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The real reason Wolfowitz is under fire

Published May 3, 2007 10:28 PM

From the bloody ground battles in Iraq to the lush board rooms of the World Bank, U.S. imperialism’s “New American Century” is in trouble these days.

Former deputy Pentagon chief and now World Bank president Paul Wolfowitz, prince of the neocons and architect of the Iraq invasion, is knee-deep in scandal. The man who began his tenure two years ago as head of the world’s largest so-called public financial institution with calls to battle “global corruption” stands charged with peddling favors to a woman friend at the bank.

Let’s not waste any ink on this tenth-rate issue. We’ll leave it to the right-wing enablers in the mass media who have turned objective political commentary into scandal-ridden drivel to spin the Wolfowitz story as a titillating tale of sex, lies and payola.

The real story is how the Bush administration has tried to shape the World Bank into a tool of its war agenda, and the limits of its ability to force the rest of the world to bend to its will.

When Wolfowitz was appointed by George W. Bush two years ago to head the World Bank, the European business journal The Economist, staunchly rightwing and conservative, editorialized that, “His appointment tells the world that Mr. Bush wants to capture the World Bank and make it an arm of American foreign policy.”

It should be added, however, that The Economist has no problem with the World Bank as an arm of European imperialist foreign policy.

Aid as a political weapon

Wolfowitz, next to Bush, has been one of the most visible and hated figures around the world for his role in Iraq, for the lies that justified the invasion, for the torture policies of the occupation, for the arrogance and the ruthless conduct of the war.

And now as head of the World Bank, Wolfowitz has imposed a brazen pro-U.S. agenda there as well. A feature story in the April 9 New Yorker magazine by John Cassidy titled “The Next Crusade” cites numerous instances to support this view.

For instance, in July 2005, the Central Asian republic of Uzbekistan ordered the U.S. to remove its troops and aircraft from an Uzbek base it had been using to support the war against Afghanistan. Two months later, Wolfowitz cut off an aid package to the country which was mostly going to rural water and health projects. No cutoff of monies was suggested for neighboring Tajikistan, a brutally repressive but pro-U.S. regime that gets millions in World Bank loans.

Wolfowitz has selectively used the “corruption” charge to deny loans to countries that try to exert a measure of independence from U.S. influence, like Congo-Brazzaville and Chad, poor African nations with rich natural resources. Both countries were denied development aid in the past year by the World Bank.

With Iraq, however, Wolfowitz has been most active in placing the World Bank at the service of the Pentagon.

First Wolfowitz made a series of top-level appointments at the bank to political cronies of right-wing governments that had been some of the strongest backers of U.S. policy in Iraq, such as El Salvador, Spain and Jordan. “He used his tenure in part to reward those governments and individuals who were particularly helpful to the U.S. in the Iraq war,” says Steven Clemmens of the New America Foundation.

World Bank and Big Oil

Then, last fall, Wolfowitz set up a permanent World Bank office in Baghdad. According to the Bank Information Center, a liberal nongovernmental organization that monitors the bank’s policies: “The institution is advising the International Monetary Fund (IMF) in the development of the oil sector strategy. More broadly, the Bank is advising Iraq on attracting foreign direct investment through quickly developing investor friendly laws and also advising on reforming [privatizing—BD] state-owned enterprises. In addition, the Bank is participating in meetings with the IMF, Iraq Minister of Finance, and the International Tax and Investment Center (ITIC) on Iraq’s oil sector. The ITIC is a business lobby group comprised of BP, Chevron, Eni, ExxonMobil, Shell and Total.”

“Wolfowitz’s apparent determination to use the World Bank to further questionable American military goals in the Middle East is a ... violation of its founding Articles of Agreement, and a reckless waste of donor resources,” said Bea Edwards, International Program Director of the Government Accountability Project, a nonprofit public interest group and whistleblower protection organization.

“In fact, the Bank is prohibited from operating in a conflict like this,” added Edwards. “In the simplest financial terms, there is no functioning banking system, the government does not control its territory.”

The World Bank and the IMF are leaning on the Iraqi Parliament to establish a Federal Oil and Gas Council, staffed by Big Oil executives. “The new law would grant the council virtually all power to develop policies and plans for undeveloped oil fields and to review and change all exploration and production contracts,” Juan Gonzalez reported in the Daily News on Feb. 21. The Iraqi National Oil Co. would be defenseless against these foreign companies.

“Since most of Iraq’s 73 proven petroleum fields have yet to be developed, the new council would instantly become a world energy powerhouse,” Gonzalez wrote. Contracts with international companies will likely be similar to controversial production-sharing agreements, which sign away the lion’s share of oil profits to foreign investors.

The World Bank was formed in 1945 with the specific intent of projecting U.S. power in the post-war era. The bank’s president is always from the U.S., the bank’s headquarters are in Washington, and the U.S. has a permanent veto. It is under fire in many countries around the world for the severe austerity measures that it forces upon developing nations, including demands for privatizing industries and looting national resources and native industries for the sake of foreign capital.

But the World Bank in the past has also been a coalition effort by U.S., European and Japanese capital, with significant bank funds provided by non-U.S. sources.

Today, however, the Bush administration and its big business masters are not interested in coalitions. They demand total control. This is nowhere better revealed than in the infamous document co-authored by Wolfowitz himself seven years ago titled “Rebuilding American’s Defenses.” This manifesto of the so-called Project for the New American Century has been called the “Mein Kampf” of the neocon movement. It projects a world of U.S. global domination, calling for massive increases in military spending, for covering the planet with Pentagon bases, for a near-permanent state of military readiness, and for regime change wherever U.S. capitalism’s political and economic interests are threatened.

But this reactionary utopia is collapsing on the ground in Iraq, where popular resistance to U.S. aggression continues to grow. And while we would much rather see Wolfowitz brought up on charges of war crimes than on a two-bit misdemeanor for influence peddling, the fact is that his woes at the World Bank are yet another sign that the Bush administration is on the defensive and unable to impose its will on an unwilling world.