The Evil World Bank

I recently received an award for outstanding contribution to eradicating Poverty in our country. A local news paper wanted to interview me for it. Although I was thankful for the recognition, however, I had to respectfully decline citing I didn’t do it for the fame. Further to my previous post (See: Modern Money Mechanics or Modern day Slavery), I decided to raise awareness of the Evil that is the World Bank.

Of all the elements of the Bretton Woods systems perhaps the most enduring has been the World Bank and its associated institutions. Although regarded in some circles, the bank has been a significant failure helping the residents of the poor in developing nations. Like many bureaucracies, the World Bank has constantly trying to reinvent itself and redefining its mission. Some critics have referred to this as mission creep. It is the reactions of self interested bureaucrats who are intent to saving their own jobs at all cost. The non-institutional elements of the Bretton Woods, such as the gold back dollar standard have gone by the way side but the World Bank and the IMF (International Monetary Fund) soldier on.

What's most annoying about the World Bank are the criticism alleging that the bank and its action demonstrate the negative side of free market capitalism. Nothing could be further from the truth. The World Bank is not an organization that is devoted to capitalism or to the free market but rather to the state run corporate capitalism. It is established and managed by a multitude of governments, the World Bank promotes managed trade which politically connected individuals and corporations enrich themselves at the expense of the poor and the middle class. Western Governments tax their citizen to fund the World Bank. Then they lend this money to corrupt third world dictators who abscond with the fund then demand repayment which is extracted through taxation from the poor third world citizens rather than the officials who are responsible for the embezzlement in the first place. This is in essence, a global transfer of wealth from the poor to the rich. Tax payers around the world are force to subsidize the lavish life styles of these third world dictators and highly paid World Bank bureaucrats who don’t have to pay income taxes.

The World Bank has outlived its intended purposes. Capital markets are flush with money and well develop enough to lend money not just to national governments but to local and regional government’s projects at competitive market rates.

When the appointments of Paul Wolfowitz as President of the World Bank was made, many criticized it. Nobel Laureate in Economics and former chief economist for the World Bank Joseph Stiglitz said: “The World Bank will once again become a hate figure. This could bring street protests and violence across the developing world.” In a speech at the U.N. Economic and Social Council, economist Jeffrey Sachs also opposed Wolfowitz said: "It's time for other candidates to come forward that have experience in development. This is a position on which hundreds of millions of people depend for their lives ... Lets have a proper leadership of professionalism."

The aftermaths of Mr. Wolfowitz departure, much was made of the question of his successor. However, the questioning should’ve been instead directed towards the phasing out of the organization.