When giving to the poorest just lines the pockets of the richest

At a meeting of the members of the World Bank in Singapore today, politicians from dozens of countries will discuss whether they are for corruption or against it. A surprisingly large number will be for it. Not that they will be asking for bribes themselves, you understand: these are men and women of the highest integrity. Rather, they will say that if aid to the Third World sometimes means taking money from poor people in rich countries and giving it to rich people in poor countries, then the World Bank should stop being so agitated about it.
They will be directing their anger against Paul Wolfowitz, the neocon architect of the Iraq War, who has agitated many people in his time. Since becoming president of the World Bank last year, he has earned the opposition of member governments and many among his staff for his zero-tolerance of corruption. When copies of the bills of the President of the Republic of Congo, Denis Sassou-Nguesso, showed that he had spent £169,000 on putting up himself, his butler, his personal photographer, hairdresser and about 50 other members of his entourage at the marble-clad Palace Hotel in Madison Avenue, New York, Wolfowitz listened to the anti-corruption groups which said that oil wealth was benefiting the elite rather than the 70 per cent of the population who live on less than £1.15 a day. When he wasn’t satisfied with the audits of the state oil company, he suspended debt relief.
He has also suspended hundreds of millions of dollars in loans to India, Bangladesh and Ethiopia and taken a hard look at the cautionary tale of Chad. In the late Nineties, optimists claimed the destitute sub-Saharan state could provide a model for the poor world when the World Bank agreed to fund a new oil pipeline on condition that the Chadian government agreed to spend revenues on health and education. The local dictator reneged on the terms, so Wolfowitz suspended aid.
Members of the World Bank’s board have told the New York Times that he was ‘over-emphasising’ corruption while the French are complaining that he is using it as an excuse to cut budgets. The figures don’t justify the cost-cutting charge – World Bank lending has risen on Wolfowitz’s watch – but I think I understand the roots of the disquiet he generates. Wolfowitz is a conservative who, during his career, has championed democracy in the Philippines and Indonesia, feminism in Iran and opposition to Saddam Hussein in Iraq, causes that were once the preserve of the liberal-left.
Once, when book editors were heaping deserved praise on Reading Lolita in Tehran, Azar Nafisi’s poignant account of educated women suffering under the Iranian mullahs, I managed to silence a literary dinner party for the first and I suspect only time in my life by asking if they realised the ‘Paul’ Nafisi had dedicated her book to was Paul Wolfowitz.
That aid money shouldn’t go to bloated elites is something the liberal-left supports. Indeed, it was James Wolfensohn, Wolfowitz’s liberal-minded predecessor who first said that the World Bank must take corruption seriously. Wolfowitz unnerves people because he behaves as if he means it and throws up intractable dilemmas in the process.
The paradox of aid is that the more money a country needs, the more likely it is to be stolen. The Republic of Congo and Chad have some of the poorest people on earth. What should you do for them? If you send aid, the odds are that the elites will steal money meant for others. If you don’t, you lose the chance that some at least will get past the thieves. If governments or charities make a fuss, they risk being thrown out of poor countries. If they don’t, they collaborate with the political systems that keep poor people poor. The Make Poverty History Campaign, which supported last year’s Live8 concert, escaped the dilemma by pretending it didn’t exist. In a speech last week, Hilary Benn, the International Development Minister, did much better when he acknowledged the problem and tried to find a way out by emphasising good governance.
He opposed Wolfowitz by asking: ‘Why should a child be denied education; why should a mother be denied healthcare; or an HIV positive person Aids treatment, just because someone or something in their government is corrupt?’ Rather than suspend loans, the World Bank should help build responsive and accountable governments. The trouble for Benn is that regimes that inflict the greatest suffering don’t want to be responsive. For Sudan’s genocidal rulers and the kleptomaniacs of Zimbabwe, reform would mean loss of power.
I hope you can see that Wolfowitz agitates so many people because he raises questions that have no easy answers. I’m not fit to provide them. All I can suggest is that it would be a mistake for the French, Oxfam, Christian Aid, Benn and all the rest of them to get into the position where it is ‘neoconservative’ to oppose corruption.

Every picture tells a story about Labour

It is an unlikely source of insight into the Labour party, but last week, the Daily Telegraph provided the clearest example yet of how unhinged British politics has become. Alice Thomson, a columnist for the paper, interviewed a ‘former Blairite cabinet minister’ – she didn’t say if it was Alan Milburn, Stephen Byers, Peter Mandelson or someone else – about the latest fight between Tony Blair and Gordon Brown.
Apparently, it began when Brown celebrated the birth of his son by sending out a family photograph. The unnamed Blairite fumed that ‘it was insufferably smug of him to pose with his wife and children as though he were some crown prince. It really annoyed Tony and Cherie’.
What’s telling is that Thomson didn’t burst out laughing and tell him that everyone with friends of child-bearing age receives dozens of pictures of babies, but treated the remark with leaden seriousness.
Perhaps she was right to do so because it’s true that the hatreds at the top of Labour are so all-consuming that it is seen as sinister for a father to arrange a family portrait. Suppose that he hadn’t. Then, I’m sure Brown’s failure to produce a picture would have been taken as evidence that the brooding monomaniac couldn’t take a break from plotting even to rejoice in the birth of his child.
There was a fashionable postmodern theory in the Nineties that people hate the alien ‘Other’. Anyone who has been caught up in office politics or a family feud will have learnt that, on the contrary, people hate what they know. Political parties that win elections keep the contempt bred by familiarity under control. Unless Labour can impose some self-restraint, it will lose.

A gamble too far for Britain

When it is asked why a party that owes more to Methodism than Marxism is pushing yet more people into gambling addiction, Labour blames the net. Like the rest of cyberspace, the online gambling dens are beyond the power of governments to control, it argues. We have to set up super-casinos to stop jobs and taxable revenue fleeing offshore.
Really? Online gambling is illegal in France, as it is in the US. Today, executives from an Austrian betting firm, Bwin, will appear before a Nice court after being arrested by French intelligence agents. ‘We are going down a route that treats betting executives as terrorists,’ huffed the European Betting Association. ‘It’s very scary.’
Maybe it is, but the French and the Americans are proving that the internet, like every other human activity, can be regulated by law and Britain’s state-sponsored gambling explosion is needless as well as pernicious.


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