TRALAC - Trade Law Centre

Zoellick's term is good news for East Africa

Monday, 11 June 2007

Source: East African (Kenya)

The expected appointment of Robert Zoellick as president of the World Bank will likely result in few policy changes affecting East Africa.

And that could be interpreted as good news for Kenya, Tanzania and Uganda, each of which has recently received substantial amounts of assistance from the giant lender.

African officials commenting on President George W. Bush’s nomination of Mr Zoellick have generally spoken in positive terms.

Concerns continue to be expressed, however, in regard to the bank’s governance structure. Controversies culminating in the resignation of Paul Wolfowitz as bank president served to highlight what some Africans describe as institutional inequities that must be corrected.

Abdoulaye Diop, Senegal’s economy minister, called the choice of Mr Zoellick “excellent.” Mr Diop pointed in particular to the nominee’s tenure as United States trade representative, telling Reuters that Mr Zoellick had established himself as “a great friend of Africa” through his work on the Africa Growth and Opportunity Act (Agoa).

Agoa, which allows for preferential treatment of most African exports to the United States, has proven highly popular in Kenya and other textile-producing countries.

The Common Market for East and Southern Africa (Comesa) trade bloc, also welcomed Mr Bush’s announcement.

An editorial in Comesa’s newsletter said Mr Zoellick has “a deep knowledge, passion and sympathy for Africa’s development and an interest in regional integration. We have no doubt that through Mr Zoellick, Africa and Comesa in particular will have a listening partner.”

Mr Zoellick, who also co-ordinated US humanitarian aid to Darfur while serving as deputy secretary of state, signaled his ongoing commitment to Africa by making three sub-Saharan countries his first stops on a tour intended to rally support for his nomination as World Bank president. He travelled last week to Ghana, which currently holds the chair of the African Union, as well as to Ethiopia and South Africa.

The 53-year-old Harvard Law School graduate, currently vice-chairman of a Wall Street investment house, says it is too soon to offer specific policy prescriptions for the World Bank. But he did tell the Associated Press that “too many Africans and others around the world struggle with weak governance, corruption, inadequate schools and health programmes, poor infrastructure, environmental problems and restraints on economic freedom and property rights that inhibit strong, sustainable growth.

“The World Bank can help,” Mr Zoellick added.

The nominee’s focus on Africa is consistent with priorities articulated by Mr Wolfowitz. The outgoing president had identified efforts to reduce poverty and corruption in Africa as central to the bank’s mission.

Mr Zoellick has additional similarities to Mr Wolfowitz, but The New York Times called attention to differences between the two American conservatives in a recent editorial.

“Mr Zoellick is just about everything Mr Wolfowitz was not,” the Times commented. “He is an able diplomat; experienced and interested in the details of development, trade and governance.”

The influential newspaper then expressed hope that “Mr Zoellick will not shy away from the important challenge of fighting corruption, a campaign that Mr Wolfowitz embraced but then undermined through his own ethical obtuseness, in arranging a transfer and extraordinary pay raise for his companion.”

Some analysts suggest, however, that the bank has downplayed governance issues recently in making sizable lending commitments to Kenya, Tanzania, Uganda and a few other African countries closely allied to the United States.

Judy Connor, the bank’s country director for both Tanzania and Uganda, emphasised the progress the two countries had made in controlling graft in a recent interview with The EastAfrican. Ms Connor offered those favourable appraisals in explaining why the bank had recently approved major loans for the Bujagali Dam in Uganda and for anti-poverty and education initiatives in Tanzania.

Colin Bruce, country director for Kenya, gave a similarly upbeat evaluation of Mwai Kibaki administration’s anti-corruption policies in a separate interview last month. Kenya is poised to receive a total of $860 million in new project loans from the bank this year and next.

Critics of the Bretton Woods institutions are meanwhile calling attention to political parallels between Mr Zoellick and Mr Wolfowitz.

Mr Bush’s new nominee is not as closely identified with the Iraq war as is Mr Wolfowitz, who strongly advocated the 2003 US invasion and continued to defend it in his capacity as a senior Pentagon official. But Mr Zoellick also favoured the overthrow of Saddam Hussein, calling for the ouster of the Iraqi dictator in a 1998 policy paper that set forth the agenda of a coterie of Republican Party hawks known as the neo-conservatives.

Progressive analysts in the United States are also recalling a commentary Mr Zoellick wrote in 2003 for London’s Financial Times.

Referring to the breakdown of North-South trade talks held that year in Mexico, the then-US trade representative argued that the key division within the World Trade Organisation (WTO) was “between the can-do and the won’t do.” Mr Zoellick framed the trade demands of several developing countries in this way: “As WTO members ponder the future, the US will not wait: we will move towards free trade with can-do countries.”

Mr Zoellick’s confrontational approach yielded no gains for the United States in that instance, notes Sarah Anderson, a global economy analyst with the Washington-based Institute for Policy Studies. “During his remaining year and a half as chief trade negotiator, Zoellick was unable to revive the World Trade Organisation talks, which remain stalled today,” Ms Anderson observes in a posting on a left-wing Website.

But most of the nations with seats on the World Bank’s 24-member board of directors have already indicated that they will accede to Mr Bush’s choice for the bank’s presidency. The board is thus likely to confirm Mr Zoellick later this month as the latest in an unbroken line of American leaders of the World Bank.

The makeup of the board and the power imbalances among the bank’s member-states may nevertheless continue to draw objections from some developing countries.

South African President Thabo Mbeki, for example, declared last week: “The distribution of voting shares in the fund and bank need reform — the better to reflect the more plural economic world we live in now, compared to that of the 1940s, as well as to prepare for the changes to come.”

Under the World Bank’s current voting system, the United States holds a nearly 17 per cent share – larger, by far, than that of any other country. Kenya’s 0.17 per cent weighted vote is, for example, 100 times smaller than America’s.