I have seen the World Bank teams visiting underdeveloped states in developing countries like India. The basic problem that they have always faced is in extracting data for the reports they are working on.
With the kind of economists that the World Bank has, it can prepare some accurate reports that are not only helpful to it as an organisation but also for the country the report is being prepared for.
It however needs some ground level staff that are deputed in these countries and who have first hand knowledge of the region. I believe the results would be much better when these "grass root" people work with these economists on the projects.

as a citizen and resident of a developing nation, a former colony of the United States, my perception is that the world bank's projects here are undermined by corruption to which the bank often ignores. all it cares it pushing its loans, never mind if its misspent or mishandled or misappropriated, because the country will not disown the loan anyway. in effect the WB has become a milking cow of corruption syndicates. in my hometown, a serviceable road in relatively good condition has been completely dug up--slowing down the traffic of people and agricultural goods for at least 6 months--all because a WB loan has been approved to build a new road.

the impression therefore is that the WB actually helps perpetuate our corrupt political elites and helps give employment to foreigners (Westerners)who come to the country as consultants and development specialists.

"For those of you who support Western control of the World Bank, who controls your mortgage or your credit card? Do you let the bank choose the house and the length of the loan? Do you let the Bank dictate how you use your credit line?"

This comment is impressively clueless.

Yes, indeed the bank DOES choose the house and the length of the loan. If you want to borrow $500,000 on a house the bank thinks is only worth $100,000, the bank will tell you to take your business elsewhere. While you may be offered some choice, you can't dictate the length of the loan or the interest rate either.

Now if you're a good credit risk, you can shop around and you may be able to get terms more to your liking. But the whole point of the World Bank and the IMF is that they will step in and lend to projects and countries that no commercial lender will touch. The IMF, in particular, is the lender of last resort. You only turn to the IMF when you have made such a complete hash of your economy that you have no other choice.

If you're trying to stave off commercial bankruptcy, you had better believe that lenders will attach all kinds of strings to any line of credit they give you. There is no reason for the IMF to treat near-bankrupt countries any differently.

The idea that the IMF and the World Bank need to re-establish their "credibility" is bizarre. The Bank and the Fund are not some kind of economic Pope trying to provide leadership by moral suasion. They're lending institutions. If you don't want their money, don't deal with them. Perdiod. If countries can get better terms elsewhere, then they should do so. I can promise you that nothing would make the backers of the Bank and the Fund happier than having the world economy advance to the point where the Fund and the Bank were irrelevant.

For those of you who support Western control of the World Bank, who controls your mortgage or your credit card? Do you let the bank choose the house and the length of the loan? Do you let the Bank dictate how you use your credit line? Would you take such arrogance from the biggest debtor on the planet?

The whole notion that corruption doesn't happen in the West is propaganda. Review recent events in the US and the UK and it becomes clear that corruption is a serious problem. The nature of that corruption may be superficially different but that is more a product of the differing opportunities for corruption in Western countries. If third world countries had back dated stock options and the ability to make billions by invading foreign countries, don't you think they'd do that rather than raid the piggy bank?

The article does not mention the colossal policy failures of the World Bank in Argentina and elsewhere but reality shows that World Bank policies damage as often as improve the lives of citizens in debtor nations. What it does consistently is open those countries to Western ownership of traditional state businesses (natural resources, public utilities, etc.). How does creating an environment where profits from local resources can be sucked into foreign bank accounts help the people living in that country? Certainly it makes it more attractive for Westerners to invest money there but only because they can extract the profits without dealing with any of the "external" costs of operating within that country (policing a poor and aggrieved populace, cleaning up pollution, dealing with health problems related to pollution, etc.).

As it is, the portfolio of the World Bank is shrinking dramatically because the third world has lost confidence in the World Bank as an institution capable of doing good. If the West doesn't want the lever to disappear entirely, they would do well to address the concerns of their "customers".

It will be a tremendous boost to the World Bank credibility if the president will be from a third world country.

Very good article.

I'm disappointed by Mr. Gumede's shallow and counter-productive article. (African Confidential is usually so good!) I am impressed, on the other hand, by the quality responses posted by other readers.

I won't repeat what the others said, but will add that Mr. Gumede's line of thinking is contributing to the problems that ravage many (not all) countries in sub-Saharan Africa. The citizens who are not benefiting from the wealth in these countries (yes, they are wealthy, some of them obscenely so) do not want pity or self-flagellation from outside observers. What they ask is that we speak truth, not platitudes, about what is taking place. Their voices are out there, trying to be heard above the misleading clamor raised by (perhaps well-meaning) people like Gumede, Sachs, and Geldof. Look for them and spread their words. Some easy examples: Shanda Tonme (Cameroon), George Ayittey (Ghana, currently in the US), Aidan Hartley (Kenya via UK).

If Wolfwitz's actions are shown to be as bad as it seems, he should go and prosecution should not be out of the question if any laws were broken. Those who would use this isolated case to obscure the real, murderous problems of governance in Africa are friends to none but the dictators and their lackeys who benefit from the status quo.

Quote from lincoln, nebraska: "Wolfowitz is a hawk. He's running it for our military/economic advantage." Please give me a break - all the guy has in mind is himself...if he really believed in all that he would have stayed at Pentagon. besides, i dont respect him because he doenst have the b.... to make money like rummie did - he goes and negotiate his contract few thousands dollars higher - give me a break...he is an empire builder? no wonder the empire is crumbling!

I couldnt agree more with the blog - yes, move it to a Third World Country like Egypt or something closer to people is supposed to help. here we got these bureacrats in DC shuffling paper...if the bank was located in cairo or somewhere in africa will get rid of these freeloaders as well....they dont like to go to africa!

I find this article particularly reprehensible. The idea that for the IMF and WB to retain credibility requires relocation to a developing nation with citizens from those countries at its head is more than ignorant, it is blatantly insulting. For this statement to be serious, it must be taken that not only can a third-world president in a third-world country do just as good a job, they can do better and this would be the only way to restore credibility to the institutions.

This is extremely naive, at the very least. For these institutions to operate effectively, the last concern should be where the bank IS and where its president is FROM. In fact, if it did, third-world countries would be much better at distributing their oil wealth. Of course, this pans out not even in the slightest.

What SHOULD be a concern is not even if the new president is a good economist. Economic decisions are made on the ground level and slightly above. What we need to realize the world over is that banking is not what the presidents of the IMF and WB do, it should be to administrate those institutions.

So what is really needed is an administrator of excellent credibility to weed out corruption, understand the intactness of those to whom they lend, and to generally eliminate the beaurocratic redundancies typical of such large institutions. It shouldn't matter where the bank is or where he is from. It only matters that he is competant.

That may mean disregarding President Bush's next suggestion for president.... thankfully.

If the Third World wants to fund the World Bank and the IMF, then by all means let them pick the heads. If not, then like every other organization, the owners, or those that put up the funds, get to pick the leaders. Bank costumers don't pick Bank CEO's and thus the Third World can take the money from those evil rich countries or not.

I agree with the majority of commentators who suggest that those who contribute most to fund loans should have the most to say about how the money is assigned. Sorry, I know that's patronizing, imperialistic, and not culturally sensitive. But, as the "George Washington" poster said above, until developing countries are able to demonstrate the capacity to manage funds responsibly (in particular, to make certain that funds are not siphoned off by corrupt political leaders - and I mean all the way down to the ground level, not just at the highest offices), it would seem silly to shift management duties directly onto unproven frameworks. Sure, the US and other Western nations have issues as well, but does Wolfowitz's girlfriend's salary controversy really rise to the level of the atrocious behavior of, let's say, Robert Mugabe? The problems in the developing world are very real, very immediate, and very much more significant than the political crisis du jour in D.C. Let's not confuse them.

Mr. Gumede exemplifies many of the attitudes and misconceptions that cripple so many developing countries.

First, no one is forced to accept help from the IMF or the World Bank. For examples, countries voluntarily turn to the IMF for help only after power-diving their economies into the ground, typically after a lengthy period of colossal mismanagement and outright looting. While the IMF may impose terms that require radical fiscal restructuring in exchange for its aid, any country is always free to decline those terms. Of course, it won't get the aid if it does.

Mr. Gumede, however, imagines that developing countries have some sort of "right" to assistance from the IMF and the World Bank. They most certainly do not. It is absurd to suggest that "The hold of Western nations, in particular the U.S., must be broken if the Bank and the Fund are to become more credible." On the contrary, these institutions are run by the economically successful for the benefit of the economically unsuccessful. The IMF, in particular, is run for the benefit of economic basket cases. To suggest that it should be run BY economic basket cases is beyond ridiculous.

In the interest of "good governance," Mr. Gumede believes that the inmates should run the asylum. But good fiscal governance is good fiscal governance. The idea that basic economics must bend to each countries "special needs" is what got many of these countries into trouble in the first place

No doubt Zimbabwe will be the next country to be subject to a draconian IMF recovery plan. But only a fool would blame the IMF for the pain that will inevitably come with fixing Mugabe's mess. No special African perspective is needed to straighten out Zimbabwe. On the contrary, it is a special African perspective -- manifesting in Africa's shameful refusal to stop Mugabe's wanton destruction -- that created this mess.

The world bank should be shut down. It was a noble idea that has failed. Now it is nothing more than a conduit for graft.

I couldnt agree with the author more. What is even a grander irony is the fact that we have a money making institution that was founded as a type of charity organization. I understand that many will disagree immediately and argue that it is not a charity, but rather a lending institution, and I agree with that premise, however, when it was founded it was founded to help those that it lends to and not itself. What we have seen over the years, however, through irresponsible lending has been disastrous for many developing economies. Those that have been successes and indeed there are many, however seem to bve the exception to the rule. The author's call for a leader from a third world nation would return at least some of the responsibility to the institution to look after its lenders and not just itself. However, we can never be so sure and surely can not assume that such a replacement would be a sure remedy, we must always fear the wolves dressed in sheeps clothing mor ethan the wolves themselves.

Gumede's concept, that the inmates should run the asylum, is predictable. Especially in light of the high ethical standards that are prevalent in the 3rd world. Why SHOULD the main cash contributors be in charge?! "World Bank" indeed: try Bottomless Pit.

The Bank should be controlled by those that provide the funds. The third world countries will never get out of the muck until they find their George Washington and get rid of their corrupt flunkies. It takes a tough individual to clean up a complacent mis-directed organization. The current administration is on the right track. If critics want to send the World Bank to the third world, ok but leave the money at home.

There have been much written about the WB and IMF that are well-researched but Mr. Gumede's is not one of them. Having worked at the WB, I would agree with anyone who describes the organization as dysfunctional, political and bureaucratic. Research and plans are not conducted by twenty-something year-old Westerners but Ph.D.'s, over-the-hill academics and former public servants, many of whom are from developing countries. In fact there's some sort of quota system in place (formally or informally). The pervasive know-it-all attitude and bureaucratic culture of both institutions are what keep their policies from being effective. The culture and internal working of the institutions are entirely separate issues from lending policies. The developed nations are DONORS, using my hard earned US tax dollars, to fund developing nations who wish to borrow. Much has been written about the abject corruption that exists in borrowers, which is the key reason why there's been no advancement in most of these countries.

The suggestion is preposterous. What he is saying is that the US, Europe, and Japanese taxpayers put in the money, and somebody in Africa will control and dole it out. No sir. My tax money goes in and the US share is the maximum, I want my government reps to have control.
I have a better suggestion. If African nations want to control a bank let them start their own. Nigeria, Angola, and Guinea Bissau, and others are oil rich and can afford to contribute. So can South Africa. Let them dole it out to poorer African countries.

I think the writer brings up some real real good points. The 20-something comment was a total botch though. Was a great article, i don't understand why cheap trash had to be tossed in. Inexperienced, not speak the language, etc all are fine. 20-something was stupid.

To totally skip the point of who is supplying the money is kind of silly.

To have a real humanitarian run it would be nice. Wolfowitz is a hawk. He's running it for our military/economic advantage. Get a mother theresa kind of person in there, not this empire building invader.

I for one would root for Ernesto Zedillo, the former president of Mexico and widely recognized as a world-class economist.

HEY Jacob JOZEVZ, are you doing drugs or something?, if you want to pretend to be an smart ass I don't think is working very well. Why don't lose the sarcasm and tell us what's really in your mind?

O Banco Mundial ( Fundo Monetário Internacional, BIR e BID ) não proporcionaram aos países mais pobres e nos últimos vinte (20) anos nenhum financiamento ou ajuda a fundo perdido, que pudesse justificar a sua participação efetiva na redução do índice de pobreza ou na melhoria das condições economicas e sociais. Basta ver relatórios e estatísticas e constatar, sem dificuldades. que quando havia liberação de recursos, os financiamentos eram priorizados para o pagamentos de juros e principais de capitais especulativos. É muito importante que um jornal do porte e respeitabilidade do Washington Post, faça uma varredura de como foram feitos os financiamentos do FMI para países da África e da América do Sul nos ultimos vinte (20) anos e em que realmente foram aplicados e quais as taxas de juros anuais, prazos de carências e penalidades impostas por falta de cumprimento de reciprocidades. Verificar também o volume de recursos liberados para esses países a fundo perdido, pelo FMI, Banco Mundial, Bird e Bid. Aí saberemos, sem plástica se a política do Banco Mundial deve ou não deve mudar, para coumprir a sua verdadeira finalidade. Será um verdadeiro raio X para o conhecimento da comunidade irternacional. Deve mostrar também, em detalhes, os seus gastos e as suas receitas. Fica aquí a idéia que poderá gerar um importante debate entre todas as nações que de uma maneira ou outra participam do Banco Mundial e FMI.

Francis Fukuyama can be the continuity for prudent polices for the WB if Paul Wolfowitz is to step down. Now World Bank has got a clear vision for bring Africa back in to the world map that had been neglected by all the development agency and developed countries for decades where large part of the world’s extreme poverty and underdevelopment exist solely due to corruption. Development effort has never been a success story taking into an account structural adjustment to poverty reduction strategy. One can only see the light at the end of the tunnel regarding development effort or poverty reduction through Anti Corruption Strategy and thanks to visionary development architect Professor Paul Wolfowitz. Those who fail to support this is merely aiding corruption, development, depriving people in Africa and other parts underdeveloped nations out of poverty and waste of global tax payers dollars. Professor Fukuyama is another far sighted person after Paul Wolfowitz and the statements by the African finance ministers is a clear indication supporting the continuity of the development policies adopted.

And for the Europeans it is another opportunity to a put dent to the transatlantic relations and their goal is to move on a bilateral basis rather than multilateral basis to enhance their geopolitical positioning rather addressing poverty and development effort. When it comes to development issues Europe should not meddle in micro politics to bag the two key positions at the IMF and WB.

It is extremely important to keep in mind today’s geopolitics and the lesson learnt what impact poverty and failed or failing state will have on the developed nation’s back door. If Paul Wolfowitz is to leave WB, Francis Fukuyama can be and should be the White House's choice.

Francis Fukuyama can be the continuity for prudent polices for the WB if Paul Wolfowitz is to step down. Now World Bank has got a clear vision for bring Africa back in to the world map that had been neglected by all the development agency and countries decades where large part of the world’s extreme poverty and underdevelopment exist solely due to corruption. Development effort has never been a success story taking into an account structural adjustment to poverty reduction strategy. One can only see the light at the end of the tunnel regarding development effort or poverty reduction through Anti Corruption Strategy and thanks to visionary development architect Professor Paul Wolfowitz. Those who fail to support this is merely aiding corruption, development, depriving people in Africa and other parts underdeveloped nations out of poverty and waste of global tax payers dollars. Professor Fukuyama is another far sighted person after Paul Wolfowitz and the statements by the African finance ministers is a clear indication supporting the continuity of the development policies adopted.

And for the Europeans it is another opportunity to a put dent to the transatlantic relations and their goal is to move on a bilateral basis rather than multilateral basis to enhance their geopolitical positioning rather addressing poverty and development effort. When it comes to development issues Europe should not meddle in micro politics to bag the two key positions at the IMF and WB.

It is extremely important to keep in mind today’s geopolitics and the lesson learnt what impact poverty and failed or failing state will have on the developed nation’s back door. If Paul Wolfowitz is to leave WB, Francis Fukuyama can be and should be the White House's choice.

I don't doubt the writer's sincerity and good intentions, but this piece needs to be grounded a little more in fact and reality.

Moving the Bank and IMF headquarters sounds nice, but it will cost a fortune and accomplish little.

"Currently, twenty-somethings from Western nations often fresh out of college write the economic plans for developing countries they have often never set foot in." That statement is absolutely and unequivocably wrong and shows ignorance of the Bank's inner workings.

This approach distracts from the real issues about the Bank that need to be brought to light.

As the time to replace President Paul Wolfowitz looms ever closer, we should all be questioning the role of the World Bank and the IMF in global development. The days of the Bank serving in an in loco parentis role are now over, thanks to the failure of Wolfowitz to distinguish between institutional and personal ethics and transparency. These institutions were originally located in the U.S. for stability and the appearance of integrity. It may well be time for them to be moved to a 3rd world nation for the same reason. Certainly the appointment of a President from a 3rd world nation would go a long way toward setting a new course and a new institutional tone.