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We Are Paying to Help, But
Corrupt Kenya Instead
Wall Street Journal
March 11, 2008
Thank you for focusing on the corruption in Kenya that is
encouraged, courtesy of American taxpayers, by the feckless World
Bank ("Kenya and the World Bank," Review & Outlook, March 6 - see
below).
Contrary to the nonsense from the bank director in Kenya, who
claimed that his buddies in the government were cleaning the place
up, Transparency International reports the opposite. In its 2007
global rankings, Kenya was tied as the 150th most corrupt country
(out of 179) with Sierra Leone, the Congo, and a couple "stan"
countries.
The Kenya Bribery Index 2006 issued by Transparency International
states: "corruption experienced by the Kenyan public increased in
2005." Even private companies, universities and sainted NGOs take
bribes, but at much smaller rates than government officials.
Again the World Bank demonstrates its primary purpose is to
feather the nest of its overpaid "country experts," who may reside
in fancy digs supplied by government beneficiaries of our largess.
Want to help the poor people of Kenya? Get the World Bank out.
Roger Meiners
Professor of Economics
University of Texas-Arlington
Kenya and the World Bank
Wall Street Journal
March 6, 2008
Kenya's two month political crisis may finally be coming to a
close with the announcement last week of a power-sharing deal
between President Mwai Kibaki and challenger Raila Odinga. With
some 1,000 dead and an estimated 600,000 people displaced since
the disputed December 27 election, we can only hope the deal holds.
Meantime, it's worth pondering how the country that until last
year was touted as an African success story became its latest
tragedy.
Which brings us to the World Bank. Just days after the election,
the bank made itself notorious when Colin Bruce, its country
director in Nairobi, wrote a memo reportedly endorsing Mr.
Kibaki's claims to victory and dismissing as "not thorough and
precise" statements by an EU observer mission that the election
had been riddled with irregularities. The bank has backpedaled
from Mr. Bruce's comments, but not without harming its reputation
among Kenyans: "We do not consider [Mr. Bruce] a neutral mediator
at all," a spokesman for Mr. Odinga's Orange Democratic Movement
told the Financial Times after the election.
As it happens, Mr. Bruce lived until recently in a home owned by
President Kibaki. (A bank spokesman tells us he has moved out,
following media scrutiny about this seeming conflict of interest.)
The bank has often been a cheerleader for Mr. Kibaki's government,
noting, in one fulsome press release last summer, that Kenya had
been awarded the U.N.'s "Public Service Award" for its "efforts in
improving transparency, accountability and responsiveness in
public service delivery."
Most importantly, bank lending to the Kibaki government is more
than double what it was in 2005, when Mr. Bruce became country
director. The bank's loan portfolio in Kenya now totals some $1
billion spread over 16 projects, with 10 more in the pipeline.
Roughly one in five of these dollars comes from the American
taxpayer.
This munificence has also occurred amid numerous signs of
corruption in the Kenyan government. In 2005, John Githongo, a
former journalist who was Mr. Kibaki's anticorruption czar, handed
the president a report implicating top officials, including the
vice president and finance minister, in a corrupt $40 million
passport printing scheme. Mr. Kibaki failed (or refused) to act on
the report, and Mr. Githongo was forced to flee to Britain
following threats on his life.
Then there is the corruption in the bank's own projects. In early
2007, the bank's internal anticorruption unit, known as INT,
completed a detailed review of four bank projects in Kenya
involving $357 million in bank financing. The review was never
made public, but a copy can be viewed by clicking on the nearby
link. In three of the four projects, INT found "numerous
indicators of serious irregularities" as well as "actual
occurrences of fraud and corruption consistent with findings of
previous forensic audits and examinations."
Take the $50 million Kenya Decentralized Reproductive Health and
HIV/AIDS Project. After reviewing $7.2 million in project
contracts, INT found "irregularity indicators" in contracts worth
$5.2 million. "Credible witnesses informed [INT] that Ministry
officials at all levels were engaged in corruption in virtually
every component of the project," the review states.
In a second AIDS-related "disaster response project" known as
KHADREP, INT uncovered irregularities in 29 of the 36 contracts it
reviewed. Among the lowlights: "Grant recipients reported that the
continuous requests for bribes made by the government officials
diverted funds from the activities' objectives. One grant
recipient explained that, instead of paying secondary school fees
for orphans, it used grant money to pay bribes. They also stated
that this caused orphans to drop out of school and engage in
illegal activities, including prostitution, which would inevitably
increase the exposure and risk of the HIV/AIDS infection." In
other words, a project intended to reduce HIV infection helped to
increase it.
To its credit, the bank did take steps against corruption under
former presidents James Wolfensohn and Paul Wolfowitz. In 2006,
Mr. Wolfowitz withheld some $260 million in lending to Kenya and
sought to link future lending to guarantees of press freedom. But
he was fought tooth-and-nail both by the bank's bureaucracy and
its board, particularly European members. The fight over
corruption -- replicated in India and Cambodia, as we have
reported
here and
here -- helped to inspire the staff coup that
forced Mr. Wolfowitz out last spring. Lending to Kenya ramped up
dramatically as Mr. Wolfowitz was being forced out the door.
And the money will keep flowing under current President Robert
Zoellick. The largest of the corrupted Kenyan projects identified
by INT -- a $207 million road-building scheme -- will continue
disbursing funds through the end of 2009. The usual anticorruption
"action plans" are in the works, and the bank has acknowledged "mismanagement
of some project funds by some officials and NGOs" in the KHADREP
project, but will now fund an even more generous $80 million
follow up. It's unlikely to be crowned with success: Even by the
bank's own internal self-assessments, only 25% of its Kenya
projects are rated "satisfactory" for overall bank performance.
Why does all this matter? Corruption in Kenya isn't exactly
shocking news. But the depredations of the last two months were
shocking, and they were largely the product of a culture of
corruption that made it possible either for Mr. Kibaki to attempt
to steal the election or for Mr. Odinga to believe that it had
been stolen. That's a culture to which the World Bank has
contributed more than its share, and to which Americans are still
being asked to contribute through U.S. appropriations for the bank.
Is it too much to ask for even a little Congressional oversight?
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