Compromised World Bankâ??s Diwan Must Resign -NPP-USA

On Wednesday April 14, 2010, Mr. Ishak Diwan found it necessary to use language that is highly uncharacteristic of a serious country director of the World Bank to describe the previous government’s spending in the 2008 fiscal year. According to Mr. Diwan, “the spending was very large. I mean look at Greece these days. Everybody talks about Greece having huge deficits, it’s undermining the whole EU and they have deficit of 9 to 10% of GDP. Ghana had a deficit of 20% of GDP, this is a world record it is reckless.”

This statement is in fact reckless and it shows Mr. Diwan’s apparent lack of understanding of basic economic concepts. It is a usual practice for countries to spend their way out of economic down-turn. The global economic crisis had several countries boosting public spending. As an example, although United States president George W. Bush favored the Laissez-Faires approach to economic policy, and therefore elected not to increase public spending to combat the effects of the economic crisis, his successor Barack Obama increased spending in 2009 resulting in a deficit of almost 11.2 percent of the United States GDP. And that is an economy with certain basic foundations in place.


Furthermore, Ghana’s spending in 2008 can be explained. First and foremost, a needed expenditure of $500 million for crude oil for the Volta River Authority would adversely impact many annual budgets in Africa. With the influx of foreign investment at the time, the amount was justified due to the need to maintain consistent and reliable supply of electricity to businesses that support the economy.


Another justifiable expenditure, which political opponents irresponsibly mischaracterized as unnecessary was the purchase of Air Force planes. Opponents misrepresented the purchase as presidential aircraft, but they were in fact Air Force planes which were critically needed if we as a nation were to maintain our air defenses. Details surrounding the decision to move ahead with the purchase may not be prudently shared with the public for national security reasons. But in a nutshell, given the time table of 72 months from order placement to delivery, and given our need as a nation to maintain our air defense, the purchase had to be made in 2008. Figures associated with other high profile expenditures like the awards for national heroes were too miniscule within the context of national budgets to warrant itemizing.


More importantly, the most curious aspect of Mr. Diwan’s utterances is a clear flouting of the provisions of World Bank Charter, Section 10 of Article IV, which states “The Bank and its officers shall not interfere in the political affairs of any member; nor shall they be influenced in their decisions by the political character of the member or members concerned.” Mr. Diwan himself first wrote a letter earlier in 2009 in which he pegged Ghana’s deficit as a percentage to her GDP at 14.5. Then on World Bank’s own website, its Ghana-at-a-Glance figures put that percentage at 17.4. (http://devdata.worldbank.org/AAG/gha_aag.pdf) Today that percentage has jumped to 20% for the same 2008 year. If this is not playing politics with numbers, then Ghana is not located in Africa.

What is indisputable is that the economic record of the previous NPP administration is enviable by the standards of all except the deceiving NDC and Ishak Diwan. The sustained economic growth that characterized the NPP era, as well as reduced inflation and interest rates, which Dawin could not help but admit, combined with other enviable economic improvements such as a national debt that was more than halved. What’s more, the overall consumer confidence in Ghana at the time NPP left office was at an all-time high.


While we understand, and in fact, have come to expect that bending the truth is second nature to this NDC administration, we find it disappointing that the country director of World Bank would get in the act and twist numbers to gain favors from a sitting administration. In fact the very mission of the World Bank, that is enshrined in Article 1 (ii) of its agreement which states “to promote private foreign investment by means of guarantees or participations in loans and other investments made by private investors….” has been abridged by this NDC administration by its shameful penchant to abrogate international agreements. Yet Mr. Diwan has made not a single statement of protest to this administration. Why then would he find it necessary to reach back and criticize the previous administration on justifiable deficit spending?


We hereby serve notice of our intention to bring Mr. Diwan’s lack of professionalism and misrepresentation of the facts to the attention of his superiors in Washington DC. We also call on Mr. Diwan to own up to his clearly compromised stance by resigning as country director for Ghana. The World Bank is believed to be non-partisan, and Mr. Diwan has grossly flouted that standard.