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IPFS News Link • Central Banks/Banking

Raiding the World Bank: Exposing a Fondness for Dictators

• http://www.ronpaulinstitute.org, by james bovard

When I lived in Boston in the late 1970s, I paid $25 to attend a series of lectures by Galbraith on foreign aid and other topics. The louder Galbraith praised foreign aid, the warier I became. His hokum spurred my reading and led me to recognize that foreign aid is one of the worst afflictions that poor nations suffer. As one critic quipped, foreign aid is money from governments, to governments, for governments.

After I moved to Washington, foreign aid became one of my favorite targets as an investigative journalist. When I talked to the chief of the US Agency for International Development (AID), Peter McPherson, in 1985, my blunt questions had him literally screaming at me within four minutes of the start of the interview. McPherson probably screamed even louder when he saw the article I wrote thrashing AID.

Foreign aid was revered by the Washington establishment, and the World Bank epitomized the arrogance of the financial masters of the universe (at least in their own minds and press releases). The World Bank, heavily subsidized by US taxpayers, profited from every debacle it spawned. The more loans the bank made, the more prestige and influence it acquired. After a profusion of bad loans to Third World governments helped ignite a debt crisis, I warned in a 1985 Wall Street Journal piece that expanding the World Bank's role "would be akin to appointing Mrs. O'Leary's cow as chief of the Chicago Fire Department."

I was astounded at how many despots the World Bank was propping up. Bankrolling tyrants was the equivalent of a Fugitive Slave Act for an entire nation, preventing a mass escape of political victims. Yet almost all the details of World Bank loans were suppressed, allowing its perfidious officials to pirouette as saviors. In 1987, I rattled the bank's roof with a Wall Street Journal article headlined "World Bank Confidentially Damns Itself." That article was based on a stash of confidential bank documents that I had finagled. 


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