|Paul Wolfowitz, Shaha Riza
Washington, April 13:The political demands of elections in Uttar Pradesh over matters of state have robbed India of a unique opportunity to turn the tables on those in Washington who perpetrated one of the worst humiliations on New Delhi in the name of transparency and fighting corruption.
The eleventh-hour decision by finance minister P. Chidambaram to skip the spring meetings here this weekend of the World Bank and the International Monetary Fund (IMF) has effectively killed a chance for India to recapture the moral high ground in the two key international financial institutions which have treated India with scant respect since their new heads took over in 2005 and 2004 respectively.
Chidambaram, according to Reserve Bank and finance ministry officials who are in Washington to stand in for him, cancelled his visit after the Prime Minister directed all cabinet ministers not to travel abroad until the Uttar Pradesh elections are over.
Unlike usual World Bank and IMF meetings, the finance minister’s attendance at this weekend’s meetings would have been crucial as the bank copes with a severe credibility crisis caused by its president Paul Wolfowitz’s alleged nepotism in favouring his girlfriend and cronies with hefty salaries, promotions and
As finance ministers from across the globe gathered here for their half-yearly meeting, Wolfowitz was fighting for his survival as the head of the World Bank.
At the end of a marathon day-long session that stretched late into last night, the bank’s 24 executive directors issued a statement that Wolfowitz had facilitated his girlfriend’s promotion and salary increases without a review either by an ethics committee or the board’s chairman.
Dhanendra Kumar, an IAS officer from the Haryana cadre, is an executive director of the bank and represents India, Bangladesh, Bhutan and Sri Lanka.
The India angle to the scandal goes back to the months soon after US President George W. Bush sent his then deputy secretary for defence to the World Bank as it was unlikely that the Senate would have confirmed Wolfowitz, an architect of the botched invasion of Iraq, for any new job.
By convention, an American has held the job of World Bank president and the nomination does not have to be approved by the Senate.
Wolfowitz brought several of his aides from the Pentagon to the World Bank on tax-free salaries that are way above the bank’s norm, it has now been revealed, because they, too, may not have found any suitable jobs in the US administration because of the roles they played in the Iraq war.
He also decided — by some accounts, to whitewash his pathetic record in Iraq — to launch a campaign at the World Bank against corruption in the bank’s borrower countries.
Wolfowitz gave that job to one of his trusted aides, Suzanne Rich Folsom, counsellor to the president and director of the department of institutional integrity.
In her latter capacity, Folsom soon targeted India as a corrupt borrower of World Bank money.
She travelled to Delhi, accompanied by a galaxy of lawyers and armed with thousands of pages of documents, alleging corruption in World Bank loans to India’s health sector.
When Folsom’s assault team landed in North Block, Chidambaram snubbed them and said he would only meet her and not be subject to lectures and prescriptions by American lawyers.
Offended, she came back here and, in tactics that have become typical of the Bush administration, persuaded Wolfowitz to suspend nearly four-fifths of a billion-dollar loan which the World Bank was in the process of disbursing for India’s health care projects.
Meanwhile, Wolfowitz met a visiting Indian cabinet minister in his hotel room here and quietly passed on a message that all World Bank loans to India would be stopped unless Delhi gave in to the demands of his aides, according to sources privy to discussions at that meeting.
While fighting corruption was a laudable objective, the dominant view in the World Bank was that India was chosen to make an example and create an impact from Wolfowitz’s new crusade.
When the message reached Delhi that Wolfowitz would, indeed, twist India’s arm to the point where it could hurt, the finance ministry worked out a compromise with the bank.
Chidambaram’s presence here this weekend would have been an occasion for India to walk tall and signal to Wolfowitz that the boot of corruption is on his foot and that it snugly fits him.