Monday, 23 April 2007

Occidental tourist

The Occidental Grill
Pennsylvania Avenue
Washington DC



Dear Confidentialers,

Viewed from the reassuringly stolid interior of the Occidental Grill ­ 'Where statesmen dine', it says on the door ­ Washington could be mistaken for a benign provincial city where bow-tied professors and power-suited politicians meet for lunch to engage in a leisurely philosophical joust. In reality, the US capital is in ferment as the confrontation between the Republican Presidency and the Democratic Congress threatens to paralyse the remaining months of the George W. Bush administration.

Whatever the issue ­ funding the Iraq war, the Justice Department and now the World Bank ­ partisans from each side are ready to bombard the other with accusations and innuendo. The next presidential elections are 18 months away and neither party has chosen a candidate yet but that doesn't stop every public issue being pushed through the political meat grinder.

As I was chatting with my companions at the Occidental, a lone student had embarked on a shooting rampage at a local university. Within hours of news breaking about the tragedy, Democratic politicians had started lambasting President Bush's opposition to gun control.

My mission in DC was to cover the less bloody but equally fraught battle for control of the World Bank. Here the villain of the piece is beleaguered World Bank President Paul Wolfowitz, who has admitted to 'making mistakes' by twice promoting his girlfriend, a communications officer with the Bank, and raising her salary.

Wolfowitz, who as Deputy Defence Secretary helped plan the USA's ill-fated war in Iraq, doesn't regard his mistakes as a hanging offence. Understanding that his appointment as President of the Bank while his girlfriend was an employee represented a conflict of interest, Wolfowitz dealt with the matter on his own terms and without consulting the relevant Bank officials.

He is the latest of President Bush's neo-conservative acolytes to suffer a reversal of fortune as Washington's political winds change direction. Wolfowitz's attempt to resolve this conflict by seconding his girlfriend, Shaha Riza, to the State Department, where she was awarded a salary higher than Secretary Condoleezza Rice's, provoked a rebellion among the World Bank staffers.

Neither are the staffers particularly enamoured of the self-confessed Bush administration retreads that Wolfowitz recruited as his enforcers in the Bank. The two, former Spokesman for Vice-President Dick Cheney, Kevin Kellems, and former senior Treasury Department official Robin Cleveland, have a reputation for brusque interventions and for ignoring the views of Bank officials.

Resentments have built up about mega-salaries and special conditions for the advisors. One Bank source tells me that Ms Cleveland insists on driving her Humvee to work and that the staff car park had to be modified to accommodate the gigantic vehicle.

Another Bank source compared the staff's attitude to Wolfowitz, Cleveland and Kellems to the rejection of a transplanted organ by the host. 'It is a 100% rejection,' he said. That was clear from a series of internal meetings in the run-up to the Bank's annual meeting on 14-15 April.

However, the Bank's Executive Board has been much more divided on the Wolfowitz issue. Unsurprisingly, the US Director strongly supported Wolfowitz; more surprisingly they were joined by the African Directors at the bank, who hailed the President's anti-corruption campaign and mobilisation of Bank resources for debt relief and post conflict states such as Liberia. But Wolfowitz has lost the backing of Asian and Latin American Bank shareholders, despite some public expressions of support.

Britain and Germany, the main assassins, have struggled to mount a unified European position on Wolfowitz's dismissal. However the crisis plays out, the Bank will be greatly weakened, particularly as it gears up to raise some US$30 billion in concessional funds to finance its soft-loan affiliate, the International Development Association (IDA), of which about half is to be earmarked for Africa.

The Wolfowitz question comes as doubts grow about the G8's big push for Africa. Last year, overall aid levels to Africa decreased by 5% while the World Bank's own disbursements to Africa were down by about $1bn. A testing time about which I'll have more to say in this week's issue.

I can't end without referring to the Nigerian elections from where I'll be reporting over the next week. Last week's edition of Africa Confidential gave a state-by-state guide to the key gubernatorial contests and analysed how the post-election transition may play out. I'll be talking to some of the key politicians and activists in the Niger Delta this week as well as the generation of national politicians in waiting in Abuja.

We also have a detailed pre-election analysis from Freetown, Sierra Leone, that suggests the electoral contest there may have opened up a little and that some tougher challenges lie ahead from Solomon 'Solo B' Berewa, the Sierra Leone People's Party candidate. Building on those themes, there is an analysis of the successes and failures of post-conflict reconstruction in Africa, a subject of growing interest to the multilateral development institutions. We have reports from Congo-Kinshasa and Guinea, and a banking analyst explains what lies behind the boom in Africa's financial services industry.

Yours in confidence

Thursday, 5 April 2007

Zimbabwe: false dawns and ways forward

BBC Studios
Millbank
London SW1


Dear Confidentialers,

Another day, another interview on Zimbabwe. The BBC's excellent Sheena McDonald is quizzing four of us - two journalists and two opposition activists - about what happens next. President Mugabe's regime isn't about to collapse nor are the military about to mount a putsch, we agreed. So is Zimbabwe at the tipping point?

Perhaps at the start of a tipping point, volunteered Christina Lamb, the Sunday Times journalist who has written a series of undercover reports from Zimbabwe.

The horrendous economic decline in Zimbabwe over the past decade presents a paradox: the general impoverishment has weakened the opposition and the people's will to resist with many of the most qualified people going into exile. Zimbabwe's economy has now shrunk more than those of countries where open civil war has raged - such as Afghanistan, Bosnia, Liberia and Mozambique.

At the same time, the party barons at the top of the ZANU-PF hierarchy are beginning to see their assets threatened. They know that without political change at home, the international economic isolation won't end. Some of their overseas assets have been frozen. For example, the British government has frozen £1 million in an account in a bank in south London in the name of former spymaster and presidential hopeful Emmerson Mnangagwa. It would be interesting to hear Mnangagwa's explanation of how he got the million pounds in the first place.

It's been a rough week for the opposition. First there was the disappointing meeting for the Southern African leaders in Dar-es-Salaam and then the news that ZANU-PF has 'unanimously' backed President Robert Mugabe's nomination as presidential candidate in national elections next March.

None of the possibilities look good back in Zimbabwe. The trades unions' strike call won little support this week. Few people wanted to lose two days of precious pay or, worse still, their jobs. President Mugabe was unfazed: he jetted off to Malaysia to meet his wife Grace in the midst of the strike. His security services were on alert for protest marches in the major towns but had a quieter week than they expected.

After the false dawns of political change, it's more important than ever to look at ways forward to stem the economic and social decline and reopen political dialogue. Everything tried so far has failed but there is a sliver of a chance that could be pulled out of last week's talks among the Southern African leaders in Dar.

They appointed South Africa's Thabo Mbeki to look at mediation between the Mugabe government and the opposition parties. Perhaps South Africa, which has more interests than any other outsider, can nudge Zimbabwe towards a serious meeting of all the parties - the opposition groupings, civic activists and trades unions, the churches, and ZANU-PF - which would resemble the end-of-apartheid negotiations in South Africa in the early 1990s.

The carrot would be a recovery programme to address the health and education crises in the country, backed by the African Development Bank, the World Bank and IMF, the European Union and China and other international agencies. The trigger would be agreement on broad constitutional reform and the holding of credible elections, as well as the Harare government's agreement to take to shackles off the country's brave journalists. Mmm pie in the sky? Perhaps, the worsening crisis needs much more imaginative thinking.

Two Zimbabwean analysts have sketched out just such a programme of reform and resuscitation for the country in the current Africa Confidential. They want the discussions and the planning for change in Zimbabwe to begin now, and believe that such a forum would drive political change much faster. That's in our analysis section. No surprise that Zimbabwe also takes up the cover story this week. We point out that despite the lack of public finger-pointing, Southern African politicians are getting more openly critical of the Zimbabwe regime and the damage its doing to the region.

We also look at the latest twists in the Brett Kebble saga in South Africa and the beneficiaries of his demise. Then to Nairobi for a guided tour of the divided opposition parties who are trying to pull together to trounce President Mwai Kibaki in December's elections. Next door in Uganda, we report on the ruling party's political heavy-handedness despite its efforts to use this year's Commonwealth summit in Kampala to build a better image for the country.

There are also a couple of reports on Angola which this week celebrates five years of peace after the death of rebel leader Jonas Savimbi. Yes, the economic growth has been stratospheric - thanks to the country's galloping oil production. Sadly political developments have not kept track; so the government's authoritarianism and lack of accountability prevent the economic benefits being spread more widely. Nonetheless, Angola is one of Africa's fastest growing powers and one which Africa Confidential will be covering in increasing detail in the run-up to elections due in 2009.

To get the full details on these and other key stories, subscribe to Africa Confidential today - visit www.africa-confidential.com.

Yours confidentially