Brazil Congress reviews IFIs

15 September 1998

In August a Commission of the Brazilian Congress held a hearing to examine the multilateral financial institutions. The Commission on Financial Oversight & Control is considering establishing permanent oversight of Brazil’s relations with them, something which no other borrowing government’s Congress or Parliament has done. Until now Congress has struggled even to obtain documents relating to the World Bank’s Brazil program.

Wolfensohn sells shares to defuse conflict of interest

The World Bank is pursuing the eradication of corruption in member countries and, recently begun an investigation into misuse of its own funds. Now it is being suggested that there may have been a conflict of interest in James Wolfensohn’s own finances.

Between 1996 and August this year, Wolfensohn owned 200,000 shares in the Bankers Trust, a company which deals with the World Bank’s short-term deposits, and is involved in its securities and futures trading and currency exchanges. As the World Bank’s activities could significantly influence the creditworthiness of some of the nations that do business with Bankers Trust

Wolfensohn was advised to sell his shares by World Bank General Counsel Ibrahim Shihata, and has now done so.

See Fortune, August 17, 1998.

Bank funds siphoned off?

20 per cent of the Bank’s funding to Indonesia may have been siphoned off in corruption, according to a leaked internal Bank report. A number of NGOs have written to the Bank demanding a proper investigation.

The Bank is considering setting up a committee comprising NGOs and other members of civil society, and increased use of independent audits and public sector reform specialists.

Dams commission rerouted

The World Commission on Dams, established in a process involving the World Bank earlier this year was refused entry into India because of BJP political manoeuvres. Commission members rerouted to Cape Town, South Africa, and will later visit India to assess South Asian dam projects. It comprises government, NGO and company representatives, is reviewing existing dams and the case for future ones.