$1 Billion Salary & Corporate Interest In The World Bank Thwarts War On Poverty In Poor Countries

By J. Yanqui Zaza

The Perspective
Atlanta, Georgia
September 5, 2005


Send Money From Around The World 24/7_1
Come October 2005 elections, could our newly elected core of officers win the war on poverty by reducing corruption? Winning the war on corruption would be a good start. However, they would also have to navigate the influence of Wall Street's chief executives whose yearly salaries have leap from few millions to $1 billion plus during the last three decades (8/5/05, NY Times). Additionally, they would have to review the business interest of the World Bank (WB) and its affiliates created after World War II, apparently to protect the interest of the colonial masters of Africa and Asia.

Besides attaching many strings to loans lent to poor countries, the WB charges high interest rate, as in the case of Nigeria, when it collected $43 billion interest for loaning $5 billion to Nigeria, (8/3/05, ThePerspective Web Site). WB also assists corporations and local leaders in stealing poor countries' funds. (Jeffrey A. Winters at Northwestern University, USA). Mr. Winters added that, in Indonesia, concerned citizens are accusing the WB for criminally aiding and abetting corporations and the former leader, Suharto for stealing $10 billion. Its affiliate, the World Trade Organization, coerces poor countries, by imposing high tariffs, to produce non-profitable goods (i.e., raw material-latex), however, permits developed countries to produce profitable goods (finished products-rubber/tire).

The International Monetary Fund, another affiliate of the WB, continues to redirect limited funds away from investing in schools, health, roads, utility, etc. to investing in luxurious projects, said Mr. Nagire Woods, 1996, Wall Street Journal. Liberia would have trained more vocational students to fight the war on poverty had it built vocational schools rather than building Hotel Africa in Monrovia, Liberia. Further, WB's subsidiaries, NGO’s, are siphoning “donors’ funds” raised for development, (Arundhati Roy, November 2004 edition of Le Monde Diplomate).

Had the WB and its affiliates focused on the war on poverty, and safely kept the "donors' funds" away from NGO's, the Bryant Interim Government may have used the $520 million raised in New York City in 2004 for the intended purposes. Now without electricity, a deterrent to investors, how would our new leaders reduce the high rate of unemployment, an ingredient for frustration and anger? Andrew Rice, the writer of an article, “George Weah’s New Game,” carried by the NY Time Magazine, said that, “Deprivation fuels war, and even now, there are rumors of new armies forming in the bush.” Worst, there are more new weapons for gun-traders to exchange for a promise from a rebel leader. The United Nations’ August 2005 Report states that advanced countries did increase the production of weapons in 2004. So with little funds available to invest on social programs (jobs, jobs, jobs), with former combatants, if partially disarmed, still mobilized, and with abundance of weapons, could our new leaders discourage hungry and underprivileged citizens from being recruited as combatants? Equally true, could our new leaders discourage NGO's from squandering the next “donors’ fund” raised in 2006 or 2007, if donors pledge, if pledged?

Profiteers, or "capitalists are dammed greedy;" said Herbert Hoover, the former president of the United States, when he reminded his countrymen many years ago. I guess greed is part of the reasons why NGO’s are siphoning “donors’ funds” and chief executives such as the likes of Mr. Edward S. Lampert of ESL Investment are demanding $1 billion plus in compensation. Mr. Riva D. Atlas and Ms. Stephanie Strom stated in the NY Times that chief executives managing hedge funds earn between $250 million to $1 billion plus a year. The CEO's $1 billion salary isn't a reward for the efforts in discovering, inventing, creating new ideas, medical vaccine, etc. Rather, they receive the salary for high tech-money gambling. Michael Lewis, the author of "Liar's Poker," a book describing bond traders on Wall Street, coined high tech-money gambling to represent business transactions on Wall Street. Mr. Lewis, a former bond trader and chief executive on Wall also stated “…one bond trader could make millions of dollars with just one telephone call.”

This trend of paying excessive salaries to corporate executives indicates that poor countries are far from winning the war on poverty. This is especially true since chief executives' employers loan money to the WB for its operating capital (i.e., the money it lends to poor countries). It is expected to receive $15 billion (i.e., sell bonds to corporations) from corporation in 2005. (2004 World Bank Treasury). This lending arrangement makes those corporations (employers of chief executives) indirect owners of the World Bank. Besides the financial relationship, Wall Street chief executives maintain a personnel relationship by assigning former Wall Street executives as head of the World Bank.

Chief executives, through lending arrangements with the World Bank, influence economic and political activities of poor countries. Do you remember the phrase "he who pays the piper, calls the tune." In short as profits of corporations, or salaries of officers increase, conversely, conditions deteriorate in poor countries. Chief executives cut cost of corporations, for example, by dumping chemical waste in poor countries, rather than incurring the expense to properly dispose the chemical waste. Or chief executives make more profits by demanding poor countries to invest their surplus/cash reserves or pension funds in specific corporations. Or chief executives make more profits by demanding poor countries to buy substandard goods at prices higher than those prices offered by other competitors.

Wait a minute, why local leaders don't reject the interference of CEO's or experts of the World Bank? That's a good and fair question. But before we delve into finding an answer, what happened to many good leaders who asked why, and, or what for? What happened to Patrice Lumumba of the Congo in the 50's; who planned the April 12, 1980 in Liberia, or who financed the war among the rival warlords in Liberia, etc. Chief executives, for example, focusing on making excessive salaries and high profits, spur anarchy, or sponsor any leader, most likely, dictators in poor countries to follow their dictates.

Wall Street interfering in developing countries started many years ago, according to Mr.Otto H. Kahn, director, American International Corp., and partner, Kuhn, Loeb & Co. Relying on documents obtained from US Congressional Hearings, he informed his listeners of the League/or Industrial Democracy, New York, December 30, 1924 that the Wall Street law firm of Sullivan & Cromwell manipulated the Panama Canal controversy in 1913; the Wall Street New York syndicate intervened in the Chinese revolution in 1912; New York financial institutions financed the Mexico revolution between 1915-1916; etc.

I have no doubt that either of the frontrunners would sincerely work toward fighting corruption. However, the president-elect should encourage the UN to maintain a good number of the peacekeepers in Liberia for at least three more years. He/she should ask the UN to schedule another donor conference in order to raise funds for the restoration of electricity, etc. and creation of jobs. He/she should also undertake a national campaign to mold the mentality of the populace against our high taste for luxurious items and expensive life style. Finally, the new core of officers should be informed and experienced in navigating the economic landmines and economic bubby traps included in concessionary agreements, loans agreements, purchasing arrangements, bilateral commitments, if we are to win the war on poverty.