Paul Wolfowitz, 10th World Bank President

20 November 2006 by Eric Toussaint


President George W. Bush’s decision to have Paul Wolfowitz (former Defense under-secretary and one of the main architects of the invasions of Afghanistan in 2001 and of Iraq in 2003) appointed World Bank World Bank
WB
The World Bank was founded as part of the new international monetary system set up at Bretton Woods in 1944. Its capital is provided by member states’ contributions and loans on the international money markets. It financed public and private projects in Third World and East European countries.

It consists of several closely associated institutions, among which :

1. The International Bank for Reconstruction and Development (IBRD, 189 members in 2017), which provides loans in productive sectors such as farming or energy ;

2. The International Development Association (IDA, 159 members in 1997), which provides less advanced countries with long-term loans (35-40 years) at very low interest (1%) ;

3. The International Finance Corporation (IFC), which provides both loan and equity finance for business ventures in developing countries.

As Third World Debt gets worse, the World Bank (along with the IMF) tends to adopt a macro-economic perspective. For instance, it enforces adjustment policies that are intended to balance heavily indebted countries’ payments. The World Bank advises those countries that have to undergo the IMF’s therapy on such matters as how to reduce budget deficits, round up savings, enduce foreign investors to settle within their borders, or free prices and exchange rates.

President was a source of controversy in March 2005. Before this decision some media, such as the British Financial Times, had campaigned for the 10th WB President to be selected on the basis of his or her competence in terms of development, preferably among citizens of the South. The Financial Times supported Ernesto Zedillo who had been President of Mexico at the end of the 1990s. George W. Bush’s decisive choice in favour of Paul Wolfowitz clearly indicates who actually runs the World Bank. All 24 governors subscribed to this decision.

But who is Paul Wolfowitz? A pure product of the US state apparatus. He combines a short university career with a long-standing experience of power. A graduate in mathematics, he worked at the Bureau of the Budget (1966-1967) when he was only 23. In 1969 he worked for a Congress committee that aimed at convincing the Senate that it was imperative to endow the US with an anti-missile umbrella against the USSR. He succeeded. From that point onward Paul Wolfowitz was fully involved in issues of military strategy. A leading thread can be detected in his strategic approach: adversaries (the USSR, China, Iraq, etc.) have to be exposed as more dangerous than they would appear, so as to justify an additional defence effort (a bigger budget, manufacture of new weapons, wider deployment of troops) including the launch of preventive strikes or wars intended to prevent potential threats rather than respond to actual attacks.

He taught at Yale for two years and received a doctorate in political science at the University of Chicago in 1972, i.e. in one of the intellectual centres of reactionary conservatism [1]. Afterwards he worked for four years with the Arms Control and Disarmament Agency (1973-1977) in direct relation with Bush Sr who at the time was head of the CIA. Then he went straight into the Pentagon in 1977 and stayed there under Democrat president Jimmy Carter until 1980. He produced a file to show that the Soviets were developing new nuclear weapons. It later turned out that these allegedly new weapons in the Soviets’ hands were largely imaginary. Although he had worked for a Democratic president, after one year in limbo as a professor at the John Hopkins University, he managed to join the Reagan administration in 1981. He became Director of Policy Planning for the Department of State. From 1983 to 1986 he was Assistant Secretary of State for East Asian and Pacific Affairs. From 1986 to 1989 he was the US ambassador to Indonesia. From 1989 to 1993 he advised the Secretary of State for Defense, Dick Cheney, in the Bush Sr administration (1st Gulf war) and after Clinton’s two terms of office he became Under-secretary of State for Defense, running the wars against Afghanistan and Iraq along with Donald Rumsfeld. While William Clinton was president, i.e. from 1993 to 2001, he resumed his university career as dean of the Paul Nitze School of Advanced International Studies (750 students), which is part of the John Hopkins University. He worked miracles in collecting up to USD 75 million to finance the Paul Nitze School and did consulting work for one of the world’s leading military corporations, Northrop Grumman. In 1997 he founded a neocon pressure group called PNAC (Project for a New American Century). Other members are Donald Rumsfeld (Defense Secretary until November 2006), Dick Cheney (then CEO of Halliburton and currently US vice-president), Jeb Bush (George W. Bush’s brother), Richard Perle, and Robert Kagan. From 1998 onward, the PNAC campaigned for Clinton to launch a pre-emptive attack against Iraq and other potentially aggressive countries.

During the 1983-1989 period when Paul Wolfowitz was involved in US policy in East Asia, he actively supported dictatorships. Indeed, contrary to the image he likes to cultivate, he supported the military dictatorships of Ferdinand Marcos in the Philippines, Chun Doo Hwan in South Korea, and Suharto in Indonesia.

In the early 1980s he tried to save Ferdinand Marcos’ position by persuading him to implement some democratic reforms. At the time in the Philippines a powerful revolutionary guerrilla warfare allied with a middle class that was strongly opposed to the dictatorship under the leadership of Aquino was close to bringing about another US defeat similar to what had happened in Nicaragua in 1979 when the Sandinistas had passed an alliance with the middle class opposition led by Violetta Chamorro. It was not Paul Wolfowitz who chased Ferdinand Marcos from power in 1986 but the people’s concerted action, with the US securing the dictator’s flight to Hawai (50th state of the United States of America) [2].

As to South Korea, Paul Wolfowitz claims that he persuaded dictator Chun Doo Hwan (who had ordered massacres during the 1980 uprising) to withdraw in 1987. Actually the dictator’s demise was the result of millions of students, workers and citizens demonstrating against him.

In Indonesia where actions against the dictatorship were less developed (with good reason too: when he seized power in 1965, Suharto had half a million civilians massacred), the USA supported the dictator as late as early 1998. Paul Wolfowitz, who, as will be remembered, had been the US ambassador in Djakarta from 1986 to 1989, stated before a Congress meeting in May 1997 that “ any balanced judgment of the situation in Indonesia today, including the very important and sensitive issue of human rights, needs to take account of the significant progress that Indonesia has already made and needs to acknowledge that much of this progress has to be credited to the strong and remarkable leadership of President Suharto .” [3]

Paul Wolfowitz’ recent past is better known: he is one of the architects of the pre-emptive strategy developed in Afghanistan and Iraq from October 2001. He was one of the main originators of the lies disseminated through the media about the threat Saddam Hussein represented for the international community. He thought up the MDW theory and Saddam Hussein’s alleged support to Al Qaida and international terrorism. In the early days of the war he had claimed that US soldiers would always be seen as the liberators of Iraq and therefore cherished by the Iraqi people. He also asserted that Iraq would pay for its liberation itself thanks to its oil. Donald Rumsfeld, Paul Wolfowitz, George W. Bush and Dick Cheney have used the occupation and so-called “reconstruction” of Iraq for the greater profit Profit The positive gain yielded from a company’s activity. Net profit is profit after tax. Distributable profit is the part of the net profit which can be distributed to the shareholders. of US-based transnational corporations. There is thus a very real danger of seeing Wolfowitz do the same with “linked” aid from the World Bank.

Washington’s offensive against multilateral organizations

The appointment of Paul Wolfowitz needs to be seen against the US offensive on several multilateral institutions.

Act One: On 18 January 2005 Kofi Annan, General Secretary of the United Nations Organization (UN), decided to appoint Ann Veneman, Secretary of Agriculture in the Bush administration, as executive director of UNICEF. It happens that the USA and Somalia are the only two countries that did not ratify the UN Convention on the Rights of Children (ratified by 189 countries). We can easily imagine the kind of pressure Kofi Annan was under to make such a decision.

Act Two: On 7 March 2005 George W. Bush chose John Bolton as US ambassador to the UN. This ultraconservative figure feels a deep-seated hatred towards the UN, as testified by his often quoted statement that if the 38-storey UN building “lost 10 storeys today, it wouldn’t make a bit of difference. ” He tried to have Mohamed El Baradei (in charge of the UN mission that was to keep track of Iraq’s disarmament programme shortly before the 2003 war) sacked. He also managed to see that the US did not ratify the existence of the international criminal court and withdrew from the UN conference on racism convened in Durban in August 2001. The UN in his opinion should never stand in the way of US foreign policy. He has even stated that the UN can only function if it is managed by the United States.

Act Three: On 10 March 2005 George W. Bush announced that Paul Wolfowitz was his candidate as World Bank president. On 31 March the WB board of governors unanimously voted for Paul Wolfowitz as the Bank’s new president. George W. Bush thus showed the international community and his supporters that he will and can increase US direct leadership on multilateral institutions.

The appointment of Paul Wolfowitz is in a way similar to that of Robert McNamara in 1968. Robert McNamara had been Defense Secretary and was withdrawn from this post when the Vietnam war turned into a disaster. Paul Wolfowitz had to leave his post when it appeared that the war in Iraq was a failure. Like Robert McNamara, Paul Wolfowitz knows how to manage a large administration: the Pentagon. Like Robert McNamara, Paul Wolfowitz was an advisor to the US President on foreign policy issues. In all likelihood Paul Wolfowitz, like Robert McNamara and in the wake of James Wolfensohn, will maintain the alibi of the fight against poverty. Like Robert McNamara, Paul Wolfowitz will know how to use both the stick and the carrot.




Copyright Eric Toussaint 2006

Translated by Christine Pagnoulle with the collaboration of Judith Harris

Footnotes

[1Milton Friedman, one of the star professors at the University of Chicago, and the Chicago boys were to influence dictator Augusto Pinochet’s economic policy after the coup of September 1973. See Eric Toussaint. 2005. Your Money or Your Life. Chapter 14, Neoliberal Ideology and Polics: Historical perspective. P. 263, 264, 268.

[2See Walden Bello, US Sponsored Low Intensity Conflict in the Philippines, San Francisco, Institute for Food and Development Policy, 1987

[3Tim Shorrock, Paul Wolfowitz, Reagan’s Man in Indonesia, Is Back at the Pentagon, in Foreign Policy in Focus, February 2001, p. 3

Eric Toussaint

is a historian and political scientist who completed his Ph.D. at the universities of Paris VIII and Liège, is the spokesperson of the CADTM International, and sits on the Scientific Council of ATTAC France.
He is the author of Debt System (Haymarket books, Chicago, 2019), Bankocracy (2015); The Life and Crimes of an Exemplary Man (2014); Glance in the Rear View Mirror. Neoliberal Ideology From its Origins to the Present, Haymarket books, Chicago, 2012 (see here), etc.
See his bibliography: https://en.wikipedia.org/wiki/%C3%89ric_Toussaint
He co-authored World debt figures 2015 with Pierre Gottiniaux, Daniel Munevar and Antonio Sanabria (2015); and with Damien Millet Debt, the IMF, and the World Bank: Sixty Questions, Sixty Answers, Monthly Review Books, New York, 2010. He was the scientific coordinator of the Greek Truth Commission on Public Debt from April 2015 to November 2015.

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