Asia Times
March 17, 2005
Another Wolf for Russia
By John Helmer

MOSCOW - And the Academy Award for the best fascist dictator goes to
- Adolf Hitler! Woody Allen cracked that joke once at the expense of
the US habit of making awards out of self-congratulation of the
least worthy type. Were anyone to dare in the same spirit, they
might award the new US nominee to head the World Bank, Paul
Wolfowitz, the title of the worst American ever to hold such an
international post.

But wait a minute. Wolfowitz is hardly an American at all, having
spent much of his time as a career Washington warmonger under
investigation by US counter-intelligence and security agencies as
an agent for a foreign power, for whose benefit he is suspected of
supplying intelligence, cash, weapons, and other favors. In US law
books, these may be crimes against the state, possibly espionage,
even treason, but not crimes against humanity, for which Wolfowitz
has encouraged his favorite small state to commit and encouraged
his addled (if not yet treasonous) president to commit in the first
of the great Middle Eastern wars.

For Russia, against whom Wolfowitz has been waging war since he got
out of short pants, the nomination of Wolfowitz as president of the
World Bank presents something of a dilemma, and something of an
opportunity.

Borrow from a war criminal?

During the first post-Soviet decade, the World Bank under James
Wolfensohn was one of the many instruments the United States, as
the World Bank's dominant shareholder, used to destroy the economic
foundations of its rival superpower; pay stipends to Russian
quislings; oblige the Russian government to incur sizable debts for
the privilege of being advised to dismantle its systems of command
and control; and transfer the nation's most valuable resources into
the hands of a dozen individuals eager to betray their country for
personal profit.

Not without reason was Wolfensohn's favorite Russian Victor
Chernomyrdin - the prime minister who enriched himself through
creating Russia's largest company, Gazprom. Wolfensohn was waging
war by other means: Chernomyrdin was his collaborator; and the
Russian treasury paid in full - principal and interest - for its
defeat.

This arrangement couldn't last. And indeed, when the revival of the
feeble Russian state began to challenge the value and terms of the
World Bank's operations in Russia, Wolfensohn decided to commission
an assessment of the effectiveness of the programs he himself had
promoted in Russia. Wolfensohn could have engaged Joseph Stiglitz,
the World Bank's chief economist and Nobel Prize winner. But by the
time Russia had grown skeptical of Wolfensohn, and called a halt to
new borrowings from him, Stiglitz had become a ferocious critic of
everything Wolfensohn had done, or tried to do.

Wolfensohn preferred to hand the assessment job to a minor academic
who had enriched himself selling Russians the very advice
Wolfensohn asked him to evaluate. The hungry fox invited to call
the roll in the henhouse was a US-employed Swede named Anders
Aslund. "We don't necessarily take his advice," commented Julian
Schweitzer, the World Bank's Moscow representative at the time,
about Aslund's appointment. Aslund's defense of everything
Wolfensohn had done in Russia did not encourage the Kremlin to
resume borrowing. Instead, it resolved to pay Wolfensohn off, a
task that the Russian Treasury completed just a few months ago.

 From Wolfensohn's point of view, the evaluation may have helped
salve the wounds Stiglitz had inflicted on him and the institution.
More practically, it encouraged him to try evading the Kremlin's
veto on borrowing, and recruit thin Chernomyrdins in the Russian
provinces - provincial governors, local warlords, and corporate
magnates - as keen to leverage themselves with the World Bank as
the fat Chernomyrdin, and president Boris Yeltsin, had been 10
years before.

With tactics like these, Wolfensohn has hung on for another four
years after the Aslund report, but in Moscow he has remained a
has-been, the banker no one wants to borrow from. Wolfowitz's
nomination - if it is ratified by the World Bank board - ought to
remove any possibility that Russia, now a greater oil power than
Wolfensohn or Wolfowitz have thought possible, would borrow itself,
or recommend that anyone else should.

The dilemma posed by the Wolfowitz nomination turns out to be an
opportunity for President Vladimir Putin to conclude that, from
Russian experience, the World Bank does more damage than good, and
should be isolated and ignored by those countries and economies
most in need of development financing. This should not be
interpreted as anti-Americanism. If the Federal Bureau of
Investigation were permitted to disclose all it knows, Wolfowitz
may not be the American he claims to be. And with a record like
his, it may be a violation of the US statutes to borrow from
Wolfowitz. In US jurisprudence, it is not just immoral to make
covenants with war criminals, it is criminal.
* * *
John Helmer is the doyen of the foreign press corps in Russia. He
first set up his Moscow bureau in 1989, and he specializes in the
coverage of Russian business. US reviews of Western reporting from
Russia have rated him at the top of the profession.