Lips moving at World Bank

The World Bank considers thinking about talking about thinking about doing something in regards forced evictions.

A senior World Bank official held talks with the Cambodian government over the forced eviction of people from their homes and said the development bank would continue to work with it on land reform to tackle the problem. …

The World Bank joined with other aid donors in July to ask the government to halt forced evictions and the problem was raised again by its vice-president for East Asia and the Pacific Region, James Adams, during a visit last week.

“A major focus of the visit was Cambodia’s urban land sector and the increasing numbers of disputes and evictions of poor people in urban settlements,” the bank said in a statement.
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“The discussions on land reform were constructive and it was agreed to continue these discussions over the coming week to agree next steps,” it said.

No hurry. There’s plenty of time.

World Bank grandstanding

The blogger at Demagogue recently highlighted a particularly apropos paragraph from a recent World Bank proposal.

Governments rarely reform spontaneously or expose themselves voluntarily to public scrutiny. Stimulating demand from citizens for greater accountability and better quality of services therefore becomes an important tool for improving governance.

Since the World Bank obviously understands the notion, it would be nice if every now and then they could find the cojones to put their money where their mouth is.

Appealing to the corrupt

After years of trying and failing to root out corruption within its projects, the World Bank has recently offered a chance for crooked companies to come clean without risking the loss of their lucrative World Bank contracts.

Firms which have defrauded the World Bank in the past will not be penalised if they admit their wrongdoing, the bank says.

It is offering an amnesty to firms, NGOs and individuals if they fully disclose past malpractice and promise to stick with the rules in future.

As unbelievable as it sounds, it really does appear that the Bank has zero understanding of the myriad ways it gets ripped off, and the amnesty is a last-ditch attempt to get a clue.

And what happens if confessions reveal corrupt World Bank employees? They pretty much get an amnesty too.

Politics at the World Bank

The scandal involving charges of corruption in World Bank-funded development projects has been a debacle from the very beginning. Responsibility for that falls squarely on the World Bank, which seems to have deliberately mishandled the process every step of the way.

Now comes the admission that the allegations may be suspect. World Bank Executive Director Joong-Kyung Choi met with Prime Minister Hun Sen on Wednesday. According to The Cambodia Daily, Hun Sen’s spokesman had this to say about the meeting.

“Mr Joong-Kyung Choi told Samdech Prime Minister [that] what had happened previously between Cambodia and the World Bank made both sides suffer,” Eang Sophallet said. “And Mr Joong’s personal point of view was he thought that [World Bank Department of Institutional Integrity] investigation could not be regarded as 100-percent true. And he does not clearly know how much that the report reflected the truth,” he said.

The odds that the World Bank has fabricated the charges seems extremely small. After all, this is Cambodia. That the World Bank would act as arrogant and politically inflammatory as possible while playing fast and loose with the facts, however, sounds entirely credible. And that’s what Mr Joong seems to be saying.

Robbing the bank

The Cambodia Daily reports in its weekend edition that the World Bank has, in fact, given the government fairly detailed evidence of the Bank's allegations of corruption.

Although the government claims the World Bank has not given enough evidence to support its allegations of corruption in seven bank-funded projects, documents obtained on Thursday show that the bank has named some companies and detailed the corrupt schemes that allegedly occurred.

Of course it did. But it did not do so straight away, and there's something unusual about that. The Bank spent a year researching the projects, yet it went public with the allegations, apparently, before it was prepared to show its evidence to the government.

A simple act of arrogance, or a calculated slap?

At the time it looked like both. Unsurprisingly, the government reacted with righteous indignation and accused the Bank of pandering to the media. Then came calls of flimsy evidence and impure motives.

The Bank has yet to disclosed how much money it expects refunded, but the figure is insignificant. Either the government gets in line, or it doesn't. The government can stay on the gravy train by repaying the World Bank what it asks and in the future devise new and better ways to hide the sugar. Or it can walk away.

There are rumours that Hun Sen is contemplating default, which may not be as crazy as it sounds. World Bank policies are notorious for sacrificing long-term growth for short-term stability. The country could do worse than try and stand up on its own.

The question then becomes, could the World Bank quit Cambodia. If Hun Sen calls the Bank to account, it may have to. That would be virtually unprecedented, and it’s not at all clear how the Bank or the larger donor community would react. Few, if any, would have given the possibility much thought.

For the likelihood of Hun Sen forgoing easy World Bank funds is practically nil. The smart money is always with the sugar.

Can he get a witness

As reported by AP yesterday, Prime Minister Hun Sen again demanded evidence of corruption from the World Bank. Without evidence, the prime minister said, the government could not pay the World Bank back.

The World Bank has said previously that it has given all the evidence it plans on giving.

But more intriguing was this:

Hun Sen prodded the bank to reveal its sources.

"What are they afraid of? If anonymous information can be taken as credible, where is justice in the world?" Hun Sen said.

Today's lead story in The Cambodia Daily makes it a bit clearer:

If the Bank does not disclose the names of the witnesses, it will be hard to forsee how the government can repay the money that the Bank has requested, [Hun Sen] said.

Hun Sen is now asking the World Bank to name its sources, too.

On the surface, of course, this is all just political kabuki. By making impossible demands, Hun Sen not only plays up to his reputation as the strongman, but postpones the day of reckoning.

But there's a little more to it.

By asking the Bank to name names — publicly, on television — the prime minister sends a message to others who might think about helping World Bank investigators.

Remember, the World Bank is currently investigating at least four other projects, possibly more. Those investigations are certain to reveal more misallocations of World Bank money. Not only does that means more millions for the government to pay back, but even worse, it almost certainly means more suspensions of World Bank projects.

Remember too that the World Bank is under new management, and should the new lords come to the realization that the Bank's policy in Cambodia is fatally flawed, that could have catastophic effects on the choo-choo.

Hard times for the World Bank

The month of June has not been kind to the World Bank. First the corruption scandal, and now this:

A leaked (World Bank) Inspection Panel investigation heavily criticises a forestry management project in Cambodia. The investigation, requested by local communities, the Cambodian NGO Forum and UK-based NGO Global Witness (see Update 46), finds the project helped private companies to produce forest management plans which were "deficient in almost all regards", failed to reduce poverty in Cambodia and, in the process, broke safeguard policies designed to protect human rights and the environment.

[ ... ]

The Bank-supported $5 million Forest Concession Management and Control Pilot Project was designed to improve forest management , but merely gave support to the same crony companies previously responsible for ransacking Cambodia's forests over the past decade.

But that's hardly news. For years the Bank has thumb its nose at outside advice and funded projects of questionable account, arguing all the while that engagement is a better choice than isolation. By sitting at the table, the engagement argument goes, the Bank can better use its substantial heft to sway government policy in a positive direction.

The Bank, however, never managed to find the moxie to get the job done. Instead of stifling bad policy, the Bank helped pay for it, a fact that puts the Bank quite uncomfortably in the company of the timber thugs it ostensibly set out to close down.