Wednesday, September 20, 2006

Tale of Two Meetings, U.N. & IMF-World Bank

At the United Nations the talk is peace as a necessity to avoid outright global conflict. A Nobel Peace Prize recipient had this to say:

As speaker after speaker expressed concern about the rise of terrorism in the world, Costa Rican President Oscar Arias, a Nobel Peace Prize winner, warned that military spending was not the answer. He said that more than $200 billion had been added to global military spending since the Sept. 11 attacks five years ago. "There is not a single indicator that suggests that this colossal increase is making the world more secure and human rights more widely enjoyed," he said. "On the contrary, we feel more and more vulnerable and fragile."

Meanwhile across the globe the IMF-World Bank meeting ended with consensus on the need to revive global trade talks and reduce risks to global growth. The well known hawk leader of the World Bank, Paul Wolfowitz came under fire during the meeting for holding back over $1 billion in aid to countries believed to be involved in illegal activities or projects suspected of graft. That leaves out the U.S. Congress and most Halliburton contracted projects!

Wolfowitz acknowledged during the conference that the poor should not be penalized for the abuses of their leaders. "We must seize the moment to cater for the poorest of the world," he said in closing remarks on Wednesday. The World Bank urged the international community to step up aid to Africa, where it says 1 billion people live on less than US$1 a day, almost a third of them in sub-Saharan Africa. In particular, it highlighted the needs of Sierra Leone, Liberia and other countries that have recently emerged from crisis.

Recently several African countries indicated they would spend more of their national budget for military purposes. Does anyone else find it interesting the World Bank would be silent on such a shift? What corporate directorships might Mr.Wolfowitz have that influences his thinking? Ex-Defense Department officials are scattered across the boards of numerous defense contractors.

Now that Paul is working for a bank, might money movers be interested in his governance capabilities? He served on the Board of Hasbro after directing eleven mutual funds of the Dreyfus Corporation earlier in his career. While a toy company can be discounted, the people he served with have an interesting background. A Vice Chairman of Kissinger Associates, a Vice Chair of Bear Stearns and even the Chair of the American Jewish Distribution Committee served alongside Paul at Hasbro. The long list of interlocking directorships is clear from this one proxy.

As the Defense Department’s Deputy Secretary Paul facilitated the sale of U.S. corporate military goods and services to Taiwan via the US-Taiwan Business Council. He worked alongside his buddy, now Chairman Emeritus of The Carlyle Group Frank Carlucci.

While world leaders decry the spread of military spending post 9-11, the world’s financing organization for underdeveloped countries is silent on the matter. Anyone wonder why?

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