March 25, 2005 | Page 12

ELIZABETH SCHULTE looks at the record of the man George Bush wants to head the World Bank.

ONE OF Washington's most notorious hawks will soon be able to add loan shark to his resume. On March 16, George W. Bush announced that he was nominating Paul Wolfowitz--the current deputy defense secretary and one of the architects of the U.S. war on Iraq--as the new head of the World Bank.

Wolfowitz's qualifications? According to Bush, "He helped manage a large organization. The World Bank's a large organization; the Pentagon's a large organization."

Elsewhere, the response to Wolfowitz's nomination was less enthusiastic. When his name was quietly circulated among European directors of the Bank a few weeks ago, he was rejected. "Mr. Wolfowitz's nomination today tells us the U.S. couldn't care less what the rest of the world thinks," one source told Reuters.

As one of the main authors of the Bush administration's 2002 National Security Strategy--known as the "Bush Doctrine"--Wolfowitz pushed for pre-emptive war against Iraq. He helped propagate the lies about Saddam Hussein's non-existent weapons capabilities and his regime's supposed ties to the September 11 hijackers.

In 2003, Wolfowitz admitted to Vanity Fair magazine's Sam Tannenbaus, "The truth is that for reasons that have a lot to do with the U.S. government bureaucracy itself, we settled on the one issue that everyone would agree on, which was weapons of mass destruction as the core reason, but--hold on for one second--" That's when Wolfowitz's handler made him stop talking.

Wolfowitz was also a booster of the idea that U.S. soldiers would be greeted by grateful Iraqis--and that convicted embezzler Ahmad Chalabi would make a fine new leader of Iraq.

Before he was writing foreign policy for Bush Jr., Wolfowitz worked for Bush Sr.--as undersecretary of defense for policy, under then-Defense Secretary Dick Cheney. In 1992, a draft of his "Defense Planning Guidance" was leaked to the New York Times. In it, Wolfowitz called for pre-emptive strikes against "rogue states" seeking weapons of mass destruction; preventing the emergence of any potential competing regional or global power; and "constant" U.S. military intervention to preserve global peace.

Bush Sr.'s administration had to repudiate Wolfowitz's hawkish arguments. Today, they're policy.

Wolfowitz chairs the neocon Project for a New American Century today, but before that, he was a member of the Committee on the Present Danger, a grouping of Cold Warriors who warned that the CIA was underestimating the threat of the former USSR.

During the Reagan administration, he was director of policy planning for the State Department--and later assistant secretary of state for East Asian and Pacific affairs. Appointed U.S. ambassador to Indonesia in 1986, Wolfowitz bolstered Washington's relationship with the dictator Gen. Suharto.

After leaving his ambassadors' post, Wolfowitz kept up his involvement in Indonesian affairs via his membership in the U.S.-Indonesia Society, a group of U.S. companies that promoted trade with the Suharto dictatorship. The society tried to sell the idea that Suharto was carrying out an "economic miracle" in Indonesia, producing many reports on the subject and organizing congressional tours.

As late as late as May 1997--shortly before the dictator was overthrown by a massive rebellion--Wolfowitz told Congress that "any balanced judgment of the situation in Indonesia today, including the very important and sensitive issue of human rights, needs to take account of the significant progress that Indonesia has already made, and needs to acknowledge that much of this progress has to be credited to the strong and remarkable leadership of President Suharto."

After Suharto was kicked out, U.S. officials would condemn Indonesia's corrupt crony capitalism. But Wolfowitz has never let corruption get in his way. The Pentagon--where he has been employed for a large part of his adult life--is rife with it.

The General Accounting Office reported earlier this year that the Pentagon operates eight of the 25 worst-run government programs, with billions of dollars of waste each year due to mismanagement. According to the Transparency International, an organization based in Berlin that monitors government corruption around the world, U.S. management of contracts in occupied Iraq could become "the biggest corruption scandal in history."

Despite international opposition to Wolfowitz's nomination, his appointment is all but assured. As the country with the largest number of votes on the 24-member board of the World Bank, the U.S. can pretty much pick the president.

"The world would view a Bank directed by Mr. Wolfowitz as no more than an instrument of U.S. power and U.S. priorities," warned an editorial in Britain's Financial Times newspaper. But this has been the case since the Bank's beginnings after the Second World War, when it was first promoted, along with its sister organization, the International Monetary Fund (IMF), to guarantee loans to rebuild Europe.

Since then, the World Bank and IMF have been in charge of granting loans to poor, developing nations--but with strings attached. In exchange for loans, the Bank demands free-market economic policies in debtor nations, including privatization, cuts in social services and opening up their markets to foreign investment. In Indonesia, IMF policies in exchange for loans after the Asian economic crisis in the late 1990s translated into a rise in the official poverty rate from 11 percent to between 40 and 60 percent.

That's why, from the Bush administration's point of view, Wolfowitz is the perfect choice as World Bank president. His experience wielding U.S. military power around the world will serves him well in his new job--imposing Washington's economic might on the world's poor.

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