THE BLOG
04/21/2008 10:01 am ET Updated May 25, 2011

Robert Zoellick's Slightly Tardy Clarion Calls

The Bush Administration's former deputy to Condi Rice, Robert Zoellick, who currently runs the World Bank, has been making some frantic calls. It is just that they are a trifle late.

First, on the price rise of food grains, Zoellick spoke about the risk of social unrest in April 2008, just when the news media were reporting riots, hospital wards filled with wounded people, and the fall of the Haitian government. Food riots have also broken out in Egypt, Ethiopia, Indonesia, Mauritania, Mozambique, Senegal, and many other countries around the world.

But that is hardly an early warning, when the Consultative Group on International Agricultural Research (CGIAR), headquartered in and chaired by the World Bank was itself aggregating information on the rise of food prices since year 2000, including reporting a trebling of wheat prices and doubling of rice and corn prices. Income growth and population expansion fuel the rise in demand for human food and animal feed, and there has not been a corresponding ramping up of production, and also productivity increase has not kept pace. From the CGIAR graph, it does appear that the sharpest increases have occurred in the price of rice and wheat, and they are generally not used for ethanol production. Corn, which is used for biofuel manufacturing, has risen the least in price as compared to rice and wheat. Additionally, the sharp increase in the price of oil, rice, wheat and corn are also all correlated with the falling dollar, and there has been discussion about the role of financial speculation in the rise in commodity prices.

Further, in April 2008 (all those announcements always appear to coincide with the arrival of the world's Finance Ministers or Treasury Secretaries to Washington DC for their semi-annual meetings), Zoellick called for investment into Africa by sovereign wealth funds, the largest pools of investable cash on the planet. But four months earlier, on December 5, 2007, SEC Chairman Christopher Cox had predicted in a Washington D.C. event attended by think tankers, senior executives of corporations, law firm partners and Appeals Court judges that not only would sovereign funds invest heavily in developing countries, but that their impact would be far greater in Africa, Asia and Latin America than in the US because of the much larger size of the US economy.

A Pattern
So much for the clarion calls from the World Bank! But it would merely be an amusing anecdote if it were not a pattern at the Bank of delays and management failings having severe consequences worldwide. It was proved beyond doubt that the World Bank was at least a decade late on HIV/AIDS in the 1980s and 1990s, when people without knowledge of the challenges of vaccine development were holding managerial positions and pinning hopes on a vaccine against the highly mutating HIV virus. Even today, there is no real prospect of a vaccine against HIV. But in the 1990s, those in leadership positions at the World Bank were also ignoring examples of genuine public health interventions that were sufficient in many countries in making a major dent on the then-relatively small epidemic, claiming that those interventions were not cost-effective or were hard to do or any number of excuses on "Yes, We Can't." Indeed, in the US, years ago, even before the introduction of antiretroviral medicines, the incidence of HIV/AIDS dropped dramatically because of the impact of public health interventions.

Having co-authored one of the earliest scientific papers on HIV/AIDS, sexual behavior and poverty in sub-Saharan Africa, central to building public health programs, I can attest to how much greater an impact on slowing the pace of the devastating pandemic could have been achieved had there been timely action by the largest source of development finance, the World Bank Group, that receives over a billion dollars every year from the US Congress. While Sebastian Mallaby in his book "The World's Banker" pinpoints that responsibility for those delays indeed went all the way to the top of the World Bank, nowhere is it addressed who is to be held responsible, due to managerial inaction, for millions of people having needlessly got infected by HIV because of the delayed introduction of public health programs. Becoming HIV infected is still a slow death sentence in many countries, in the absence of active, well managed treatment programs. On hunger, similarly, despite rising food prices documented since at least year 2000 why was the trumpet sounded only in April 2008 by the Bank's head? Who is responsible for those delays, resulting turmoil and deaths?

In those days, as we see today in the parallel case of agriculture and food grains price rise, is the dilly-dallying by the World Bank with the world's preeminent agricultural research and development organ, the CGIAR, in what appears as an endless preoccupation with "change-management" and by some of the same individuals concerned. The chair of CGIAR, for instance, is always a World Bank officer, and currently is an urban planner by training, whose long stint at the World Bank includes having headed, voilà, change management for the Bank when the individual was the institution's vice president for human resources!

What is the CGIAR? Established in 1971, it is described as a strategic partnership of countries, international and regional organizations and private foundations supporting the work of 15 international research Centers. In collaboration with national agricultural research systems, civil society and the private sector, the CGIAR is expected to foster sustainable agricultural growth through high-quality science aimed at stronger food security, better human nutrition and health, higher incomes and improved management of natural resources. Among leaders in creating CGIAR was my old friend, David Bell, former budget director of the US in the Kennedy Administration, ex-USAID chief and later Executive Vice President of the Ford Foundation. Bell mentioned that the concern then was to get CGIAR away from the grip of a stifling bureaucracy, such as the UN's Food and Agriculture Organization, at the time that was suspected of being uninterested in research and development. Looks like the CGIAR fell into the grip of another such bureaucracy. Research and development is much better managed by those who have invested years of effort in the scientific enterprise, and it is not a bureaucratic activity as I explained in my chapter published by the UNDP as official documentation for the International Conference on Financing attended by most heads of government.

"Let's do something different, so long as it is more of the same" appears to have been the saying particularly fitting for the World Bank's leadership of the CGIAR. A look at CGIAR's "change management" page provides a staggering number of later-abandoned and other ill-managed efforts, just in the past decade alone: Most of the reviews commissioned have been by insiders who are reviewing their own or their friends'/mentors'/protégés'/old colleagues'/donors' work. It is no wonder that the wheel needs to be re-invented for the umpteenth time.

Politicians, bureaucrats and others have called the diversion of "food grain to ethanol production" and the resulting price rise of food worldwide as a "crime against humanity." It is intriguing to think of the venerable, patrician Senator Dick Lugar, former Chairman and current Ranking Member of the, yes élite, Senate Foreign Relations Committee, in that light just because he seeks the duality of weaning America away from fossil fuels,
and equally, finding new uses and markets for his home state Indiana's abundant corn. Obviously, given the reality, such talk should rather be targeted at the decade or more of inaction or lethargy by those in multilateral and national entities that ought to have been ensuring the appropriate level of food crop productivity, distribution, and support for farmers working on 400 million small farms in developing countries, many of whom are deeply in debt, and for the missing but essential complex web of nimble actions. Further, some pundits are opining that only when non-food crops and agricultural waste are enzymatically convertible by biotechnology to ethanol on an industrial scale, should they form even 10% of car fuel. But the rise in prices of food grains started years before the recent spurt in biofuels production, and extends across food grains that are not even used for biofuels.

And the tardy clarion calls only reinforce the perception that many of those managerially responsible for the delays by the Bank see a head like Zoellick, whose term is always limited, as an individual who can help them divert attention from absolute or relative inaction by getting him to issue visible pronouncements just when governments and parliaments start to wonder about why the "international system" has failed yet again. Even when he was at the State Department, Zoellick would have been privy to data on supply/demand, rise in food prices, and related information from the CGIAR. That is because the State Department's USAID is a core sponsor and Executive Council member of CGIAR. Indeed, about $500 million is being spent every year by donors on the CGIAR alone. Beyond that, national agricultural research systems spend multi-millions more, some of it lent by the World Bank from annual appropriations provided by the US Congress.

Dumping food-aid, suddenly, is well-known to destroy local agriculture, because consumers will not buy local produce if they can get donated grain free of charge, which then can bankrupt local farmers and thereby cause recurrent famines. That forms the core of the studies by Nobel prize winner Amartya Sen, who highlighted how African agriculture was often decimated by sporadic, yet well-intentioned, food grain donations, while agencies ignored the growth and development of science-based local agricultural systems. That is why urgent attention is something that could and should have happened at least a decade ago in view of demographic and economic changes that have for long been predicted.

The GAO, the World Bank, Senator Evan Bayh, and the Appropriations SubCommittee
All this is why there was great anticipation for Senator Evan Bayh's proposal, approved unanimously in the Senate, to get underway a genuine external GAO review of anti-corruption, transparency/accountability and other management practices at the World Bank that could make a real difference in the Bank's performance. But somehow, that GAO study was dropped from the joint Senate-House legislation that became law. There is mostly an awkward silence in response to the question on who was responsible. It now appears, from several Congressional sources, that Senate staff unilaterally deleted that important study, and Senators and Representatives did not even have the usual joint House-Senate Conference on the $34.4 billion Foreign Operations Appropriations bill in 2007. Why bother to run for election to the US Senate if one can be on the permanent staff of the Senate, earn just about as much as a US Senator, and do what even US Senators cannot do - i.e. quietly take out of a bill a provision approved unanimously by the entire Senate!

What other Senate and House of Representatives offices can do
Senators Bayh, Leahy and Lugar wrote to the GAO to reinstate a study on the World Bank on April 17, 2008, and Bayh's communications director sent me a copy of the letter. The letter was written in their capacity as US Senators, not as Chair and Ranking Member of key oversight committees and subcommittees, and does not cover corruption and mismanagement within the World Bank itself. The probability of the GAO acting on such individual Senators' un-funded request that is not part of any legislation, for a multilateral organization with immunities, is unknown. Now, it is up to other offices with oversight responsibilities to participate, to ensure that not just the narrowly written bullet points in that letter turn out as the GAO's terms of reference, which are entirely focused on processes external to the World Bank, but strengthen the request to the GAO to include mismanagement internal to the World Bank. Otherwise, the issues raised in this article, for instance, cannot be looked into by the GAO. After all, $1.277 billion, yes, that's $1277 million for a 12 month period, will be the appropriation from the US Congress to the World Bank in this year's Appropriations Foreign Operations bill, and we think at least the time it takes to write a more comprehensive letter to the GAO will serve as responsible oversight.