For months now, the World
Bank and the government of Bangladesh
have been sparring over a planned Bank loan to help construct a bridge over the
Padma River. The Bank backed out of the
project in June, insisting that it had uncovered evidence of high-level corruption.
Specifically, the Bank alleged that representatives of a major Canadian
engineering firm bribed Bangladeshi officials (Canadian authorities are
reportedly investigating two firm executives).
The Bank's move produced outrage in Bangladesh, which insisted that it
would find other financing.
More quietly, however,
conversations about how to address the Bank's concerns proceeded. The Bank
presented a stiff list of conditions: Bangladesh would have to
suspend all officials suspected of corruption, initiate a special investigation
domestically, and give an international expert panel access to all relevant
information. Last week, the international lender reported that the Bangladeshi
authorities had begun fulfilling these terms:
The
Government of Bangladesh has now begun to address the evidence of corruption
the Bank identified. The World Bank understands that all government employees
and officials alleged to have been involved in corrupt acts in connection with
the project have been put on leave from Government service until an
investigation is completed, and that a full and fair investigation is now
underway.
But even
that apparent bridging of differences has now run into trouble. Speaking in New York earlier this week, Bangladesh's
prime minister insisted that the Bank had
no credible evidence of corruption and suggested that the project was resuming
because the Bank had accused Bangladesh
prematurely. Other officials in Dhaka have
said much the same. Yesterday, the Bank tried to correct the record:
The Bank remains concerned
about corruption in Bangladesh
in general and in the Padma bridge project in particular. It is for this reason
that we have also made it clear that to engage anew in the project will require
new implementation arrangements that give much greater oversight of project
procurement processes to the Bank and co-financiers.
It is only after satisfactory
implementation of all these measures as well as a positive report from the
external panel of internationally recognized experts that the World Bank will
go ahead with the financing of the project.
The people of Bangladesh
deserve a clean bridge. If we are to move ahead, we are insisting that a
credible investigation is undertaken and any project implementation be done in
a manner that ensures transparency and enhanced oversight.
The episode has become one of
the most sustained and direct clashes between the Bank and a national
government over corruption. And Bangladesh
is not just any World Bank client; it has consistently been one of the largest
borrowers in the Bank's program for the poorest countries. The controversy is a
notable reminder of how prominent anti-corruption efforts have become at the
Bank, which for much of its history avoided the subject altogether. This
campaign is popular with the Bank's largest shareholders, but it complicates
lending to the poorest and weakest states, where corruption is often
significant.
The bridge project is also an
interesting test for new Bank president Jim Kim. The initial decision to cancel
funding was taken at the end of Robert Zoellick's tenure. Shortly after taking
office, Kim publicly backed that move, insisting that Bangladesh had
been given multiple opportunities to address the problems. Both the Bank's
funders and borrowers will be watching carefully as the story plays out.
First
published in Foreign Policy magazine, September 27, 2012
David Bosco is a contributing editor at Foreign
Policy and the author of Five
to Rule Them All: the UN Security Council and the Making of the Modern World, a history of the world's most elite club. He is
an assistant professor at American
University's School of International Service and was a senior editor at FP from 2004-2006
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