A clearly perturbed Secretary of State Hillary Clinton
angrily denied that she was seeking the top spot at the World Bank this weekend
as rumors flew that she plans to resign in 2012 and do just that. One Clinton
spokesperson less charitably called the rumor “grade A BS.”

But the rumor of Clinton as World Bank president cast yet
another glare on the World Bank’s policies in developing nations. Those policies
have been roundly and justifiably criticized for wreaking havoc on the
economies of poor nations.

The Bank is and has been for the nearly seventy years of its
existence run exclusively by European and especially American bankers and
politicians. The U.S. President nominates the World Bank president. In theory
the nominee must be approved by the other member countries. But this is a
rubber stamp procedure. Whoever the U.S. president chooses will be the Bank
president.

The U.S. domination of World Bank policies is assured by the
nearly 20 percent of the shares that it owns in the Bank. The World Bank
leadership has through its entire Post World War II existence been not only a
tight knit European and American club, but a rigidly male club.  With one exception every one of the
past 11 World Bank presidents has been American. In addition, every one of them
has been male.

If Obama had nominated Clinton to run the World Bank and she
had accepted, she would have been the first female president of the Bank.

The U.S.’s control of the Bank, gender notwithstanding,
strikes at the heart of how decisions are made by the Bank and how they affect
poor nations that are in dire need of capital and technical assistance and must
come hat-in-hand seeking that aid from the Bank.

The standard method of operation of the World Bank in
“aiding” distressed developing countries has been well-documented. It
dispenses development aid, technical assistance, and loans to needy countries
but the price for the cash and assistance is steep. The Bank demands that the
nations get their fiscal house in order and that means toeing the rigid free
market line that the donor governments, Western banks, private capital markets,
and other international organizations demand.

That requires wholesale slashes in public spending, the
loosening or scrapping entirely of labor and environmental controls and
regulations, cutbacks in public health care services, and dumping price
controls and subsidies on food.

During the 1990s, the World Bank tightened standards even
more for aid to developing nations. The requirement for distressed nations to
get the cash was deregulation, liberalization of markets, privatization and the
downscaling of government. This had an even deeper ruinous effect on the
nations. It further depressed wages, increased employment, stunted
manufacturing growth, escalated prices, and retarded development projects.

The World Bank’s draconian lending policies and requirements
and heavy handed political domination came under especially bitter criticism in
sub-Saharan African countries following the first major global energy crisis in
1979. The Bank forced the borrowing nations to drastically cut government
spending on health, education and public services under the guise of curbing
corruption, waste and promoting good fiscal management. 

The restrictions were supposed to further the expansion of
labor intensive manufacturing enterprises, infrastructure development, and
inflation reduction. Just the opposite happened. Inflation skyrocketed, food
shortages increased, price controls and subsidies on food were scrapped, and
labor regulations were watered down or eliminated.

Poverty in the nations worsened.

World Bank officials have repeatedly heard the drumbeat
criticisms of their policies. In an effort to placate critics, they devised the
Poverty Reduction Strategy Paper. This supposedly was a blueprint to reduce the
flaws in the structural adjustment policies that widened the economic
disparities between rich and poor countries. It didn’t. The Bank continued to
impose the same austerity requirements for getting loans and technical aid on
debtor nations. This reinforced the age old subservient role that poor nations
have played to the World Bank.

Clinton, for her part, was sanguine about the Bank and its
importance, “It’s a very important institution, and obviously we want to
see the World Bank well led.” But leadership still means keeping the World
Bank firmly under the thumb of the U.S.

But whether Clinton is at the helm, or someone else is — Brazil,
Mexico, China and India have called for it to be led by a non-European and
non-American — that wouldn’t change the one troubling fact that World Bank
policies have done more harm than good for poor nations and their people.

Earl Ofari Hutchinson is an author and political analyst. He
is an associate editor of New America Media. He is host of the weekly
Hutchinson Report Newsmaker Hour on KTYM Radio Los Angeles streamed on ktym.com
podcast on blogtalkradio.com and internet TV broadcast on thehutchinsonreportnews.com.
Follow Earl Ofari Hutchinson on Twitter: //twitter.com/earlhutchinson