I discuss in Public Policy Hooligan how I nabbed some of the confidential documents exposed below. The Bank continues propping up tyrants and bankrolling destructive economic policies around the globe. It should have been abolished decades ago.

Wall Street Journal

September 30, 1985

Behind the Words at the World Bank

By James Bovard

As some 9,000 interested parties gather in Seoul this week for the World Bank's annual meeting, accolades will be heard for the bank's new awareness of the private sector, and its crucial role in spurring international development. But what changes the bank has made in recent years don't add up to an improvement.

Bank President A.W. Clausen often praises private

enterprise these days, but the vast majority of World Bank

loans still go to strengthen government bureaucracies and

reinforce their control over the economy. Loans to communist

countries alone have increased fourfold since 1981 and will

constitute 13.4% of the bank's 1985 lending. The bank has

been the driving force behind the nationalization of oil and

natural gas throughout the Third World. And all the while, it

has shown too little concern for human-rights violations in

its projects.

The bank has given the government of Indonesia more than

$600 million to remove — sometimes forcibly — several

million people from the densely populated island of Java and

resettle them on comparatively barren islands elsewhere in

Indonesia. Despite reports of violence, the bank continues

lauding the project as "the largest voluntary migration" in

recent history.

The London-based Anti-Slavery Society for Human Rights

reported to the United Nations that at least one supposedly

vacant island being given to the migrants was already

inhabited — and that the Indonesian army cleared the island

by setting the original inhabitants' crops on fire. Indonesia

is sending hundreds of thousands of migrants to the island of

Irian Jayaand the island's original inhabitants claim they

are being driven from their lands by the Indonesian army. The

Indonesian government is also resettling Javanese on the

island of East Timor — which the army seized in 1975.

According to a 1983 Washington Post account quoting relief

workers, an estimated 150,000 of the island's 700,000

inhabitants were killed or left to die of starvation in the

ensuing strife.

The transmigration project is supposed to make the

migrants more productive. But the project mainly moves poor

farmers from small amounts of good land to large amounts of

nearly worthless land. The government often fails to honor

its promises to provide water, roads, schools and tools. It

costs about $6,000 to move each family, yet most families

that are moved end up making little or no income from their

new habitats, and many who previously supported themselves in

Java have gone on welfare.

The Polonoroeste project in Brazil is a similar fiasco.

The bank has poured almost half a billion dollars into a

scheme to move landless farmers into cleared areas in the

Amazon tropical forests. But about all the project succeeded

in doing was building a road and encouraging tens of

thousands of people to move to an area with terrible farm

land and almost no infrastructure. The project has

pointlessly cut down hundreds of square miles of rain forests

and engendered much violence between the new arrivals and the

indigenous Indians. The bank specified in the original loan

agreement with Brazil that the Indians' rights must be

respected, but then did nothing when the Indians' lands were

trampled. After two years' uproar by U.S. environmental

groups and extensive congressional hearings, the bank has

temporarily stopped funding the project.

To its credit, the bank has contributed funds to help

privatize a few government corporations in Africa and Asia.

But at the same time the bank is spending a few million

dollars to resurrect private companies that previous bank

loans often helped nationalize, it is pouring billions into

maintaining state-owned enterprises (SOEs) throughout the

Third World.

The bank's latest kick is "public sector improvement

loans" — basically, transferring the cost of socialist

inefficiency from the recipient government to the World

Bank's donors. Morocco received $200 million for "actions to

improve public investment planning and the functioning of the

public enterprise sector." Chile received $11 million to help

the government "orient and guide the process of resource

allocations" among SOEs. Ecuador received $14 million "to

increase the public sector's contribution to economic growth

by improving the management of key public enterprises."

The bank's biggest socialistic binge is occurring in

energy projects. Most World Bank energy loans either displace

foreign private investment or deter the development of

private companies in recipient countries. World Bank 1985

energy loans include $92 million to the Yugoslavian

government for oil and gas exploration, $233 million to the

Pakistani government oil companies, $248 million to the

Indian government for coal-mine development, and $110 million

to the Bangladesh government for natural gas exploration.

These loans do nothing to increase development — but only

add to the size of Third World governments, breeding more

bureaucrats and fewer entrepreneurs.

The biggest change at the bank since Mr. Clausen took over

in 1981 is the huge increase in lending to communist

countries. Since 1981, China, Romania, Ethiopia, Yugoslavia

and Hungary have received more than $6 billion — including

almost $2 billion in 1985. Even though China has easy access

to commercial credit, Mr. Clausen favors doubling World Bank

lending to China from the current $1 billion a year. Nor is

World Bank financing being used to pry China away from

socialism — the bank gave China a $47 million zero-interest,

50-year loan for the development of its state farms.

The bank also is busy subsidizing America's trade

competitors. South Korea received $556 million in World Bank

loans this past year for purposes like providing "much needed

capital for economically and financially viable industrial

projects" and enhancing rail capacity in the Seoul industrial

corridor. South Korea is better managed than most World Bank

borrowers — but, like most borrowers, it has long had easy

access to commercial credit and need not rely on the bank's

subsidies.

The bank, like most international organizations, has tried

to use the African famine to drum up support to boost its own

budget. Though much of Mr. Clausen's rhetoric is devoted to

Africa's dire straits, barely 10% of the bank's 1985 loans

have gone to sub-Saharan Africa. And the biggest beneficiary

was Ethiopia.

This past year, much to the bank's embarrassment, its loan

volume fell 7%. A classified internal World Bank memo late

last year outlined plans to relax all types of loan

requirements in order to spur borrower demand. The bank

subsequently abolished its one-quarter percent "handling fee"

on loans. The bank currently has $17 billion in unlent cash

reserves.

Despite the bank's inability to meet its loan goals, Mr.

Clausen wants to expand. Earlier this year he said he hoped

to request a $40 billion increase in callable capital

(existing total: $55.8 billion), though he may be retreating

from that goal now. Whatever, Mr. Clausen wants the bank to

have a larger role in managing the international debt crisis

— which would be akin to appointing Mrs. O'Leary's cow chief

of the Chicago Fire Department.

Mr. Clausen and his predecessor, Robert McNamara, beat the

bushes to encourage more commercial lending to Third World

governments. Now we have a debt problem that is indeed

serious, and foolish American banks are in trouble. But if

the U.S. wants to bail out its banks it should give them the

money directly and not launder the handouts through the World

Bank and Third World governments.

Mr. Clausen's term as bank president expires in mid-1986.

The U.S., as the bank's largest shareholder, has effective

power to appoint a new bank president. One hopes the Reagan

administration will find a replacement, but in the meantime

the funding issue must be addressed.

The bank can sustain a lending level of $13 billion a year

simply by relying on its principal repayment and interest

earnings. Its 1985 lending amounts to $14.4 billion. That's

more than enough to cover good projects to well-managed

countries that do not have access to commercial credit. A

poorer bank would be a wiser bank — and a better friend to

the Third World.

—tagline: Mr. Bovard is a Washington-based freelance journalist.

******

Wall Street Journal

September 23, 1987

World Bank Confidentially Damns Itself

By James Bovard

The World Bank is preparing to ask the U.S. for an

additional $10 billion in cash and guarantees to expand its

lending. The bank claims that it must boost its lending in

order to encourage market-oriented reforms in Third World

countries. But the bank's own confidential reports reveal

that its structural-adjustment program has been a dismal

failure.

World Bank President Barber Conable and other bank

officials are now preaching a private-sector gospel,

stressing that the private sector is the key to economic

growth and a strong future. They are right on this score —

and it is good that someone at the bank finally recognizes

the true source of economic growth.

But every time the bank loudly praises the private sector,

it silently damns its own record. The bank financed and

approved the massive expansion of government power throughout

the Third World. A 1987 World Bank study by Keith Marsden and

Therese Belot implied that World Bank aid and other foreign

aid was a major culprit in the nationalization of African

economies: "Foreign loans have reinforced the heavy public

sector bias of African investments."

The bank's flagship structural-adjustment lending (SAL)

program was launched in 1980 to encourage policy reform. SALs

have allowed the bank to greatly increase its loans in the

1980s.

But, SALs are often used to perpetuate government control

rather to induce pro-market reforms. A 1986 confidential

study surveyed 10 countries that received SALs and concluded

that only two countries substantially reduced their budget

deficits. The report noted that "not infrequently," World

Bank officers were more interested in preparing new loans

than in supervising the structural-adjustment process.

What have SALs gone for? In the Ivory Coast, the SAL was

used to pay the debts of floundering government enterprises.

In Senegal, the SAL bankrolled the budgets of

government-owned agricultural companies. In Pakistan, bank

aid was used to "rationalize" state-owned companies, but

auditors concluded that efficiency had not been increased and

that the companies are still inefficient and losing money.

The 1986 report noted, "Under most of the 15 SALs in the

10 countries, restrictions placed on the use of SAL funds

were minimal." It appears that most of the money was used to

conduct business as usual, thus perpetuating government

waste. The World Bank encourages recipient governments to

spend SALs for export subsidies — which only perpetuates

distortions in the domestic economy.

The bank has a very generous measure of success of its

SALs. The bank officially judged Bolivia "to have complied

with the spirit of the Loan Agreement" in the early 1980s,

though bank auditors disagreed, concluding that the SAL "was

unsuccessful; reforms were minimal and short-lived."

The SALs' timid efforts to require reform are often

defeated because governments can easily acquire foreign aid

elsewhere. The 1986 bank report noted: "The availability of

alternative financial sources, often without strict

conditionality [including other loans from the World Bank],

reduces the need for the bank to provide a SAL. . . . In

Jamaica and Senegal, availability of substantial foreign aid

led governments to decide initially that it was not necessary

to devalue or to substantially reduce budget deficits."

A 1985 confidential bank report by leading development

expert Elliot Berg and consultant Alan Batchelder concluded:

"The SAL's seemingly hard and all-encompassing conditionality

is largely illusory . . . the Bank must shrink from the

ultimate sanction, cancellation. Cessation of disbursements

is too strong a response by the Bank to banal acts of

non-performance. In the one case where it was done (Senegal)

the SAL was replaced by new [World Bank] credits."

SALs often neglect key problems because of World Bank fear

of offending the recipient government. One bank official who

has worked extensively with SALs complained that the Mexican

structural adjustment loan made no mention of imposing limits

on corruption or on capital flight — two of Mexico's biggest

problems. The bank reportedly did not even push Mexico to

install a decent auditing system to control graft.

Yugoslavia received a $275 million structural-adjustment

loan in 1983 to improve "the efficiency and competitiveness

of the economy." But the Yugoslavian economy today is a

shambles, with hyperinflation, high unemployment and

oppressive debt. A 1987 World Bank report concluded that

"real interest rates are still negative, and the intended

reforms related to financial discipline, investment criteria

and foreign exchange and credit allocation are not yet in

place."

Most bank project loans also fail to spur reform. A 1985

bank audit report concluded that, though most recipient

governments promise to make reforms when borrowing bank

money, the promised reforms are rarely made, and that "a

typical reaction by the Bank" to noncompliance has been to

conclude that additional loans are necessary to further

encourage policy reform.

The bank recently gave Jamaica $34 million to reform its

government sugar estates, the latest in a series of loans

since 1978. The bank's press release claimed, "Since the

early 1980s, the government has been implementing a major

rationalization of the state-owned sugar industry as part of

its broader economic adjustment effort in order to make it

financially viable." Yet, a 1985 confidential World Bank

report on Jamaica concluded, "Despite major effort, little

progress has been made at improving management of the

government's sugar estates."

Some foreign-aid advocates imply that a wave of

privatization is sweeping the Third World. But a recent 1987

bank study on privatization "found few instances of formal

liquidations in the 28 countries reviewed. . . . Sales of

large numbers of enterprises are also few, occurring in only

two countries, Chile and Bangladesh."

The bank cannot force governments to reform because the

bank is often more eager to lend than Third World governments

are to borrow. A 1987 bank audit report concluded that some

bank projects suffered from "an unseemly pressure to lend,"

and that Third World governments have been pressured by bank

officers to borrow money for projects that later turned out

to be fiascos.

As more and more countries receive SALs, the bank will

likely be able to find a few success stories. Thailand and

Turkey received SALs after they had begun pro-market reforms.

But the vast majority of SAL recipients continue to have

self-defeating economic policies before, during, and after

their SALs.

As the 1985 Berg-Batchelder study concluded: "Why don't

governments change the policies that are holding back their

development? . . . What has money got to do with all this

anyway? Why do external donors have to pay money to induce

LDC governments to do things that we (and presumably they)

believe will make them better off?"

The vast majority of pro-market reforms do not require

foreign cash to implement. If governments would only respect

the lives and property of their citizens, allow people to

start their own businesses, and roll back bureaucratic

control, then countries could boost their living standards

without boosting their debt load.

If the bank is serious about providing capital only to

countries following productive economic policies, how can it

justify giving a single dollar to Ethiopia? The bank recently

lent Ethiopia $14 million for, among other things,

"institutional development of the Ministry of Agriculture."

But the ministry is heavily involved in the government's

murderous villagization program, whereby the Marxist rulers

are trying to force 33 million peasants (three-quarters of

the population) to move their homes and live in

government-supervised villages. This is economic development?

If the U.S. does pledge an additional $10 billion for the

bank, one of the major beneficiaries could be the Soviet

Union, which is currently seeking access to bank-subsidized

loans. Barber Conable stated last fall that he would be

"happy" to consider Soviet membership, and Undersecretary of

State John Whitehead said in March that the U.S. "would like

to see the Soviet Union become a member of" the World Bank,

the IMF and GATT.

Has the World Bank helped the Third World? Some countries

have benefited — but most of the long-term aid recipients

have ended up with heavy debt loads, swollen public sectors

and overvalued exchange rates. Instead of spurring reform,

most aid has simply allowed governments to perpetuate their

mistakes.

If the bank has not straightened out Third World economic

policies after handing out over a hundred billion dollars,

why should we trust it with more money?

*************

Wall Street Journal

Tuesday, June 21, 1988

World Bank Unit's Lip Service to Private Sector

By James Bovard

Treasury Secretary James Baker lauds the International

Finance Corporation, the private-sector affiliate of the

World Bank, as "the flagship of the private sector in the

Third World." The World Bank is lobbying Congress for an

additional $14 billion U.S. commitment to expand World Bank

lending, and the IFC is seen as a model for what an expanded

World Bank could do. But many, if not most, IFC loans go to

government-controlled enterprises and the IFC has a growing

enthusiasm for investing in Communist countries.

According to Sir William Ryrie, the IFC's chief executive

officer under titular head Barber Conable, "The main

initiative and drive and the bulk of the capital required

[for IFC investments] must come from the private sector."

Yet, the IFC invested $17 million in an automobile plant in

China in 1985 where the only private-sector involvement was a

stake of less than 10% held by Peugeot. Private foreign

investment in China has nosedived in very recent years due to

increased Chinese government restrictions on foreign

investors. Yet, according to Toerstein Stephansen, director

of the IFC's Asian/Pacific branch, "Money is available and we

can, each year, provide up to $100 million in investment to

projects in China."

The largest recipient of IFC loans is Yugoslavia, with

almost $400 million in such aid. Yet Yugoslavia's private

sector has fallen, according to Radio Free Europe, from 27%

of gross national product in 1962 to 5% in 1986.

The IFC has invested heavily in the Yugoslavian banking

system, and thus is likely eventually to show losses from

last year's banking collapse, as well as from the nation's

inflation rate of as much as 200%. (Until recently,

Yugoslavian government controls held interest rates on loans

at rates far below the inflation rate).

Despite the IFC's purported commitment to private

enterprise, it recently invested $3.2 million to help set up

a new government-controlled bank in Hungary to make loans to

state-owned enterprises and cooperatives — and this at a

time when the Hungarian government levied heavy new taxes on

the limited private enterprises that do exist.

The IFC is eager to begin lending to Poland, as a March 24

confidential project analysis sent to the chairman of the

IFC's Investment Committee shows. In it, Douglas Gustafson,

the IFC's director of investment for Europe and the Middle

East, says of a proposed $18 million loan to a Polish fruit

and vegetable cooperative:

"Given the continuing uncertainties about how and when the

IMF may [give aid to Poland,] there is a real danger that the

Polish authorities may become frustrated with the

international financial institutions. IFC has the possibility

to act as a bridge during this interim period, by providing a

relatively small loan and demonstrating the good intent of

the World Bank Group. . . . A fast, early investment by IFC

would have enormous effect on IFC's standing in Poland, would

demonstrate IFC to be a flexible, responsible institution and

would increase the number of investment possibilities in the

pipeline. IFC would achieve a great deal of good will by an

early investment."

The World Bank wants to be loved by its bankrupt Communist

borrowers — and also wants to maximize the "investment

possibilities" for increased World Bank handouts and growth.

Poland has a $40 billion debt that it will never repay — yet

the World Bank is worried about winning Poland's "good will."

To maintain an appearance of private-sector orientation,

IFC loans are prohibited from being guaranteed by

governments. Yet, the Polish loan would be guaranteed by Bank

Handlowy, which is fully owned by the Polish Ministry of

Finance. The IFC skirts this requirement by claiming that

Bank Handlowy is a "commercial bank," and notes in the

project analysis: "This approach is similar to that adopted

in Yugoslavia and Hungary." The investment is justified

partly on the analysis of the borrower's net worth, which the

IFC calculates based on an exchange rate of 175 zlotys to the

dollar — even though the black-market exchange rate in

Poland is roughly 1,300 to the dollar.

Outside of the East Bloc, many IFC projects look like

international versions of Urban Development Action Grants,

funding activities that could occur regardless of IFC

handouts. The IFC chipped in $6 million for a Ramada

Renaissance Hotel in Grenada, $7 million for a Sheraton Hotel

in Fiji, $3.6 million for the expansion of an

Intercontinental Hotel in Kenya. As with UDAGs, projects

often are justified by the number of "jobs created." An IFC

press release claimed that a $28 million IFC-supported P.T.

Bali Holiday Village resort in Indonesia would create "some

300 direct jobs." But, since the average Indonesian

per-capita income is $550, spending almost $90,000 per new

job is not quite a bargain.

IFC loans often simply underwrite partnerships between

multinational corporations and Third World governments. The

IFC lent $9 million to Yemen Hunt Oil Co. in 1985 to build a

refinery, in a project that also received a $20 million

guarantee from the U.S. Overseas Private Investment

Corporation. Hunt Oil Co. has been in partnership with the

Yemen Arab Republic since 1981 — and it is hard to see how

providing an IFC cash injection long after the partnership

began achieved anything.

The IFC claims that 41 of its 92 investments last year

were in companies that were entirely private-sector. Yet,

many of the companies the IFC claims are completely private

have an extensive government role. In Zambia, the IFC says

Zambia Cashew Co. and the Gwembe Valley Development Co. are

completely private, but according to Cecilia Momeka of the

Zambian Embassy in Washington, the government owns 51% of

every corporation in the country. In Togo, the IFC claims

that an $850,000 loan went to a private steel mill, but the

mill actually is owned by the government and leased for 10

years to a private individual. Moreover, as part of the

leasing agreement, Togo promised to keep a 41% tariff on

imported steel.

In Argentina, the IFC claims that loans went to three

totally private entities in Argentina, but the Argentine

government owns stock in all three. In Ghana, the IFC claims

an oil-exploration program it is helping is private, but the

Ghanaian government owns substantial shares in the

corporation. And in China, the IFC claims that China

Investment Co. is completely private-but the company will be

investing in joint projects between the government of China

and foreign investors, which the Chinese government will

largely control. In Zimbabwe, the IFC lent $10 million to udc

Ltd., a Zimbabwean finance organization, for lending to

Zimbabwean businesses. The IFC classifies this project as

strictly private-sector. However, every loan that udc Ltd.

makes must first be approved by Zimbabwe's Ministry of

Industry and Technology or Ministry of Trade and Commerce.

Some IFC loans may actually increase political control

over the economy. The IFC has provided five loans to the

Panafrican Paper Mills in Kenya since 1970. As part of the

Kenyan government's contributions to helping the

public-private entity, it sharply increased tariffs on

imported paper. The results looked good on Panafrican's

balance sheets but clobbered the Kenyan people with higher

paper prices.

The IFC's 1985-89 five-year plan calls for a 7% annual

increase in loan-investment volume, currently at $1.1

billion. To meet its growth targets, the IFC is planning to

increase its investments in South Korea at a time when the

private sector is doing just fine on its own. South Korea has

already attracted a flood of foreign private investment

without the IFC, and the IFC is in Korea largely to boost its

loan and equity investments and to snare easy profits.

The IFC, along with the World Bank in general, is based on

the idea that a handout provides a stronger incentive than

sheer necessity to adopt sound economic policies. Many

economists in recipient countries disagree.

Martin Tardos, director of the Hungarian Academy of

Science's Institute of Economics, notes: "The World Bank

money has made life easier for the Hungarian government and

made it possible to avoid deep market-oriented change. The

World Bank was not setting conditions for real changes and it

accepted the rhetoric for the reality." In Poland, private

citizens have vast dollar reserves saved up in their

mattresses. Yet because they have no security for their

investments, they don't invest in Polish companies, as Jan

Vanous of Planecon Consultants in Washington observes. It is

absurd to inject dollars into a country when its own people

have no faith in the economic system.

The IFC, like the World Bank in general, has failed in its

effort to buy economic reform from Third World and Eastern

European politicians. Necessity is still the best incentive

for sound economic reform. Insofar as the World Bank reduces

the pressure of necessity without securing real reform, it

has betrayed the citizens of the Third World and East Europe.

*****************

The New York Times July 30, 1989, Sunday,

HEADLINE: BUSINESS FORUM: THE WORLD BANK;

Fostering America's Interests Abroad . . . But It Lends to Oppressive Regimes

BYLINE: By JAMES BOVARD; James Bovard is the author of "The Farm Fiasco."

Barber Conable, the former New York Congressman, took over the World Bank in

l986 promising to reorganize and redirect it. But, after three years, little has

changed and the bank, the largest multilateral institution in the world,

continues financing regimes that oppress people and mangle economies.

The New York Times, July 30, 1989

Last September, Congress approved a 4 billion pledge of callable capital to

allow the bank to borrow more money and rapidly increase its lending. Mr.

Conable boasts that the bank committed over $20 billion to the third world and

East Europe in l988, and World Bank officials have already spoken of lending up

to $24 billion in l989.

Unfortunately, the bank is setting new lending records by providing more and

more capital to less and less creditworthy regimes. Eight nations have ceased

repaying World Bank loans, and the bank has set up a special program to give new

money to governments to repay their old loans.

South Korea continues to receive extensive World Bank aid, even though it is

a major industrial power with a huge manufacturing trade surplus. Yet when Mr.

Conable was lobbying for this year's $14 billion American pledge, he denied that

South Korea was receiving any subsidy from the World Bank, because the interest

rate charged on the Koreans' loan was a shade above the bank's borrowing rate.

But all World Bank loans are effectively subsidized by being underwritten by the

United States and other Western governments, and Korea has received loans at

below-market interest rates from the bank.

Mr. Conable also misrepresented the nature of the World Bank's efforts in

Ethiopia. The Ethiopian Government is brutalizing its own people and doing its

The New York Times, July 30, 1989

best to make Idi Amin look like a moderate. The Government has begun a program

to forcibly move three-quarters of the country's poulation into

Government-controlled villages, and last February peasants who resisted the

Government's notorious resettlement program were massacred by the Ethiopian

army. Even so, the World Bank has continued providing a huge amount of aid –

including over $100 million in l988 – to the Ethiopian Government.

During the l980's, the fastest growing part of the bank's portfolio has been

loans to communist governments. Mr. Conable told Congress, "The World Bank has

been instrumental in encouraging communist governments to decentralize and

liberalize their economies and introduce economic market incentives." But in

November l986, an internal review by the World Bank's North African, Middle

Eastern, and European section examined World Bank loans to Hungary, Romania and

Yugoslavia and concluded: "The major problem has been the unwillingness of

these countries to allow bank involvement in policy issues. Projects have been

prepared to meet Five-Year Plan objectives which could not be questioned or

analyzed by the bank." World Bank money has therefore gone to finance the usual

priorities of the communist governments.

The World Bank is priding itself on its structural adjustment program that

allegedly exists to finance market-oriented reforms by recipients. But an August

l988 confidential World Bank analysis of the effects of structural adjustment

The New York Times, July 30, 1989

lending showed that African countries that received adjustment loans are now

doing significantly worse economically than African countries that had not

received such loans. Worldwide, among governments that received structural

adjustment loans, comparing the period before and after receiving the loans, the

World Bank study found that average external debt-export ratios increased from

272 percent to 392 percent, inflation increased in the majority of countries,

and the average ratio of government expenditures to gross domestic product

increased sharply, from 27.0 percent to 30.5 percent. The rise in government

spending was predictable, since structural adjustment loans have been used to

increase tax collection, raise civil service salaries and bail out floundering

state-owned companies. These efforts epitomize the World Bank's concept of

"free market."

Mr. CONABLE declared in l987, "Our common goal should be to restore the

major debtor countries to full creditworthiness within five to seven years." At

times, he talks as if creditworthiness were a mysterious vapor that the bank can

create simply by dispersing more billions to needy governments. Many Latin

American countries are not creditworthy largely because they are not

trustworthy. Much of their problem is that their own citizens, if they can save

a few dollars, send it out of the country as soon as possible before a

politician steals it.

The New York Times, July 30, 1989

The World Bank's "have money, must lend" syndrome will continue to be a

curse to the world's oppressed citizens and a threat to financial stability. Mr.

Conable should retire as soon as possible.