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n a robust and vibrant democracy, debate should not be feared; rather it should be welcomed as a way to sharpen our democratic values as a nation. What Charles wrote about the states of the Nigerian nation was not to cast an aspersion on the person of the Minister of finance and the coordinator of the economy as some people claimed.
First off, I want to say that this is not a political zinger on the person of the Finance and coordinating Minister of the economy of Nigeria. As a person she is likeable and a beautiful woman. Rather, I want to draw a parallel between the World Bank and the Minister, for Nigerians to know their pedigrees. It was an illusion to think that the World Bank as an institution is a place where any country can depend on for any sound economic philosophy: also to think that just because someone had worked at the World Bank would automatically be a superior mind as far economic matters are concerned. The World Bank is a money making machine for the United States and other advanced economy, The World Banks makes roughly over $500 billion yearly from poor borrowers, and in the process plummets these countries into debt and poverty. This amount of money is astronomical!
The World Bank is responsible for 90 per cent of the world's poverty; a fact that is lost on most people.
As a young graduate from the University of Arizona, I met an Asian lady at an Asian restaurant and our conversation swung towards world politics and the World Bank. My knowledge of the World Bank and world politics made her ask if I was a professor to which I answered no. She asked if I was a PHD holder I said no. She asked if I wanted to work at the World Bank and I dithered, knowing what the bank does. This lady was a graduate of the University of Arizona the same as was me and said that she knew a 70 year's old World Bank retiree and wanted to introduce me to. Anyway, the bottom line is that I did not work at the World Bank.
When I got a job I met Sylvia Lau, whon is a German but is a resident in the United States. Sylvia has been a book critique for a while. As I got to know Sylvia, a friendship developed and we started our foreign policy discussions usually at the lunch break room. I told Sylvia that the World Bank is responsible for 90 per cent of the world's poverty and she said to put it at 80 per cent. What is the difference between these two numbers anyway? The bottom line is that the World Bank is responsible for the poverty in this world and someone like Ngozi Okonjo Oweala, is not the economic Czar that we think she is.
Kenneth Kaunda, who was the President of Zambia in the 1960s, said after being told by the World Bank what to do to boost his country's economy and with a failure the World Bank would query him as to what went wrong and he would ask them the same question. The World Bank is known for giving wrong advices to countries about the ways out of their economic doldrums. Malawi for years was hovering on the edge of poverty after a disastrous corn harvest in 2005, putting five millions out of thirteen million people at the mercy of emergency food aid. As always, the World Bank told Malawi to adhere to free market policies and cut back or eliminate fertilizer subsidies. Meanwhile this is not what the United States and Europe do: the governments subsidize fertilizers for their farmers.
Stung by what hunger and the stigma of begging have caused his country, Bingu wa Mutharika, Malawi's newly elected president, decided to follow what the West practiced, not what it preached. Despite cynical reception from Britain and the United States, he went ahead and subsidized fertilizer to farmers because farmers were too poor to afford fertilizers for their crops. By 2007, Malawi pulled itself out of poverty and was feeding its neighbors, like Zimbabwe and even sold more corn to the world Food Program of the United Nation. "As long as I'm president, I don't want to be going to other capitals begging for food," Mr. Mutharika declared. According to the New York Times, The World Bank had asked that Malawi eliminate subsidies entirely on fertilizers in the 1980s and the 1990s. A failed policy that the World Bank came to own up to, but did that stop them from prescribing the same defective economic policy? Malawi's corn output rose from 1.2 million metric tons to 3.4 million metric ton from 2006 to 2007.
I remember a conversation that Ken Saro Wiwa had with a representative of the World Bank. He asked him about the economic advice they had given to Nigeria before his death, and the representative admitted that the policy would not lift any country out of poverty.
In the early 2000, the Government of Ghana had asked that any poultry product bought from outside the country would have to incur import tax and immediately the World Bank swung into action calling the Government of Ghana to drop the idea. The import tax would mean less import from overseas but the plan was dropped. This was to hinder the competitive edge of Ghana's domestic business.
The same policies were at play in Zambia in the 1980s. Between 1983 and 1987, the Worlds Bank and the IMF imposed structural adjustment program on Zambia's loan which stood at $3.2 billion, which as a result Zambia had to make structural changes to her economy. Zambia was required to eliminate price support for corn and fertilizer, devalue their currency, eliminate barriers to import, reducing Government spending by freezing wages for public sector workers and loosen control over interest rate so that investors would be more apt to put money into the economy. When all these policies kicked in, the people of Zambia took to the street on a mass protest and demanded reform, especially for the wage freeze and high tax.
The consequences were ominous in Zambia. Apart from food riot HIV AIDS were difficult to tackle. According to Antonia Juhasz, the author of Bush's Agenda, one British Dr. who attended an HIV AIDS in Lusaka, said "It's no coincidence that the HIV crisis has gone hand in hand with the debt crisis" in Zambia. Zambia's companies could not compete in the international markets because of the tariff reduction and as a result, companies closed down at an alarming rate.
And who would forget the Structural Adjustment Structure (SAP) in Nigeria in the 80s, during the time of Ibrahim Babangida's Government. It was a policy from the Reagan administration by way of the World Bank.
When the Union of Soviet Socialist Republic fell and became Russia, this was in 1991. The following year, Russia was admitted into both the IMF and the World Bank and the Loans started flowing in. From 1992 to 1997 Russian's loan stood at $10.2 billion. Russia was required to carry out reforms which included privatization and restructuring state-owned enterprises, reform financial institution and promote foreign direct investment and the result was a disaster. At the State Department, the policy in Russia was branded a "shock therapy" meaning that Russia's economy experienced too much shock and too little therapy. Russian economy saw a free fall.
Any country that adheres to the economic prescription of the World Bank will fail. During the regime of Obasanjo, a former President of Brazil told him to ignore the World Bank if Nigeria is to succeed. The only country in Asia that stood the South East Asian crisis was Malaysia. There was what is called the Asian crisis caused by the World Bank. Malaysia was the only country that did not take the bait of the World Bank and that was the only country that survived in South East Asia. Before the South East Asian financial crisis, the economy was growing at the rate of 6% to 9% per year before the implosion. When President Jonathan said on the Campaign trial that there is no one who knows about the economy better than the World Bank, what came to mind is that he is ignorant. No doubt, the President has a good intention to salvage the economy of Nigeria but he has asked the wrong person to do that in the person of Dr. Ngozi Oweala Okunjo.
In 2008, when the United States Presidential election campaign was in high gear,the economy was a bust and companies were going out of business: the country was a recession, the two candidates were asked what they would do differently and the Current President said what he would do, and even Allan Greenspan, the former Fed Chairman endorsed him for his economic acuity. When Barack won election he appointed Ben Bernanke the Fed Chair because he had studied the economic movement of the depression of 1929 to 1936. Nigeria is in a deep depression and the only thing that the Government of Nigeria can do is what Franklin D. Roosevelt did as president at the time. Jonathan should have looked at Dr. Ngozi Oweala Okunjo's resume under Obasanjo and he did not. That was something that was not too hard to do given that she was the person in charge of the economy few years before he ascended the throne. It's clear that President Obasanjo's Government did not record any economic growth.
Today, Brazil is an emerging economy with a promising future because they chose to jettison the advice of the World Bank and until Nigeria does that, we would remain in the wood for a long time. Any country that claims to depend on the economic expertise of the World Bank like Nigeria would suffer the consequences. Some countries in South America left the World Bank to form what is called the Bank of the South knowing what the World Bank is up to. It's time to let Dr. Ngozi Oweala Okunjo lose to hike. When she leaves she would look over her shoulder and say that was a "shock therapy" to Nigeria economy.
