World Bank snubs inquiry, vows a big loan to Iran

November 7, 2007

WASHINGTON (The New York Sun) — The World Bank is defying requests from an influential congressman to stall nearly $900 million in loans to Iran.

Earlier this year, the president of the World Bank, Robert Zoellick, who before taking that office served in a top Bush administration foreign policy post, declined a privately made request from Rep. Mark Kirk, a Republican from Illinois, to suspend the loans. World Bank spokesmen told that the bank will go ahead with the loans.
Kirk, who serves on the subcommittee that approves America’s share of the World Bank’s funds, is warning that the loans will undermine recent American and Western moves to exert pressure on Iran.
Kirk said that senior National Security Council staff told him that they did not think the World Bank loans were helpful to the American strategy of applying economic pressure to Iran to persuade Tehran to end its enrichment of uranium in Natanz. A spokesman for the National Security Council offered no comment when asked on Thursday and again on Sunday.
“It sends a message that directly undercuts Western diplomacy with regard to Iran,” Kirk told the Sun.
For now, Kirk is pursuing pressure on the World Bank through his post on the appropriations subcommittee that funds foreign operations. The chairwoman of that subcommittee, Rep. Nita Lowey, a Democrat from New York, has yet to take a position on holding up funding to the World Bank.
Kirk said he has been pushing the World Bank since August to review the loans it initially made in 2004 and 2005 for earthquake relief.
“He said, ‘I don’t know if I can stop that,’” Kirk said. “I said, ‘Think of the embarrassment if the UN Security Council approves three separate sanctions, and the United States imposes its own unilateral sanctions and three blocks away the World Bank cuts a check to the Ahmadinejad government.’”
A spokesman for the World Bank, who asked that his name not be used, said, “President Zoellick does not comment on private conversations.”
Zoellick, who served as President Bush’s first trade representative and was one of the original foreign policy advisers on his 2000 campaign for president, replaced Paul Wolfowitz as president of the World Bank after a campaign from within the bank forced Wolfowitz’s ouster.
The loans to Iran present Zoellick, in the first year of a ten-year term, with his first challenge between his loyalties to President Bush and his role overseeing the international institution. The loans themselves include a project to improve access to healthcare for rural Iranians; improvements to Tehran’s sewage system; an air and water quality monitoring project; and relief for the Bam earthquake.