April 17, 2007	Tuesday	Rabi-ul-Awwal 28, 1428

WASHINGTON: The planet’s poorest people risk being the real losers in a scandal that has engulfed World Bank president Paul Wolfowitz, who is clinging to office after a weekend of stormy meetings.

Campaigners said that Wolfowitz was irreparably damaged, propped up by an unpopular US administration, at war with his staff and held in deeper mistrust than ever by European powers.

“Basically he’s survived the weekend,” said Manish Bapna, director of the Bank Information Centre, an independent group which tracks World Bank affairs.

“But he’s about to embark on the IDA (International Development Association) replenishment process in such a vulnerable state that he will not be able to fulfil this most important task,” he said.

The IDA is the arm of the World Bank Group that offers grants and interest-free loans to the most impoverished nations, whose paltry spending budgets would face a black hole without its aid.

Over the weekend, officials from Britain, France, Germany, Italy and Spain all raised questions over the credibility of Wolfowitz after revelations that he personally ordered a massive pay deal for his bank employee girlfriend.

“An institution like the World Bank lives by its moral authority and its credibility,” German development minister Heidemarie Wieczorek-Zeul said.

“We question whether the World Bank can surmount these difficulties to obtain new funding,” she said.

All the World Bank members represented at the meetings, including the United States, issued a statement expressing “great concern” over the scandal but said they would await the findings of a board review into Wolfowitz’s conduct.

Pressed as to whether he would resign, Wolfowitz also said he would wait for the findings.

But he stressed his determination to continue the global lender’s work on improving the plight of the poorest nations, especially in Africa, which he said was on the verge of a “historic turning point” for the better.

“This is important work and I intend to continue it,” he told a news conference after heated speculation over whether the scandal involving his Libyan-born girlfriend, Shaha Riza, would bring him down.

Wolfowitz is overseeing a drive to replenish the IDA’s coffers, which have been seriously depleted by a programme of debt cancellation led by the United States, Europe and Japan.

In erasing billions in past debts owed to the World Bank and the International Monetary Fund, the world’s richest nations have deprived those institutions of regular income on debt and interest repayments.

So the IDA needs up to 25 billion dollars -- seven billion more than donors coughed up in the last review three years ago -- to sustain its promises of aid for key sectors like education and healthcare over 2008-2011.

After the IDA negotiations were launched in Paris last month, the next funding meeting is scheduled to take place in Mozambique in June. The process is meant to wrap up at the end of this year.

Just as he tries to drum up new funds, Wolfowitz has to overcome furious charges of double-standards as he campaigns against corruption in the World Bank’s lending.

Soren Ambrose, senior policy analyst at the campaign group 50 Years Is Enough, said it was now up to members of the Democratic-led Congress to weigh into the furore.

“Seems to me that concerned members of the US Congress, who are rarely shy about investigating mismanagement at the World Bank, should be encouraged to consider hearings into the institution’s personnel practices,” he said.

“And it would serve to underline the very real prospect that getting Congress to commit to funding IDA ... could be hopeless so long as Wolfowitz remains in the president’s chair.”—AFP