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“WORLD BANK PLANS MORE LOANS TO IRAN OVER U.S. OBJECTIONS” mentioning the U.S. Dept of State was published in the House of Representatives section on pages H2809-H2810 on May 21, 2002.
The publication is reproduced in full below:
WORLD BANK PLANS MORE LOANS TO IRAN OVER U.S. OBJECTIONS
The SPEAKER pro tempore. Under a previous order of the House, the gentleman from California (Mr. Sherman) is recognized for 5 minutes.
Mr. SHERMAN. Mr. Speaker, where you sit now or stand now, the President of the United States told this Nation right after September 11 that there are those who are with us and those who are with the terrorists. I was not surprised to hear our President indicate that the government of Iran is on the side of the terrorists. Yes, it is true that there is a nominal, though impotent, figurehead reformist posing as President of Iran, but, of course, the real power is exercised by unelected officials who take the most extreme pro-terrorist views. So I was not surprised when our President used the term ``axis of evil'' and included the government of Iran, not the people of Iran who have given us one of the world's great civilizations, but the current unelected real power in the government of Iran.
I was not surprised today when the United States State Department identified the Iranian government as the number one sponsor of terrorism, but there was something that surprised me. I am surprised that we are about to finance those who finance terrorism. Yes, we do not have to comb the mountains of Afghanistan to find Mohammed Omar, because here in Washington down on K Street are those who are ready to finance those in the government of Iran who are the number one sponsors of terrorism.
This entity does not only enjoy the protection of the American government, but surprise further, they are about to receive over 800 million of our tax dollars this year, just as they did in prior years. I refer to the World Bank, an organization that does many worthy projects. Of course, Osama bin Laden built hospitals as well. Now they are about to fund the number one sponsor of terrorism.
Let us reflect that money is fungible. The government in Tehran spends the minimum they have to on domestic affairs in order to secure their power. Whatever is left over goes for nuclear weapons development and to finance terrorism, and to help meet those domestic needs the World Bank financed by our taxpayers.
I want to skip a little ahead in my speech to make sure I identify this point. I am currently working on legislation, and I hope others will join me in drafting it, not as mere cosponsors, but as genuine coauthors, to say to the World Bank: Enough is enough. That if you make further loans to Iran, you will not be allowed to receive any additional monies from the United States and, perhaps further, that if you make additional loans to Iran, we will withdraw the capital that we have already invested. This is because weak protests, a mere vote and voice, virtually guarantees that the World Bank will send over $700 million, $755 million, to be more precise, over the next year to the government in Tehran.
Two years ago when the World Bank proposed a loan, we weakly voted against it. We told them we were against it. We voted all of our shares. It did not matter. And if this House is willing to settle for nothing more than a weak protest, then let us remember that when Iran develops nuclear weapons, they are not going to be smuggling them in to Paris or Rome; those nuclear weapons, scarcely the size of a human being, will be smuggled into Washington or New York or Los Angeles. And those European governments that stood with Tehran and demanded that they get funded will not be the immediate targets of Iranian nuclear terrorism. We will.
So perhaps we need to do more than weakly protest and get outvoted than have tea with the diplomats who are sending our money to Tehran.
Now, we will be told that the World Bank is 5 different entities and we are funding the right hand and the money to Tehran is coming out of the left hand. Let us not be fooled. There is one staff, there is one president, there is one group of directors making one group of decisions, and if we are going to send over $800 million this fiscal year alone in this upcoming appropriations bill, not the supplemental, but the annual, if we are going to send that money to the very people who delight in the financing of the Tehran regime, and we can get outvoted as to how it is spent, a mere change in the bylaws, then even the right hand could send money to Tehran or to Khartoum in Sudan.
Mr. Speaker, let us hope that this Congress has the courage to upset the diplomats at their tea parties and say no money for the World Bank if that World Bank is financing the government in Iran.
[From Dow Jones International News, May 17, 2002]
World Bank, Over US Objections, Plans More Loans To Iran
(By Joseph Rebello)
Washington (Dow Jones).--The World Bank, undeterred by President George W. Bush's condemnation of Iran as part of an
``axis of evil, arming to threaten the peace of the world,'' is pressing ahead with a plan that would provide as much as
$755 million in loans to the country over the next two years.
Since the bank began preparing the plan, Iran has mostly disappointed Western expectations that political reformers would succeed in making it more democratic and liberal. Reformers were silenced, and public executions and public floggings increased last year, according to Human Rights Watch. Iran remained the world's ``most active'' state sponsor of terrorism, according to the U.S. government.
But inside the bank support for more loans to Iran has only grown, officials say. In January, just as Bush identified Iran as a key threat to U.S. security in his State of the Union address, a team of bank directors returned from a visit to Tehran. Its recommendation: ``deeper and faster involvement of the bank'' in Iran, said Jean-Louis Sarbib, the bank's vice president for the Middle East and North Africa.
Staff Expects To Seek Approval For New Loan By Dec.
``We have been quite impressed with the way they have gone about some of their macroeconomic reforms,'' said Sarbib, citing the country's success in building its foreign reserves, in reducing poverty and in ensuring basis education for all Iranian girls. ``What we see on the economic side are people who are really trying to build economic democracy, who are trying to build a market system.''
The bank's staff intends to seek approval for a new loan--worth about $150 million--by the end of the year. That loan is an element of a tentative plan, endorsed last year by the bank's board of directors, that advocates the approval of
$755 million in loans to Iran in fiscal 2002 and 2003. Iran could eventually be eligible for more than $500 million a year, if it continues to satisfy the bank's requirements, officials said.
For the U.S. government, the bank's biggest shareholder, the courtship of Iran has been a lingering source of embarrassment. The U.S. contributes 29% of the bank's capital. It control 16% of the votes cast by the bank's directors--usually a decisive share. It is forbidden by Congress from supporting loans to Iran. But it has been powerless to stop them in recent years.
U.S. Hasn't Been Able to Stop Loans To Iran Recently
Two years ago, the bank's directors ended a seven-year lull in lending to Iran and approved two loans worth $232 million. The U.S. objected strenuously. Madeline Albright, the secretary of state, lobbied leaders of other governments, asking them to oppose the loans because of Iran's human-rights record. She made little headway: the U.S. cast the sole no vote. Canada and France abstained.
James Wolfensohn, the bank's president, told U.S. officials at the time that the loans addressed ``basic human needs'' and were designed to support the reform efforts of Mohammad Khatami, a moderate cleric who had been elected Iranian president in a landslide in 1997. But any future loans, he told the bank's U.S. representative, would be considered only after a ``review of all aspects of the economic and governance programs of his government.''
Iran's performance since then has been mixed. Khatami was reelected to a second four-year term last June. His government briefly warmed toward the U.S. after the terrorist attacks of Sept. 11--it offered, at one point, to rescue U.S. pilots downed in the war in Afghanistan. But Khatami's influence soon faded amid a crackdown by the country's conservative clerics, who control Iran's judiciary and security forces.
``Even after his sweeping election victory in June, when he increased his share of the popular vote, (Khatami) continued to shy away from open confrontation with his opponents and made no discernible progress in implementing his promised reforms,'' Human Rights Watch said in a report in January that warned of ``mounting'' social and economic problems.
``Increasingly . . . he appeared to represent more of a safety valve than an agent of tangible change,'' it said.
The World Bank, however, measures Iran's performance differently. It considers itself apolitical: The bank's mandate, officials say, is simply to reduce poverty and promote sustainable economic development among poorer countries. In deciding to make loans, accordingly, it avoids making official judgments abut the borrower's stance on human rights, terrorism or nuclear weapons. Instead it keeps a close eye on economic and social indicators and the speed with which governments improve those statistics.
By those measures, Iran has performed splendidly. The poverty rate has fallen to 15.5% from 47% in 1978. The infant mortality rate dropped to 26 for every 1,000 births from 47 in 1990. Iran has also built up $17 billion in foreign reserves, partly because of the recent rebound in oil prices and partly because it has paid off much of its debt. It has lowered tariffs, removed most non-tariff trade barriers and unified its system of multiple exchange rates--all well ahead of schedule.
``We are seeing concrete results--in terms of economic and social reforms,'' Sarbib said. Last year, the bank's staff completed the review that Wolfensohn and the bank directors had called for, and advanced a short-term plan calling for the launch of a half-dozen development projects in 2002 and 2003. With the exception of the bank's U.S. representative, all of the bank's 24 directors supported the proposal. The bank's staff plans to present a long-term lending plan to the directors next year.
``The general sense among executive directors is that they are supportive of the bank's engagement with Iran, with the exception of the U.S.,'' said one director who asked not to be named. ``It's difficult to see how the U.S. position could influence other countries. My sense is there is not widespread support for the U.S. position.''
U.S. Lawmaker Criticizes Bank; Says U.S. Lackadaisical
At least one U.S. lawmaker is incensed, saying the loans will merely bolster Iran's repressive leadership. ``Money is fungible,'' said Rep. Brad Sherman, D-Calif. ``The money that the World Bank is providing to Iran's government is not particularly benefiting its people. That government will engage in the minimum domestic expenditures necessary to maintain power. Whatever is left over they'll spend on terrorism and nuclear weapons.''
Sherman said he has been trying to get the Bush administration to take a harder line with World Bank, with little success. ``Nobody's blood pressure is up on this,'' he said. ``The problem is the U.S. bureaucracy. They say, `Oh, gee, we'll vote no. If we get outvoted, que sera sera.' It's as if they hadn't listened to the State of the Union address. It's as if they were unaware of what happened on Sept. 11.''
A Treasury Department spokeswoman, Michele Davis, said the U.S. government has regularly expressed its displeasure with the World Bank's plans for Iran. ``The U.S. opposes World Bank lending to Iran and has consistently communicated this position to Bank management, including in May of 2002, when the World Bank approved two loans to Iran despite U.S. opposition,'' she said.
World Bank officials, meanwhile, said they can see no reason why Iran should be deprived of loans. Sarbib rejects the argument that World Bank loans for humanitarian and development purposes allow Iran to spend its own resources to develop nuclear weapons and promote terrorism. ``Look, they have $17 billion of reserves,'' he says. ``If they want to do all these things, they can do it. They don't need World bank funds to do that kind of stuff.''
Besides, he said, ``Iran is a member in good standing of the World Bank. They are current on all their obligations. As a member in good standing of the cooperative, they are entitled to the services of the cooperative.''
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