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01/24/2006:

"Wolfowitz Under Fire at World Bank"

The term of a World Bank presidency is an all-too-brief five years and the early months are frequently marred by sniping from the career staff who are more permanent fixtures. Because the post is filled by the nominee of the US president, a new chief often knows little about the organisation and takes time to make a mark. Almost eight months after taking up the role, Paul Wolfowitz has yet to set a course for his presidency and staff disquiet is reaching deafening levels.


The immediate cause of the turmoil at the World Bank is the appointment of an adviser to Mr Wolfowitz with close ties to the Republican party as the new director of the internal watchdog that investigates suspected fraud and staff misconduct. His choice has raised questions about the selection of someone so close to the president and whether this was the best person for such a sensitive post. But the ensuing strife has revealed widespread unhappiness among senior bank staff and executive directors over Mr Wolfowitz's management style and performance.

Following his arrival, Mr Wolfowitz made clear his intention to streamline the bank's management structure. His predecessor had appointed five managing directors, four of whom had already left. There were more than 30 vice-presidents below managing director level, whose ranks he planned to thin out.

The fifth managing director left late last year, as did the highly regarded general counsel. Only now is Mr Wolfowitz close to appointing new managing directors, who are unlikely to be in place until the summer - a year after his arrival. Meanwhile power has gravitated to his immediate circle - mainly Republican stalwarts, prompting agitation among the career staff.

Nor has Mr Wolfowitz set a new intellectual agenda for his presidency. Instead, he has appeared more concerned about being seen to respond to criticisms on Capitol Hill over allegations of corruption - allegations that bank staff often see as witch-hunts against them for the sins of those in the countries where the bank operates.

Mr Wolfowitz can reasonably say that he wanted time to assess priorities for the organisation and that 2005 was a year of heavy commitments, such as the Group of Eight summit at Gleneagles. But as time has passed, authority has drained upwards from those beneath him in the hierarchy to his clique of advisers. Decision-making has slowed - made worse by his tendency to take a long time making up his mind.

When Mr Wolfowitz was appointed, the Financial Times urged him to give the bank greater focus and to overhaul its management. He cannot achieve this in an organisation with 10,000 staff operating in more than 100 countries by relying on a handful of trusted aides from his own country. Unless he moves quickly to appoint a team representative of the shareholders that is credible to the staff, his presidency risks ending in paralysis and disappointment.
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World Bank accuses West of undermining Karzai
Donor countries including Britain and the United States are engaged in often wasteful projects outside the control, and sometimes the knowledge, of the Afghan administration, says a report by the Bank's economists.

Its main recommendation, that aid should be channelled through government agencies, is due to be discussed at next week's London conference on Afghanistan. The summit, jointly chaired by Tony Blair, the UN secretary general Kofi Annan and President Karzai, will draw up a five-year plan for speeding up reconstruction and attempt to combat the rising tide of violence. It will be attended by the representatives of 70 countries.

The Afghan government will present its own blueprint for the future, the national development strategy, which will also call for greater control over international aid. The top UN envoy in Afghanistan, Jean Arnault, said in Kabul yesterday that the plan was the result of "detailed consultations between the Afghan government and the international community".

He added: "It contains some key provisions on the Afghan leadership, capacity building for people and institutions, fairness and transparency aimed at making sure that international assistance to Afghanistan is not only maintained but further improved." Total aid, running at around $3bn (£1.7bn), is 10 times the government's revenue of $300m. But three -quarters of the money from donors is channelled outside the government budget. Alastair McKechnie, the World Bank country director for Afghanistan, said: "Experience demonstrates that channelling aid through government is more cost-effective. For example a basic package of health services contracted outside government channels can be 50 per cent more expensive than the package contracted by the government on a competitive basis.

"Furthermore, the credibility of the government is increased as it demonstrates its ability to oversee services and become accountable for results to its people and newly-elected parliament." Afghanistan is experiencing one of the bloodiest periods since "liberation" by US and British forces, with an increase in suicide bombings and attacks by a resurgent Taliban in the provinces bordering Pakistan. Britain is sending around 3,000 extra troops to one of the most violent provinces, Helmand, and the Dutch parliament is due to debate the deployment of a force of 1,200.

The report says donors want the government to establish its authority, but they are disempowering it through their aid strategy. Even the Afghan army and police are paid their salaries outside the control of Kabul.