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dam-l WBank on corrupton in Lesotho/LS
This is from Business Day, in SA. Still no reference by Wolfensohn on
whether corrupt companies will be debarred for future Bank contracts.
13 October 1999
Wolfensohn has stern warning for borrowers
Jonathan Katzenellenbogen
WORLD Bank president James Wolfensohn left SA last night with harsh words to
borrower countries on corruption.
Wolfensohn said the bank was offering Lesotho help to investigate the
alleged bribery of officials by engineering companies seeking Highlands
Water Project contracts. His offer was in response to the claim by the
Lesotho government that it was facing funding problems in pursuing its
investigations into the bribery scandal.
The bank recently put funding to Zimbabwe on hold while an investigation
into corruption took place. World Bank loans to seven other countries are on
hold due to allegations of corruption.
In meetings yesterday with President Thabo Mbeki, Finance Minister Trevor
Manuel and Reserve Bank governor Tito Mboweni, Wolfensohn made offers of
World Bank technical assistance and loans.
He urged SA to consider bank funding as it was cheaper than taking offshore
bond issues in the euro market.
Since coming to power in 1994 the ANC-led government has not taken out any
loans from the bank. The institution describes its relationship with SA as a
knowledge partnership. In this role it largely offers policy advice to
national and local government authorities, based on the experience in
countries in which it operates. In the absence of lending to SA, it has been
difficult for it to assume a high profile and influential role.
The bank recently said it would support a plan to revitalise Johannesburg.
On this trip, Wolfensohn offered support for an HIV/AIDS project. However,
government must still come up with a project that can be funded and
demonstrate adequate commitment in the fight against HIV/AIDS.
In discussions with ministers, Wolfensohn said the bank increasingly
listened to borrower governments and did not unilaterally impose conditions.
This was to help remove a popular perception that major decisions on
economic policies are forced on governments.
The bank is advising African countries in what is expected to be a major
policy statement and a plan for regional integration in the next century.
Mbeki is one of the leading figures in the formulation of this plan, which
is expected to be released early next year.
Wolfensohn is increasingly taking on the role of a development and
anti-corruption advocate. This goes beyond the traditional World Bank role
and is based on what it calls a "comprehensive development framework" which
takes into account issues of corruption, crime, governance and the political
position of the poor.
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Lori Pottinger, Director, Southern Africa Program,
and Editor, World Rivers Review
International Rivers Network
1847 Berkeley Way, Berkeley, California 94703, USA
Tel. (510) 848 1155 Fax (510) 848 1008
http://www.irn.org
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