Corruption and staff morale are key, says Zoellick

22/10/2007 | Lucy Conger

Governors also note growing wealth gap in middle-income countries

Governance and staff morale will be at the top of the World Bank’s agenda, its president Robert Zoellick said yesterday after meeting with its Development Committee. “Governance and anti-corruption runs through everything” and the bank strategy requires combating corruption “to be truly effective,” Zoellick told Emerging Markets.

The bank is working on several fronts to combat corruption, Zoellick said, by promoting “doing business” practices that would eliminate opportunities for graft, developing a working group across regions within the bank, working to recover stolen assets and talking with government ministers about the problem. “Our role is not just to catch corruption, our role is to prevent it. The people who suffer the most are the poor,because they lose out to those with power who can steal,” he told Emerging Markets.

Boosting staff morale is another of challenges Zoellick faces, after his predecessor Paul Wolfowitz was forced to resign in a prolonged scandal about bank hiring and salary practices. Zoellick is acting to energize the staff, he says. “The way to get an institution back on track is to focus on its mission and give people a lot of drive,” Zoellick said. “I’ve been very encouraged by staff response,” he added. The 24-member Development Committee, chaired by Agustin Carstens, finance minister of Mexico, gave Zoellick and the 10,000-strong Bank staff the mandate to concentrate their efforts on poverty reduction and other priorities outlined by Zoellick earlier this weekend.

Some committee members focused on the Bank’s responsibility towards middle income countries (MICs), to which Zoellick has pledged to pay more attention. Brazil’s finance minister Guido Mantega said at a news conference yesterday that economic growth in the MICs is lower than desired.

Concentration of income has intensified in most of 54 countries examined in a new survey. In only a few countries, Brazil included, has income distribution improved, he added, citing World Bank figures. On the other hand, the Bank was criticised by campaigners for failing to address its central goal of reducing poverty. The development committee deliberations offered “no concrete results that will lead to poverty reduction,” Oxfam International said in a statement yesterday.

Oxfam commended recapitalization of the International Development Association by Bank donors, but urged that donor countries should “use their money to leverage meaningful reform”. The Bank must stop attaching loan conditions that push for privatization and liberalisation, Oxfam urged.

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