Friday, July 01, 2005
Trusting the corrupt
I was browsing through a copy of the Asian Wall Street Journal on a flight yesterday (June 30th), when I came across an interesting piece on how the World Bank intends to relax several of its specificiations regarding project procurement in Asia. Since I haven't been able to find a copy of this article online, I'll try to describe it as best as I can.
Traditionally the World Bank has followed strict procedures regarding selection of contractors for their projects in developing countries. Their strict anti-corruption policies and close monitoring of the entire process, frequently disqualifies some local organizations from bidding on large projects. Now, the Bank wants to use a 'hands-off' approach in certain select countries in Asia - including India and China - and let these countries have a free hand in procuring services for Bank-funded projects. Of course countries need to prove that they are 'cleaning up their act' to get on this select list.
The pros are that this will encourage countries to proactively combat internal corruption and raise the standards of the services that they can provide. As you can imagine, the countries on this list are in favor of this move. However, organizations such as Transparency International as well as contractors from developed nations that have traditionally performed work for the bank are rather livid. They claim that this will allow corrupt practices within countries to run rampant, decrease transparency and visibility, and reduce competitiveness leading to raised prices and lower quality.
I personally think that less regulation is a good thing in many cases, and that this is a welcome (although a-typical) suggestion from the Bank.
Traditionally the World Bank has followed strict procedures regarding selection of contractors for their projects in developing countries. Their strict anti-corruption policies and close monitoring of the entire process, frequently disqualifies some local organizations from bidding on large projects. Now, the Bank wants to use a 'hands-off' approach in certain select countries in Asia - including India and China - and let these countries have a free hand in procuring services for Bank-funded projects. Of course countries need to prove that they are 'cleaning up their act' to get on this select list.
The pros are that this will encourage countries to proactively combat internal corruption and raise the standards of the services that they can provide. As you can imagine, the countries on this list are in favor of this move. However, organizations such as Transparency International as well as contractors from developed nations that have traditionally performed work for the bank are rather livid. They claim that this will allow corrupt practices within countries to run rampant, decrease transparency and visibility, and reduce competitiveness leading to raised prices and lower quality.
I personally think that less regulation is a good thing in many cases, and that this is a welcome (although a-typical) suggestion from the Bank.
