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Masters of War...and Finance

A Profile of the World Bank's Presidents

Debra Efroymson
Dhaka, 2011

A friend commented recently that a colleague's new job "demonizing the oil industry" is too easy; one should choose tougher targets. So perhaps it is inappropriate to write about the World Bank, when so many have already said so much about its destructive policies. Nevertheless, I couldn't help but be amused at the realization that the architects of the two most unpopular wars the US has fought in recent history (Vietnam and Iraq) both went on to become presidents of the World Bank.

The Bank's slogan is "Working for a world free of poverty." If leadership has any influence on action, it would seem interesting that those expert at designing wars are set loose in the world to fight poverty. Is that the key qualification, or just a random coincidence? I thought it might be interesting to see what the profiles of some of the presidents of the World Bank tell us about the its apparent approach to ending poverty.

To date, there have been ten presidents, not counting the current one. Here are very brief bios of each one, focused not on what they did as president, but whether (to test my hypothesis) they had some experience in war-mongering to help them out in the job of addressing poverty.

Going back to its early days, we have Eugene Meyer, briefly President from June 1946 to December 1946. Among other things, he was the head of the War Finance Corporation.

We then have John Jay McCloy, who served from March 1947 to June 1949, who "started up the Bank's business and lifted its vision from reconstruction to development." McCloy served as Assistant Secretary of War where, admittedly, he opposed the atomic bombing of Japan--but also refused to endorse compensation to Japanese-Americans held in internment camps, or bombing raids on the rail approaches to Auschwitz concentration camp. He also pardoned convicted Nazi war criminals when he served as High Commissioner for Germany.

Immediately following McCloy was Eugene Robert Black, from July 1949 to December 1962. Admittedly his war experience was limited to having been in the Navy; he did share with others corporate experience, becoming the vice-president of Chase National Bank and the senior vice-president of Chase National's investment portfolio. (Corporate ties are fine, even essential; after all, the Bank's mission includes "forging partnerships in the public and private sectors." You know, "partnership," that relationship between a giant corporation and a typically weak government....)

Next comes George David Woods, January 1963 to March 1968. Apparently Woods, unusually for a World Bank president, had no military background; he was simply vice president and later chairman of the board of First Boston Corporation, a newly formed securities company, which became one of the largest investment banking firms in the US.

Then comes a man with whose name we are familiar, and who had a long term at the Bank: Robert Strange McNamara, President from April 1968 to June 1981. The Bank describes him as an "expansionist with a social consciousness...indefatigable builder and wielder of influence on behalf of the Bank and the development cause." McNamara had been President of Ford Motor Company, and as Secretary of Defense (1961-1968) was the prime architect of the Vietnam war. Now see if this sounds familiar: US troop involvement in Vietnam leapt from 900 to 16,000 following the Gulf of Tonkin Incident, in August 1964, "when North Vietnamese naval vessels were falsely reported as firing on two U.S. destroyers. McNamara was instrumental in presenting this event to Congress and the public as a pretext for escalation. The Vietnam conflict came to claim most of McNamara's time and energy." Hmm, distorting evidence in order to justify US involvement in a war...where else have we heard that one?

Not much to say about Alden Winship Clausen, who was president from July 1981 to June 1986. His main activities seem to involve climbing the ranks of BankAmerica.

Clausen was followed by Barber Conable, July 1986 to August 1991. He "spurred on the greening of the Bank...became effective spokesman for the Bank and persuasively advanced the institution's reform agenda." His activities actually would appear to be positive: "He diverted the bank from its previous fascination with glitzy prestige projects towards schemes more clearly designed to relieve poverty. He encouraged far wider education in birth control, without which few Third World women could ever hope to improve their lot. He also insisted that the bank pay greater attention to the environmental impact of the large engineering schemes it decided to support.

Sounds even better when we read that "This shift of focus did not make him popular with President Reagan's successor, George Bush Sr. Conable commented after his retirement that Bush had wanted him to support an American agenda, while 'I thought I was there to help poor people'."

Conable apparently knew how to speak out: "He noted that most Americans assumed their country was a major player in the world's aid programmes when, in fact, it made the smallest proportional contribution of any industrial nation. 'In reality, large amounts of USAID money only go to countries where we have special strategic, political or military concerns, like Israel and Egypt,' he said."

Next in power was Lewis Preston, September 1991 to May 1995. A "distinguished commercial banker," he "created a client-oriented vision for the Bank as it celebrated its 50th anniversary." Before joining the Bank, he served as CEO of JP Morgan. His military record is limited: he served as a US Marine in the Pacific during World War II. Among other credentials, he considered Argentina's disastrous water privatization program an "example for all of Latin America." Well, yes...but perhaps not in the way he meant.

Following Preston, we begin the reign of the wolves. James D. Wolfensohn served from June 1995 to May 2005. According to the Bank's eulogy, Wolfensohn was "known as the Renaissance Banker. Pushed through reforms that have made the Bank more inclusive, with a renewed focus on poverty reduction." He apparently put his time at the Bank to good use: in 2005, "upon stepping down as president of the World Bank, he founded Wolfensohn & Company, LLC, a privately held firm that invests, and provides strategic consulting advice to governments and large corporations doing business, in emerging market economies." "Since 2006, Wolfensohn has also been the chairman of the International Advisory Board of Citigroup", and "In 2009, he became a member of the International Advisory Council of the Chinese sovereign wealth fund China Investment Corporation." Exactly whose poverty is he keen to reduce?

And finally we come to our favourite wolf, Paul Wolfowitz, June 2005 to June 2007. (Hmm, why so short a time, Mr. Wolfowitz?) Again quoting the Bank, Wolfowitz was "known as good governance banker who pushed through controversial governance and anti-corruption strategy after extensive global consultations. Placed Africa at the heart of the Bank's poverty reduction agenda."

Wolfowitz is also famously known as "a major architect of President Bush's Iraq policy and...its most hawkish advocate." After serving two years, he resigned as president of the World Bank Group "ending a protracted and tumultuous battle over his stewardship, sparked by a promotion he arranged for his companion." Wolfowitz, during his tenure as ambassador of Indonesia (1986-1989) also happened to be a good friend of Suharto despite his rather notoriously corrupt rule in Indonesia; all this during a time in which Wolfowitz was supposed to be fighting corruption. Apparently he saw no contradiction in his friendship and his anti-corruption stance, nor any need to challenge Suharto on the issue. That wouldn't be very chummy, now would it? Wolfowitz was also US Deputy Assistant Secretary of Defense in 1977, and Deputy Secretary of Defense from 2001 to 2005.

The currently reigning president is Robert Zoellick, who took office on July 1, 2007. Among other credentials, Zoellick signed the January 26, 1998 letter to President Bill Clinton from PNAC that advocated war against Iraq; served on a panel that offered Enron executives briefings on economic and political issues; and "in the 2000 U.S. presidential election campaign, Zoellick served as a foreign policy advisor to George W. Bush as part of a group, led by Condoleezza Rice, that called itself The Vulcans. James Baker designated him as his second-in-command--"a sort of chief operating officer or chief of staff"--in the 36-day battle over recounting the vote in Florida."

Reading on about this interesting man, we learn that "Zoellick was named U.S. Trade Representative at the beginning of the younger Bush's first term; he was a member of the Executive Office, with the rank of Ambassador. He also heavily promoted the Central American Free Trade Agreement over the objections of labor, environmental, and human rights groups."

And a bit more: "Zoellick played a key role in the U.S.-W.T.O. dispute against the European Union over genetically modified foods. The move sought to require that the European Union comply with international obligations to use science-based methods in continuing its moratorium on the approval of new genetically modified crops within the E.U."

The record, admittedly, is not 100%; not all World Bank presidents have had the opportunity to be an architect of a war, though various ones have had the chance to promote it. Nor is it really surprising that the Bank's leaders should have strong corporate ties; their vision of poverty is clearly more corporate than many would seem fitting. In the end, it all makes sense. According to the Bank's website, "Our mission is to fight poverty with passion and professionalism". What better people to fight than those who have led wars?

Sources: The World Bank website, Wikipedia

Debra Efroymson