AlterPolitics New Post

The Neoliberal Ways Of The World Bank May Be Numbered If Jeffrey Sachs Becomes Its President

by on Friday, March 9, 2012 at 11:19 am EDT in Politics, World

When World Bank President Robert Zoellick announced that he would step down at the end of his five-year term in June, calls were made for his successor to be selected based on merit this time, rather than on nationality, as has been the custom for the past 68 years.

Whereas the International Monetary Fund’s Managing Director has always been a European, the World Bank’s President has always been an American. Though the U.S. is indeed the institution’s biggest funder and largest shareholder, its finances are paid by taxpayers around the world.

The moment Zoellick made his announcement last January, the Obama Administration indicated it had every intention of inserting an American as the new President. At a briefing on Feb. 21 , State Dept. Spokesperson Victoria Nuland stated, “Our expectation is that we will nominate a strong American candidate and we will put our full backing behind that person.” 

After Nuland ruled out Secretary of State Hillary Clinton as a possible successor, several other top contenders’ names have been floated around.

These include Former Obama Economic Adviser and former U.S. Treasury Secretary Lawrence Summers, U.S. Ambassador to the U.N. Susan Rice (who has also been rumored to be Clinton’s likely replacement as Secretary of State), PepsiCo Inc CEO Indra Nooyi, and Sen. John Kerry (note: his spokesperson said he was not interested, and had never even been contacted about it).

If Rice does in fact have her eyes on State, this would leave Summers and Nooyi as two ‘short-listed’ contenders. The Chicago Tribune listed the pros and cons of Summers and Nooyi:

Lawrence Summers:

Sources within the World Bank and the Obama administration said that while Summers has excellent credentials, he also has political baggage.

While president of Harvard University, he created a firestorm by suggesting women may have a lower aptitude for science and engineering. He is also remembered for a memo he wrote in 1991 when he was the World Bank’s top economist that laid out the economic logic of dumping toxic waste in developing countries.

By selecting Summers, Obama “would have to use political capital” with his liberal base and women’s groups, the source with knowledge of the administration’s thinking said.

Indra Nooyi:

Nooyi, the Indian-born chief executive of PepsiCo, has been under pressure from investors for a stagnating stock price. She recently laid out a plan to turn around the company’s North American soft drink business and took responsibility for management missteps. PepsiCo spokesman Peter Land declined to comment on whether she would be interested in the World Bank job.

If Obama chose a woman, he would be breaking the mold for a job that has always been held by a white male, a move that could garner support from developing nations.

But as the White House vets its candidates, it is facing international pressure to democratize the selection process. The fastest emerging economies, including China, Russia, India, Brazil, and S. Africa have coalesced to end this 70 year old passport-as-determining-factor tradition.

They were so appalled at how Europe arrogantly moved to replace the IMF head last year with one of its own, despite pleas to open the process, that they have responded more forcefully this time with Zoellick’s announcement. They have every intention of nominating some stellar candidates of their own to fill the impending vacancy.

Well, one American Economist, Jeffrey Sachs, who is director of the Earth Institute at Columbia University and serves as Adviser to U.N. Secretary General Ban Ki-moon, has helped to make this a true contest. He has thrown his hat into the ring, albeit his nomination didn’t come from the U.S. He has been nominated by Kenya, Malaysia, Jordan, Namibia, Bhutan and East Timor.

And in stark contrast to outgoing President (Bush-appointee) Zoellick, who had been a former Managing Dir. of Goldman Sachs, Jeffrey Sachs considers ‘Neoliberal’ a dirty word (as demonstrated by his Tweeted response to one critic’s accusation):


Here is how he distinguishes himself from traditional World Bank Presidents:

Unlike previous World Bank presidents, I don’t come from Wall Street or U.S. politics. I am a practitioner of economic development, a scholar and a writer. My track record is to side with the poor and hungry, not with a corporate balance sheet or a government. Yet the solutions work for all — the poor, companies, governments and the rest of us — by creating a more prosperous, healthy and secure world.

Sachs has the full support of Congressman John Conyers (D-MI), who is circulating a letter on his behalf to President Obama. Current signatories include John Conyers, Hansen Clarke, Jesse Jackson, Jr., Barbara Lee, Zoe Lofgren, Jim McGovern, Lynn Woolsey, Raul Grijalva, Eleanor Holmes Norton, Keith Ellison, Robert Brady, Rubén Hinojosa, Peter DeFazio, Steve Cohen, Maxine Waters, and Bob Filner. 

Mark Weisbrot, in his piece yesterday in The Guardian (which I highly recommend reading), highlighted some of the World Bank’s disgraceful policies over the last 15 years. He then explains why Sachs is the right guy to help turn the institution around:

The bank could … play a positive role by increased financing of urgent development needs such as health, education, and sustainable agriculture. In these areas, Jeffrey Sachs has a proven track record over the past decade. He has played an important role in supporting the Global Fund to Fight Aids, Tuberculosis and Malaria, which has saved millions of lives in poor countries. His Millennium Villages project has also provided a significant positive example of how development aid can be used to boost agricultural productivity and health outcomes. This is an important refutation of the widespread cynicism that helps limit the financing of real, positive development aid.

Sachs has also been a strong advocate for debt cancellation in poor countries. His 2008 book Common Wealth provides one of the best overviews of the interrelated problems of climate change, development, poverty, population and health – as well as a set of concrete proposals for addressing them. This is clearly someone who has the knowledge, ideas, and experience to lead the bank in a different direction. … As Sachs noted last week:

“US officials have traditionally viewed the World Bank as an extension of United States foreign policy and commercial interests. … Many projects have catered to US corporate interests rather than to sustainable development.”

But Weisbrot believes ‘Sachs is facing an uphill battle,’ being an election year. Many of Obama’s biggest contributors happen to be the Wall Street banks and corporations that have millions at stake in the World Bank. They will obviously want another one of their Neoliberal bank cronies to man the top spot. 

World Bank officials will be accepting nominations for Zoellick’s successor until March 23rd.

WATCH CNN’s recent interview with Jeffrey Sachs:

TAKE ACTION: Ask your Congressperson to Sign John Conyers Letter Pressing Obama to Name Sachs to World Bank (The deadline to sign Conyers letter to Obama is COB Monday, March 12.)


Thought it only fair to post a quote from Naomi Klein, who in her book, The Shock Doctrine, critiqued Neoliberal policies that Sachs had overseen in places like Poland and Russia. She was asked in 2007, if she believed Sachs was merely re-branding his image, or had truly changed: 

A lot of people are under the impression that Jeffrey Sachs has renounced his past as a shock therapist and is doing penance now. But if you read The End of Poverty more closely he continues to defend these policies, but simply says there should be a greater cushion for the people at the bottom.

The real legacy of neoliberalism is the story of the income gap. It destroyed the tools that narrowed the gap between rich and poor. The very people who opened up this violent divide might now be saying that we have to do something for the people at the very bottom, but they still have nothing to say for the people in the middle who’ve lost everything.

This is really just a charity model. Jeffrey Sachs says he defines poverty as those whose lives are at risk, the people living on a dollar a day, the same people discussed in the Millennium Development Goals. Of course that needs to be addressed, but let us be clear that we’re talking here about noblesse oblige, that’s all.

Just thought I should put it out there, since I have a world of respect for Naomi Klein and her opinions on the matter.

WATCH: Press Corps Hammers U.S. State Dept Spokesperson On U.S. Impotence In Middle East

by on Thursday, November 3, 2011 at 12:00 pm EDT in Middle East, Politics, World

This U.S. State Department press briefing exemplifies how the United States’ foreign policy in the Middle East is both nonsensical and indefensible.

State Dept. Spokesperson Victoria Nuland (the wife of Neocon Robert Kagan) could not give a sound and plausible answer to a single question she fielded. The press corp questions continued to come back to one central theme: Why is the U.S. impotent in its ability to influence Israel to stop its illegal settlement expansions, and to engage with the Palestinians for peace, when it gives this tiny country $3 billion per year in military aid — which could clearly be used to pressure them?

Two reporters asked her outright if the Israel Lobby’s influence, as it pertains to President Obama’s 2012 reelection prospects, has made it impossible for the United States to act as an honest broker in the ‘peace process.’  

One reporter, when referring to U.S. legislation which automatically defunded UNESCO this week for accepting Palestine as a member, thus harming America’s own national security interests in the process, asked Nuland about the lobbying required to force Congress to change the two laws:

Does the Administration find it unpalatable that it has to go to another government [Israel], to other government officials, to lobby members of its own legislature?



How The U.S. Has Undermined Its Own Vital Interests To Appease Israel At The UN

by on Tuesday, November 1, 2011 at 12:13 pm EDT in Middle East, World

Yesterday, the Palestinians’ bid for full membership at the United Nations Educational, Scientific and Cultural Organization (UNESCO) was approved by a vote of 107-14, with 52 abstentions.

This move will help to prevent the Palestinians’ cultural-heritage sites and artifacts from being plundered, as Israel continues its efforts to Judaize the occupied territory. 

But what might come as a surprise to many in the United States, is that the U.S. Congress created virtual ‘UN poison pills’ in past legislation that automatically damages the U.S.’s own strategic interests the moment Palestinians gain membership at any UN agency:

Legislation dating from 1990 and 1994 mandates a complete cutoff of American financing to any United Nations agency that accepts the Palestinians as a full member. State Department lawyers judged that there was no leeway in the legislation, and no possibility of a waiver, so the United States contribution for 2011 and future years will not be paid.

This means the U.S. (as confirmed by the State Department) will withhold its $80 million annual commitment to UNESCO’s funding (with a $60 million portion of this total being stopped immediately). The U.S. is responsible for 22% of the organization’s total funding.

The Palestinians are reported to be seeking membership in other UN organizations as well, which too would face U.S. funding cuts. These include: UN Industrial Development Organization (UNIDO), the World Intellectual Property Organization (WIPO), the United Nations Conference on Trade and Development (UNCTAD), World Health Organization (WHO), International Telecommunications Union (ITU), the International Civil Aviation Organization (ICAO), the International Atomic Energy Agency (IAEA), and others.

How will this damage U.S. strategic interests? 

President of the UN Foundation and former U.S. Senator (D-CO) Timothy Wirth writes that the U.S. will lose its leverage over these international bodies, and with it, the ability to advance America’s interests and ideals around the world. He believes some of America’s global rivals might even volunteer to cover America’s reneged financial commitments, filling its leadership void in the process.

Sen. Wirth explains the significance of UNESCO’s work:

To Americans, UNESCO is best known for designating World Heritage Sites. It also leads global efforts to bring clean water to the poor, promotes educational and curriculum building in the developing world, and manages a tsunami early warning system in the Pacific, among other important tasks. This critical work would be jeopardized if UNESCO’s top funder stops paying its bills.

UNESCO’s director general, Irena Bokova, reveals that the U.S. funding cut will directly impact America’s security interests in Afghanistan and Iraq, where UNESCO is “helping governments and communities prepare for life after the withdrawal of U.S. military forces.”

Sen. Wirth details how U.S. economic interests abroad will be negatively impacted when it cuts its funding for WIPO:

This is a lesser known UN agency that serves American businesses and brands by setting global standards for copyrights and adjudicating cross border patent disputes. In the last year alone, dozens of major American companies brought cases before WIPO — the American Automobile Association, Apple, The North Face, Costco and Facebook to name just a few. If Palestine joins WIPO, the United States will have to pull out, limiting its ability to steer policies in ways that advance American economic interests and create jobs here at home.

He explains how IAEA is critical to U.S. national security interests:

In recent years the IAEA has been a critical part of American attempts to constrain the nuclear ambitions of Iran and North Korea. In 2006, the Bush administration successfully lobbied other members of the IAEA executive board to refer Iran’s nuclear program to the Security Council for sanctions. Should the United States stop paying membership dues to the IAEA–which it could be forced to do under current legislation if Palestine is admitted as a member — the United States would give up our vote on the executive board. It would literally lose a seat at the table during the next nuclear crisis.

And he stresses the importance of WHO:

The WHO works closely with the United States–particularly the Centers for Disease Control and Prevention — to keep infectious diseases like the Avian Flu from reaching our shores. If the Palestinians are admitted to the WHO, that cooperation would have to stop under the current law.

Here is the irony: These legislative ‘poison pills,’ so harmful to U.S. interests, were passed entirely for the benefit of Israel, and yet Israel has no similar legislation of its own to trigger a cut in funding for UNESCO (Israel contributes 3% of the organization’s funding). In fact, while U.S. international interests have been marred by this automatic funding cut, Israel is rationally mulling over what it might do. Because, of course, only a fool would rush to action, and risk harming his own vital interests in the process.

When the U.S. State Department Spokesperson Victoria Nuland was asked why the Administration felt it was even necessary to vote against this Palestinian membership bid at UNESCO, she stated that it undermines the ‘peace process.’

The peace process?

The U.S.-lead Israeli-Palestinian peace process was effectively buried in December 2010 after Benjamin Netanyahu refused Obama’s unprecedented offer of an additional $3B in military aid, plus a guarantee that the U.S. would veto any UN Security Council Resolutions against Israel for 1 year, regardless of what Israel might do; all this for a mere 3-month extension of a partial moratorium on Israel’s illegal settlement expansions. 

This rejection made it clear to the entire world that Israel has no intentions of ever ceding any part of the occupied territories to the Palestinians to foment peace. No one, outside the Obama Administration, pretends the U.S.-led Middle East peace process is still a legitimate undertaking. Yet, this is the only excuse the Administration can come up with to explain why it continues to sabotage America’s own vital interests in the name of Israel.

Just as banking lobbyists have seized control of our political establishment, making it impossible for politicians to regulate them, or to hold them to account for bringing the entire U.S. economy to its knees, the Israel Lobby has effectively hijacked our political establishment with regards to U.S. policy in the Middle East.

Will it take an #OccupyAIPAC movement to ensure that U.S. politicians put the national security interests of American citizens — all 100% of us — above the interests of a foreign country?