Magazine article The Nation

Gilding the World Bank

Magazine article The Nation

Gilding the World Bank

Article excerpt

The World Bank, ever a stern taskmaster when dealing with its Third World clients, demands cuts in government spending, consumer subsidies, social programs and other "frills" that get in the way of debt payments to international creditors. Countries that fail to meet economic targets set by the bank's "structural readjustment programs" are deemed economic pariahs and swiftly cut off from international financial markets.

The bank is not nearly as austere at home. The compensation package for its president is $305,000 a year, while the top seventy-four officers average in excess of $120,000. Employee perks include a free in-house health club and complimentary travel home for vacations. Michael Irwin, a former personnel manager, describes bank staffers as "living and working comfortably in the Washington area, and venturing forth in luxury.. tout of touch with both the realities and causes of poverty in the Third World."

When investment banker James Wolfensohn took charge of the bank in late 1995, he promised to hack pitilessly at excess spending. It appears, however, that the structural readjustment is lagging. The bank is currently completing a $314 million renovation of its offices, running more than $100 million above the original estimate. This boondoggle began before Wolfensohn arrived, but some of the more vulgar excesses, as I have recently learned, have been carried out during his tenure and indeed continue.

So far, the bank has been adept at damage-control. Bank flacks recently led a credulous WashiNgton Post reporter, Benjamin Forgey, on what was apparently a Potemkin Village-style tour of the new headquarters. In a glowing review on February 8, Forgey wrote, "Money certainly wasn't wasted on materials, for though the building looks sharp, it doesn't look extravagant.... In any case, thank goodness, there's no excessive display of wealth in the form of lavish marbles, rare woods and such."

Forgey missed the gold leaf on the ceiling of the thirteenth floor, in the opulent entryway to a new executive boardroom, in the boardroom itself and on a wall of the executive dining room. An enormous ceiling in the lobby leading to the atrium, the building's centerpiece, gleams with aluminum leaf.

Though it sounds modest, aluminum leafing is almost as expensive as gold because both procedures involve high-cost labor. According to a source at the bank, the aluminum leafing near the atrium was applied over a period of several months by a crew of about six workers. "The bank's inability to control costs at its own headquarters has to make you wonder about the quality of the economic advice it offers the Third World," Bruce Rich, author of Mortgaging the Earth, a critical history of the bank, said of the gold-plated remodeling.

I described the leafing at the bank to Stanley Robertson of the Washington, D.C.--based Chelsea Lane Conservation Studio. He said that a low-end estimate of $1 million provided to me by a source at the bank sounded about right. …

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