stiglitz, "is the World Bank will now become an explicit instrument of US foreign policy. It will presumably take a lead role in Iraqi reconstruction, for instance. That would seriously jeopardise its role as a multi-lateral development body."

This is Stiglitz's first public utterance since last week's nomination. His views matter. When he was the World Bank's chief economist - under the current president, James Wolfensohn, whose decade-long tenure ends in June - he rebuilt its reputation.

Stiglitz steered the organisation away from the discredited diet of fiscal austerity and rapid market liberalisation it had force-fed developing countries for years. He fears a reversal if Wolfowitz takes the helm, and imports his tough-minded Pentagon instincts.

"In recent years, more moderate policies and an anti-poverty focus have won the bank much more respect across the developing world," he says. "That progress would be badly undermined by an extreme turn to the right."

In the last ten years the Bank has reemerged as an institution worthy of respect, doing innovative influential work, as exemplified by its annual World Development Reports (though the last couple have been a bit boring). No doubt the Bushies would like to derail this progress, lest the Bank come to serve as an example of what multilateral institutions can accomplish.

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