links for 2007-04-26
Federal Reserve Bank of San Francisco Lunchtime Seminar: Emmanuel Saez

Why Hasn't Paul Wolfowitz Been Fired?

Krishna Guha reports: / World - Wolfowitz deputy under fire over climate : One of Paul Wolfowitz’s two handpicked deputies, Juan José Daboub, tried to water down references to climate change in one of the World Bank’s main environmental strategy papers, the bank’s chief scientist has told the Financial Times. Mr Daboub, a conservative former finance minister from El Salvador was brought into the bank by Mr Wolfowitz. He is already under fire for allegedly trying to remove references to family planning in the bank’s Madagascar country assistance strategy and reduce its prominence in its new health sector strategy.

The new claim will add to disarray at the highest ranks of the bank, which is in ­turmoil over revelations that Mr Wolfowitz personally arranged a large pay rise for his girlfriend as part of a secondment deal. Graeme Wheeler, Mr Wolfowitz’s other deputy, told the bank president to resign at a management meeting last week. Robert Watson, the chief scientist, said Mr Daboub tried to dilute references to climate change in the Clean Energy Investment Framework, a key strategy paper presented to the bank’s shareholder governments at its annual meeting in Singapore last September. “He tried to water it down. He tried to take out references to climate change,” Mr Watson said. Two other officials confirmed this account. The chief scientist said Mr Daboub, who oversees the sustainable development division, tried to remove some references to climate change completely and, in other cases, replace them with the phrases “climate risk” and “climate variability”, which convey greater uncertainty over the human impact on climate. Mr Watson said: “My inference was that the words ­‘climate change’ to him implied human-induced ­climate change and he still thought it was a theory and was not proved yet.”

He said that went completely against bank policy. “We have always felt that climate change is a very serious environmental issue and very serious development issue,” he said. Mr Watson, is one of the world’s leading climate change scientists, having been a top official at the National Aeronautics and Space Administration (Nasa), an adviser to former President Bill Clinton, and the chairman of the Intergovern­mental Panel on Climate Change from 1997 to 2002. Mr Watson said he and other managers in his division “pushed back” and insisted on some references to climate change in the paper. He said Mr Daboub conceded sufficiently to make the strategy paper credible. “There was clearly less reference to climate change than there would have been, but it did not matter,” Mr Watson said.

The chief scientist said the attempt to dilute references to climate change “came from Daboub’s office and from Daboub himself”. He said he believed Mr Wolfowitz knew nothing about it. Mr Daboub told the Financial Times that the bank’s staff “deserve recognition for their work, which includes trying to meet the concerns of a diverse range of stake­holders”. “I personally believe that climate change is a serious issue and I am pleased that the bank is playing an active role in addressing it.”

The allegation follows Mr Daboub’s response to reports – supported by staff testimony – that he had also tried to dilute references to family planning in bank ­documents. Mr Daboub has written to other managers insisting these claims are untrue, stating: “I am here to carry out the bank’s policies, not my own.”“Regarding the Madagascar CAS [country assistance strategy], none of the editorial changes that were made at my direction changed, or intended to change, the Bank Group’s programme in the area of family planning,” he wrote.

However, on April 19, directors representing European shareholder governments sent a memorandum to Joy Phumaphi, the newly arrived vice-president for human development, saying that they had “major concerns” about the health strategy submitted to them after editing by Mr Daboub’s office. The document “makes virtually no reference to sexual and reproductive health on a strategic level”, the directors said. “This is surprising, considering that the bank has committed almost $2bn (€1.5bn, £1bn) to sexual and reproductive health over the past 10 years.” Ms Phumaphi apparently took these concerns seriously and has submitted a new draft with more extensive references to family planning to the board. This version was considered by the board on Tuesday but serious divisions over language remained between the US and several European countries.

Separately, Mr Wolfowitz on Tuesday wrote to World Bank staff reiterating his commitment to make “major changes in the way my office and senior management team work”, in an attempt to counter calls for his resignation.