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Albania News:

World Bank Probe “Damaged” Albania Relations


Posted on Friday, February 27 @ 14:39:50 PST by classiclady

Albania News
    Read inside:
  • Guilty as charged


  • Albania’s Minister of Finance accused the World Bank on Friday of damaging their excellent relations with a probe by an independent investigative panel on a coastal management project that has embarrassed
    Argita and Jamarber Malltezi
    the conservative government of Prime Minister Sali Berisha.

    By Gjergj Erebara

    “We regret to note that Bank’s internal issues are being transposed as problems of the Bank with the Albanian government,” Minister of Finance Ridvan Bode told a press conference.

    “This is not in the interest of the Government and would be damaging at this stage of our excellent cooperation and joint efforts,” Bode added.

    The World Bank chief of mission in Albania, Camille Nuamah, on Wednesday presented the bank’s report on the controversial demolition of a village in southern Albania, which blames the government in Tirana as well as the project coordinator, Berisha's the son-in-law .

    According to the management report, which Nuamah read out loud during the press conference, the demolition of the village was not mandated by the World Bank but by the project coordinator, Jamarber Malltezi, who notified the Bank of his communication with Albanian authorities only after the demolition process started.

    An inspection report by the International Development Association, IDA, published by Balkan Insight on January 31, revealed that a project on coastal zones management had contributed to the demolition of several informal settlements in the village of Jale, contravening the bank’s policies on forced displacement. Coordinator Malltezi , Berisha's son-in-law, was attacked by local media for his role but has denied all accusations of misconduct.

    “The appointment of the Prime Minister’s [Sali Berisha] son in law as the Project Coordinator was an unhealthy decision,” said the management report, due to concerns about conflict of interest, which were overlooked.

    The World Bank management report acknowledges serious errors in project preparation and supervision, along with errors in communication.



    “From basic project management to interactions with the Board and the Inspection Panel, the Bank’s record with this project is appalling,” said World Bank Group President Robert B. Zoellick during a meeting of the board of governors on February 17.

    Zoellick has requested the Bank’s Acting General Counsel investigate matters, and has separately referred matters to the Bank’s Department of Institutional Integrity.

    “We take very seriously the concerns raised by the Inspection Panel and we are moving promptly to strengthen oversight, improve procedures, and help the families who had their buildings demolished. The Bank cannot let this happen again.”

    Albanian Prime Minister Sali Berisha has attacked the World Bank inspection panel as corrupt and tied to an unnamed Albanian construction mafia, arguing that the bank ordered the demolitions and the management report would clear his government’s name.

    “The inspection panel has been corrupted on its Albanian side… they put some money in its pockets,” said Berisha in a press conference.

    “The inspection panel was in collusion with the construction mafia,” he added, asking the bank to investigate the panel.

    Neumah would not comment on Berisha’s allegations, but defended the investigative panel.

    “We do not comment publicly on such declarations”, - Neumah said, adding that “the panel is independent”.

    Management also unveiled an Action Plan for the demolished area, notably a series of measures to be undertaken with support from the Bank, including a case-by-case legal review of the April 2007 demolitions in the project area, the appointment of an ondependent observer to monitor the legal review and report back to the Bank, and the payment of legal aid for the review of each of the claimants' cases.

    Bank management will also supervise the completion of a social and vulnerability assessment, and the retroactive application of an assistance packages for those affected by the demolitions.

    The investigation by the inspection panel found that World Bank management failed to comply with its policies with respect to the design, appraisal and implementation of the project, harming the local people affected by it. The probe also found that WB assisted the demolition by pressuring local construction police to take action and by supplying them with equipment and aerial photos.

    In addition to the project's failure to comply with World Bank policies, the investigators noted allegations of corruption and complaints that the demolition of the Jale settlements was part of a bigger scheme to develop the area as a tourist resort. While the panel does not evaluate these allegations, it concludes that the selective demolition carried out by construction police supports the intention to clear the area.

    The investigative panel also accused World Bank management of misrepresenting facts during the probe and hampering the investigation by withholding access to data, while it notes the unusual lack of recollection of facts and crucial events by staff. Investigators say that several WB staff members both in headquarters and on the field were “coached” to provide unusually consistent but factually incorrect or misleading information.

    Guilty as charged

    A flawed project in Albania has highlighted some broader concerns

    WHEN Robert Zoellick took over the World Bank in 2007—after months of bitter wrangling over professional favours done by its former president, Paul Wolfowitz, for his girlfriend—many people hoped that happier times lay head for the institution. So it was a shock to hear Mr Zoellick describe as “appalling” the bank’s behaviour over a bungled project to develop the coast of Albania. He was responding to the findings of a bank-appointed panel which found a clear link between the wrongful demolition of 16 homes in the coastal town of Jale and the project, to which the bank had pledged $17.5m.

    Mr Zoellick’s frank mea culpa sounded impressive, and the project has been suspended. The bank management’s response, in a document dated February 18th, is also contrite. And legal aid to the families affected, to help them seek compensation, has been promised.

    But investigations have uncovered a sorry tale of incompetence, mismanagement, obfuscation and possibly worse. And they come barely a month after the bank was forced to issue a statement belatedly identifying three IT firms that had been debarred from bank projects—two of them, Wipro and Satyam, for providing “improper benefits” to bank staff. The imbroglio provides fresh fodder to critics of the bank who argue that it is slow, opaque in its decision-making and not sufficiently accountable to people its work affects.

    In the Albanian project, this is one of the embarrassing things: an appraisal document included
    a crucial reference to an agreement with the government about a moratorium on the demolition of unauthorised buildings—until clear rules could be set for defining illegal activity and assisting those who were affected. In reality, no such agreement existed, something that at least some staff knew. Corrections to the document were made shortly before the project was presented to the bank’s board, then amended, then inexplicably dropped. As a consequence, some staff continued to think that an agreement was in place, and to refer to it in other documents. A charitable way to describe the process would be haphazard.

    According to the report by the bank’s general counsel into the curious matter of the agreement that wasn’t, the bank has no clear procedure to fix responsibility for the accuracy of project appraisals. The response of the management admits the need for thoroughness in preparing for board meetings. Some might call this a statement of the obvious.

    The Albanian project also sheds light on some murky questions about whom the bank recruits and co-operates with when it executes projects. In this case, the bank’s management told the investigation panel at first that there was no link at all between the demolitions in Jale and the coastal-redevelopment project.

    Go directly to Jale

    Indeed, the demolitions were carried out by the Albanian construction police, not the bank. But the panel found that the aerial photographs which identified the targets for demolition were provided by staff in the project co-ordination unit, and that they used World Bank funds to get them taken. These photographs were then sent to the construction police, along with a letter from the project co-ordinator asking for action to be taken “as fast as possible”.

    The construction police responded to the project co-ordinator’s request with alacrity, arriving in the hamlet of Jale to demolish the “illegal” houses in the early hours of the morning. This eagerness to please was probably not entirely out of respect for the World Bank: the project co-ordinator was the son-in-law of Albania’s prime minister, Sali Berisha, who has recently turned his ire on the bank.

    The inspection panel notes in its report that local World Bank staff were concerned both by the co-ordinator’s political links and by his qualifications. He was appointed anyway, getting his job just a few months after his father-in-law took over as prime minister.

    This is unlikely to be the only case of its kind. The appointment of influential people with their own agendas, sometimes at loggerheads with the bank’s, poses a large problem for the way its projects are administered. The bank’s response to the Albanian case includes a commitment to try to avoid appointments that involve conflicts of interest “if possible”. But the problem, some would argue, is that having such people on its projects may allow the bank to cut through red tape by virtue of their connections, a valuable “skill” in difficult political environments. And this could provide an incentive for senior managers to look the other way when well-connected people are recruited.

    Old-fashioned corruption is a problem too, as is apparent from the saga of the two IT firms mentioned above. There is also a huge brouhaha about fraud in health projects in India, where investigations that ended in 2008 revealed “unacceptable indicators of fraud and corruption”, according to Mr Zoellick.

    On the positive side, the bank has at least learnt to admit serious errors when they are proved to have happened. And it has wrestled seriously in recent years with the tough question of whether or not to cut off funding when corruption is suspected. Empowering its inspection panel to look into matters of corruption, which are currently not within its remit, would also be a useful step.

Published by ACLIS feb. 24, 2009

 
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