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“THE WORLD BANK” mentioning the U.S. Dept of State was published in the Senate section on pages S12530-S12533 on Nov. 13, 1997.
The publication is reproduced in full below:
THE WORLD BANK
Mr. President, the fiscal year 1998 foreign operations conference report contains full funding for the International Development Association [IDA], the concessional lending window of the World Bank. It also fully funds our past commitments to IDA. With this appropriation we will be current, for the first time in several years, in our payments to IDA. This is an important milestone, and I appreciate the support of the chairman of the Appropriations Committee, Senator Stevens, the chairman of the Foreign Operations Subcommittee, Senator McConnell, the chairman of the Budget Committee, Senator Domencici, and others, who also supported this funding, because it reaffirms U.S. leadership at the World Bank and our intention to exert that leadership to promote significant reforms in the institution. As one who played a role in obtaining this funding, I can say with confidence that the Congress is sending two important messages by approving the conference report.
First, we recognize that in order to exert leadership in the multilateral development banks we need to meet our financial commitments. We have been in the ludicrous position of having an American, Jim Wolfensohn, at the helm of the World Bank, but our representative on the Board of Directors has been at the sidelines, unable to even vote on some loans. Why? The U.S. sank so far into arrears to IDA--nearly $1 billion at one point--that some of our voting privileges were revoked. Now, with the passage of this legislation we are paying off the last bit of arrearages, $235 million, plus our current obligations.
Second, we are sending the message that we expect this investment to yield results. We are fortunate that World Bank President Wolfensohn is a dynamic and reform-minded leader who is taking steps to shake up the bureaucracy, get rid of dead wood and demand high standards of performance. His reform plan, the strategic compact, promises development results in 2 years. Frankly, I am concerned that despite his best intentions, the Bank bureaucracy continues to put up fierce resistance and may in the end succeed in thwarting many of his reforms. That is why this reaffirmation of U.S. leadership is so important.
Reform at the World Bank is moving forward, but there is a long way to go. Not all member countries have the same vision for change that we have. I want to take this opportunity to briefly discuss what I believe the Congress needs to see, at a minimum, from the Bank's reform efforts in order to continue to support the institution. We expect the Treasury Department and the U.S. Executive Director to work closely with the Congress to achieve these reforms.
One of the issues that has received increased attention in recent years is the Bank's role in fostering good governance. I think this is critical. While the Bank needs to avoid becoming embroiled in the domestic politics of borrowing countries, when systems are corrupt and on the take the Bank cannot look the other way. When governments are undemocratic, when they abuse human rights, the World Bank as a public institution must not collude. The Bank has made strides in attacking corruption, but stronger action is needed. In addition, the Bank needs to ensure that it is not the handmaiden of borrowing governments that trample on the needs and rights of people in the pursuit of economic prosperity.
A related issue, because of its importance to the quality of Bank lending and borrowing governments' responsibility to their people, is consultation with local people. The Foreign Operations Conference Report calls on the Bank to systematically consult with local communities on the potential impact of loans as part of the normal lending process, and to expand the participation of affected peoples and nongovernmental organizations in decisions on the selection, design and implementation of projects and economic reform programs. This is common sense. It is also vitally important. Private corporations do not launch products or services without market surveys and the knowledge that there is a demand for what they have to offer. Public institutions, like the World Bank, also need to know about the people they are serving. This does not mean just interacting more with affected communities, it means letting them wield influence and responding to their concerns.
The Bank has taken steps in this direction. It is decentralizing and hiring staff for its Resident Missions that are concerned with the well-being of affected communities. We want to know whether the intended beneficiaries of Bank-financed projects want these projects and whether they have a say in designing them. Too often, local people are not involved in a project until the implementation stage, when it is too late to have a real influence. Efforts at headquarters and in the regions need considerably more resources to work with borrowers to reach out to affected communities.
The Bank's loan portfolio has a low level of sustainable projects. Studies show that in recent years, only two-thirds have succeeded during implementation. Only 44 percent have been sustained after completion. Social assessments are now performed on less than ten percent of projects, despite the fact that every project has a social impact. We want the Bank to deliver on the promise of its strategic compact to substantially increase this percentage in 2 years. Over and over again, the Bank's own studies show that projects with good social assessment seldom fail. And we do not want social assessments limited to projects in the social sectors. They are just as essential for lending for structural adjustment, financial sector reform, energy, and industry as they are for education and health loans. In addition, we want these assessments to address the needs of the most vulnerable people. As we all know, powerful interest groups can represent themselves.
It is not enough to do environmental impact assessments [EIA's] and social assessments. They need to be acted on. EIA's are often shelved and do not influence project design. That is a waste of money, it does environmental damage and betrays the people involved.
We would not want the Army Corps of Engineers to ignore these kinds of assessments, and the World Bank should not either.
The World Bank is a bank as well as a development institution. We understand the pressure to keep loan volumes at certain levels. We also understand that to be competitive, the Bank needs to serve its client governments in a timely and efficient way. However, some of the reform efforts are going overboard in this direction. Careful project preparation with quality checks should not be sacrificed on the altar of speed and efficiency. I know Mr. Wolfensohn shares our concerns about this. The Bank needs to provide management with much stronger incentives to maintain quality in the face of pressures for volume and speed.
For participation in Bank-supported lending operations to be meaningful, people need information. In 1992, the Bank adopted an information disclosure policy, largely in response to pressure from Congress. It has made gradual progress in implementing that policy. Much more needs to be done in terms of making the information available in borrowing countries in local languages, and providing information in a timely way at early stages of lending operations. The Project Information Document, which describes plans for operations, is often provided late, incomplete, and only in English.
We want to see progress in providing the full text of Project Concept Documents as well as draft copies of technical papers that assess feasibility, and information from Country Assistance Strategies.
A Country Assistance Strategy is the Bank's master plan for lending to each borrower country, and it describes the Bank's framework for all operations and priority investments. More needs to be done to include social development analyses in the these documents. In addition, the bulk of their contents should be available to the public. Parliaments and citizens have a right to information about the Bank's lending plans. I recognize that some of the Country Assistance Strategy contents are confidential, but the essentials certainly should not be. Nonetheless, Bank management has opposed proposals to release these and other documents containing their projected lending plans. That is unacceptable.
We also need to see greater openness between the World Bank management and the Board of Directors. During late 1996 and 1997, the Bank conducted a substantial review of its portfolio. It reviewed 150 projects in 14 sectors at a cost of $800,000. For reasons that I find inexplicable, some Board members have been unable to obtain these studies.
We do not want our dollars contributing to bloated state bureaucracies and systems in which the private sector is crowded out by state controls. On the other hand, there is obviously a role for governments, as the Bank's most recent World Development Report describes, and for public-private partnerships. The Bank is doing more today to promote such partnerships than it ever has. I welcome that.
But promoting the private sector must not come at the expense of normal precautions about financial, technical, social and environmental risks. Public inducements to investment, such as guarantees against political risks, must not distort the feasibility analyses of project viability. To insure that this does not happen, Mr. Wolfensohn has said he wants to harmonize the World Bank Group's activities under one set of social and environmental policies. At the present time, there are different standards in the World Bank Group. For instance, the International Finance Corp., the Bank's affiliate that deals with the private sector, has lower standards with respect to information disclosure, protection of the environment and of the rights of indigenous peoples.
The answer is not to abolish or weaken sound policies and standards. It is essential that harmonization not result in a retreat from current policies to a lowest common denominator. I am concerned that Bank management is under pressure to do that. Congress helped to create some of these global standards. They need to be respected and built upon by the Bank Group, including the IFC and Multilateral Investment Guarantee Agency. There is language on the IFC in the Foreign Operations Conference Report which aims to make progress in this area.
Currently, the World Bank stresses lending to countries which adopt sound macroeconomic policies. That makes sense, but the Bank should also give priority in lending to governments which listen to their people, involve them in development activities, and demonstrate a commitment to reducing poverty.
The World Bank says its primary purpose is to reduce poverty, but it is falling short in building the political will among member governments to achieve this goal. The rift between rhetoric and reality remains wide. IDA resources must do more than reach poor countries. They must reach and benefit poor and marginalized people in those countries. In 1995, an evaluation showed that just 10 percent of World Bank projects launched in the mid-1980's contained poverty reduction components, and many of those fell short of thier goals.
Surveys of borrower country officials reveal a high level of dissatisfaction with the Bank's lack of focus on poverty and equity issues. Some are even unaware that the Bank's purpose is poverty reduction. The World Bank needs a far more systematic approach to these issues.
Each IDA loan or transaction should describe how it will reduce poverty. As I have consistently urged for years, World Bank investments in nutrition, health, education, and family planning should increase, as should programs which increase poor people's access to productive assets, such as land, water and credit. But according to information I have received, World Bank figures for fiscal year 1997 show that lending for education and health, including nutrition, and AIDS prevention has fallen from roughly $4 billion in 1996 to $2.25 billion in 1997.
The Inspection Panel, which was established in part in response to pressure from Congress, must be maintained and supported. The Panel investigates whether the Bank has violated its own policies. Its investigations have helped the Bank restructure or halt projects, such as dam construction, when they were poorly conceived or implemented. It is one of the few mechanisms that allows local people affected by Bank-
supported projects to identify problems and seek redress. I am concerned that there are people among the Bank's management and its borrower governments who resent the Panel looking over their shoulders. Those individuals need to recognize that they are entrusted with public funds, and are responsible for adhering to their own policies and guidelines. The World Bank needs to be a broker of many interests. Some borrower governments lack the mechanisms to insure that the interests of indigenous people affected by the construction of infrastructure, such as large dams, are represented.
Mr. President, there is one other issue I want to mention. It is the mistreatment of women employees at the Bank. Women have been subjected to gender discrimination, retaliation, abuse of power, and sexual harassment. It is a systemic problem. It has been virtually ignored. In fact, complaints brought by women who allege mistreatment by their managers have been aggressively fought by the Bank's lawyers. That is bad enough. Even worse is that the Bank, because it is an international organization, is immune from lawsuit in U.S. courts. The only recourse for a person who alleges abuse is the Bank's internal grievance process, which, to put it bluntly, is a sham. The deck is stacked against the claimant. Investigations are cursory, at best. Requests to call witnesses are denied. Rulings are based on hearsay, double hearsay, and innuendo. Even if a claimant who has left her job because of the abuse files a grievance and prevails, the remedy is limited to monetary compensation. The process is patently unfair and the people who investigate and adjudicate these cases have failed in their responsibility. There is a culture at the Bank that discourages witnesses to come forward for fear of retribution. It is nothing unusual. We have seen the same thing in the Armed Forces, in private industry, in any bureaucracy, but that is no excuse.
I have tried to get Bank management to deal aggressively with this problem. I get assurances that they are aware of the inadequacies in the grievance process and are taking steps to remedy the situation. So far, I am not impressed. They are not treating this situation with the seriousness it demands. They are too quick to shift the blame to the victim for being ``too aggressive,'' ``not a good listener,'' or ``in over her head,'' even when their own performarnce review process is badly flawed. I intend to monitor this closely because radical change is urgently needed.
Mr. President, I have faith in Jim Wolfensohn to promote these reforms. I know he agrees that they are fundamental to the Bank's future, and of great importance to the Congress. They are especially important because the Bank is a pace setter for other international institutions. Ultimately, the success or failure of this effort will determine whether or not these institutions play the key role we need them to play in advancing political, economic and social stability around the world. Real stability depends on development that gives everyone a chance for prosperity. That is the central purpose of these reforms, and I hope the Bank's management understands how serious this is to the Congress, especially to those in Congress who have fought the hardest to support these institutions.
Mr. President, I often say Senators are merely constitutional impediments to their staffs. But we wouldn't be here if it were not for the staff who worked so very hard. We are privileged by the quality of the men and women who work with and for the U.S. Senate, on both sides of the aisle, and in so many of the other support positions that reflect neither party. So many times we debate these issues until late in the evening, agree on something, Members go home--staff stay until 3, 4, 5 o'clock, or all night long, to get it done.
Robin Cleveland, Senator McConnell's chief of staff for foreign policy, has done a superb job. I am delighted to see her on the floor today. I appreciate the way she has worked so cooperatively with my own staff on this committee, and Will Smith and Billy Piper who have so ably assisted her.
On this side, I have Tim Rieser, who is my chief of staff for foreign policy matters. He has done an extraordinary job on the subcommittee and in working with Members on both sides of the aisle to try to achieve the compromises necessary. He has been ably assisted by Cara Thanassi, who is also a Vermonter, as is Tim. She, too, even though new to the subcommittee, has already shown an excellent grasp of the issues here and has proven very valuable. I also want to recognize Dick D'Amato, of the committee staff, and Jay Kimmitt, whom the chairman has already mentioned. Both gave invaluable advice and support.
fiscal year 1998 department of defense appropriations--federally funded research and development centers
Mr. SPECTER. Mr. President I would like to enter into a colloquy with Senate Appropriations Committee Chairman Ted Stevens concerning Federally Funded Research and Development Centers.
Is it the chairman's understanding that it was the intent of Congress to exempt Federally Funded Research and Development Centers [FFRDC's] from the provisions of section 8041 of the fiscal year 1998 Department of Defense Appropriations Act which reduce funding for advisory and assistant services by $300,000,000? This exemption is necessary because FFRDC funding is specifically reduced by $71,800,000 in section 8035 of the same act.
Mr. STEVENS. The Senator from Pennsylvania is correct. While the Department of Defense chooses to group selected FFRDC's in the category of advisory and assistance services, the Congress has for several years dealt with these issues separately. FFRDC's should be exempt from the reduction in contractor advisory and assistance services.
Mr. JEFFORDS. Mr. President, I compliment the Senior Senator from Vermont, Mr. Leahy, and the Senator from Kentucky, Mr. McConnell for the excellent job they have done in shepherding the Foreign Operations appropriations bill along it's difficult journey. While I would have written some sections differently, I believe that on balance this is a reasonable product of compromise that advances the primary goals of U.S. foreign policy.
I am, however, very disturbed to see that the compromise on U.N. funding that was contained in the State Department authorization bill has now been dropped. While I was not pleased with some aspects of the Helms-Biden compromise, at least it provided a way to start meeting our obligations to the United Nations.
I am disturbed, Mr. President, that greater thought has not been given by those who oppose this provision to the timing of this move. We are teetering on the brink of hostilities with Iraq over Saddam Hussein's refusal to allow entry to American members of the U.N. weapons inspection team. The United Nations has insisted that the integrity of its teams be respected and Saddam Hussein must not be allowed to pick and choose who he lets in. Last week, Secretary General Kofi Annan sent a three-member delegation to Iraq to impress upon Saddam Hussein the necessity of complying with United Nations requirements on access for inspectors. Unfortunately, they came away empty handed. But the United Nations Security Council continues to meet daily in an effort to counteract Iraq's intransigence.
I think most of my colleagues realize that this would be a very inappropriate time to suddenly be forced to go it on our own. We may decide at some point that unilateral action against Iraq is the most appropriate, but that should only come after careful consideration of all policy options available to us. And quite frankly, Mr. President, I believe that some of our best options involve working closely with our allies and our friends in the Arab world to present a united front to Saddam Hussein. With all its warts, the United Nations is still the best mechanism for consulting quickly with all the parties involved and negotiating possible courses of action. This is always a difficult task, but it would be made many times more difficult if we were not able to work through the United Nations. While nothing in the legislation before us today says we must pull out of the United Nations, the refusal of a small number of members to let a broadly agreed-upon package of reforms and arrearage payments move forward is a de-facto renunciation of the United Nations just as we are again turning to that body for assistance in keeping one of the world's worst scofflaws in line.
Getting other nations to join us in these efforts takes carrots and not just sticks. Our diplomats need to bring more to the table than the threat of military retaliation. That should be our last resort, and not before. If we are not willing to put our money where our mouth is at the United Nations, how can we expect Saddam to take our threats seriously?
I know that efforts are underway at this very moment to reverse this unfortunate decision by the House of Representatives. And I hope they succeed. Not just today, but increasingly in the future, we are going to need more tools of diplomacy at our disposal, not fewer. I urge my colleagues in the House to take this into account before it is too late.
The PRESIDING OFFICER. The Senator from Kentucky.
Mr. McCONNELL. Mr. President, I want to make a couple final observations. Seeing the occupant of the chair, the distinguished Senator from Wyoming, I thought I would mention his imprint on this bill. Senator Enzi had an important provision requiring a report from the administration on funding by all Federal agencies on the climate change program. He required its submission by October 31, which is obviously past. The conference included the provision requiring a report by November 15. I would say, for cold State Members, this is very important so we can begin to understand how extensive these programs are and what they are costing the taxpayers.
My thanks to the distinguished Senator from Wyoming, the occupant of the Chair, Senator Enzi, for his support and contribution to this bill as well.
Finally, let me say I understand Christian, the son of our staff director, Robin Cleveland, may be watching because he is sick today. Christian, I hope you get to feeling better. We are all sorry that you were inconvenienced by your mother's long hours during the course of the last few weeks.
Mr. President, I believe we are at a point now where this bill should move forward.
The PRESIDING OFFICER. Do the managers yield back the remaining time on the conference report?
Mr. LEAHY. Mr. President, is the Senator from Vermont correct in understanding when all time is yielded back it is, indeed, passed?
The PRESIDING OFFICER. That is correct.
Mr. LEAHY. I yield back time on this side.
Mr. McCONNELL. Mr. President, I yield whatever remaining time I may have.
The PRESIDING OFFICER. In light of yielding back the remaining time, under the previous order the conference report is agreed to and the motion to reconsider that vote is laid upon the table.
The conference report was agreed to.
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