[Congressional Record Volume 148, Number 66 (Tuesday, May 21, 2002)]
[House]
[Pages H2809-H2810]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
WORLD BANK PLANS MORE LOANS TO IRAN OVER U.S. OBJECTIONS
The SPEAKER pro tempore. Under a previous order of the House, the
gentleman from California (Mr. Sherman) is recognized for 5 minutes.
Mr. SHERMAN. Mr. Speaker, where you sit now or stand now, the
President of the United States told this Nation right after September
11 that there are those who are with us and those who are with the
terrorists. I was not surprised to hear our President indicate that the
government of Iran is on the side of the terrorists. Yes, it is true
that there is a nominal, though impotent, figurehead reformist posing
as President of Iran, but, of course, the real power is exercised by
unelected officials who take the most extreme pro-terrorist views. So I
was not surprised when our President used the term ``axis of evil'' and
included the government of Iran, not the people of Iran who have given
us one of the world's great civilizations, but the current unelected
real power in the government of Iran.
I was not surprised today when the United States State Department
identified the Iranian government as the number one sponsor of
terrorism, but there was something that surprised me. I am surprised
that we are about to finance those who finance terrorism. Yes, we do
not have to comb the mountains of Afghanistan to find Mohammed Omar,
because here in Washington down on K Street are those who are ready to
finance those in the government of Iran who are the number one sponsors
of terrorism.
This entity does not only enjoy the protection of the American
government, but surprise further, they are about to receive over 800
million of our tax dollars this year, just as they did in prior years.
I refer to the World Bank, an organization that does many worthy
projects. Of course, Osama bin Laden built hospitals as well. Now they
are about to fund the number one sponsor of terrorism.
Let us reflect that money is fungible. The government in Tehran
spends the minimum they have to on domestic affairs in order to secure
their power. Whatever is left over goes for nuclear weapons development
and to finance terrorism, and to help meet those domestic needs the
World Bank financed by our taxpayers.
I want to skip a little ahead in my speech to make sure I identify
this point. I am currently working on legislation, and I hope others
will join me in drafting it, not as mere cosponsors, but as genuine
coauthors, to say to the World Bank: Enough is enough. That if you make
further loans to Iran, you will not be allowed to receive any
additional monies from the United States and, perhaps further, that if
you make additional loans to Iran, we will withdraw the capital that we
have already invested. This is because weak protests, a mere vote and
voice, virtually guarantees that the World Bank will send over $700
million, $755 million, to be more precise, over the next year to the
government in Tehran.
Two years ago when the World Bank proposed a loan, we weakly voted
against it. We told them we were against it. We voted all of our
shares. It did not matter. And if this House is willing to settle for
nothing more than a weak protest, then let us remember that when Iran
develops nuclear weapons, they are not going to be smuggling them in to
Paris or Rome; those nuclear weapons, scarcely the size of a human
being, will be smuggled into Washington or New York or Los Angeles. And
those European governments that stood with Tehran and demanded that
they get funded will not be the immediate targets of Iranian nuclear
terrorism. We will.
So perhaps we need to do more than weakly protest and get outvoted
than have tea with the diplomats who are sending our money to Tehran.
Now, we will be told that the World Bank is 5 different entities and
we are funding the right hand and the money to Tehran is coming out of
the left hand. Let us not be fooled. There is one staff, there is one
president, there is one group of directors making one group of
decisions, and if we are going to send over $800 million this fiscal
year alone in this upcoming appropriations bill, not the supplemental,
but the annual, if we are going to send that money to the very people
who delight in the financing of the Tehran regime, and we can get
outvoted as to how it is spent, a mere change in the bylaws, then even
the right hand could send money to Tehran or to Khartoum in Sudan.
Mr. Speaker, let us hope that this Congress has the courage to upset
the diplomats at their tea parties and say no money for the World Bank
if that World Bank is financing the government in Iran.
[[Page H2810]]
[From Dow Jones International News, May 17, 2002]
World Bank, Over US Objections, Plans More Loans To Iran
(By Joseph Rebello)
Washington (Dow Jones).--The World Bank, undeterred by
President George W. Bush's condemnation of Iran as part of an
``axis of evil, arming to threaten the peace of the world,''
is pressing ahead with a plan that would provide as much as
$755 million in loans to the country over the next two years.
Since the bank began preparing the plan, Iran has mostly
disappointed Western expectations that political reformers
would succeed in making it more democratic and liberal.
Reformers were silenced, and public executions and public
floggings increased last year, according to Human Rights
Watch. Iran remained the world's ``most active'' state
sponsor of terrorism, according to the U.S. government.
But inside the bank support for more loans to Iran has only
grown, officials say. In January, just as Bush identified
Iran as a key threat to U.S. security in his State of the
Union address, a team of bank directors returned from a visit
to Tehran. Its recommendation: ``deeper and faster
involvement of the bank'' in Iran, said Jean-Louis Sarbib,
the bank's vice president for the Middle East and North
Africa.
Staff Expects To Seek Approval For New Loan By Dec.
``We have been quite impressed with the way they have gone
about some of their macroeconomic reforms,'' said Sarbib,
citing the country's success in building its foreign
reserves, in reducing poverty and in ensuring basis education
for all Iranian girls. ``What we see on the economic side are
people who are really trying to build economic democracy, who
are trying to build a market system.''
The bank's staff intends to seek approval for a new loan--
worth about $150 million--by the end of the year. That loan
is an element of a tentative plan, endorsed last year by the
bank's board of directors, that advocates the approval of
$755 million in loans to Iran in fiscal 2002 and 2003. Iran
could eventually be eligible for more than $500 million a
year, if it continues to satisfy the bank's requirements,
officials said.
For the U.S. government, the bank's biggest shareholder,
the courtship of Iran has been a lingering source of
embarrassment. The U.S. contributes 29% of the bank's
capital. It control 16% of the votes cast by the bank's
directors--usually a decisive share. It is forbidden by
Congress from supporting loans to Iran. But it has been
powerless to stop them in recent years.
U.S. Hasn't Been Able to Stop Loans To Iran Recently
Two years ago, the bank's directors ended a seven-year lull
in lending to Iran and approved two loans worth $232 million.
The U.S. objected strenuously. Madeline Albright, the
secretary of state, lobbied leaders of other governments,
asking them to oppose the loans because of Iran's human-
rights record. She made little headway: the U.S. cast the
sole no vote. Canada and France abstained.
James Wolfensohn, the bank's president, told U.S. officials
at the time that the loans addressed ``basic human needs''
and were designed to support the reform efforts of Mohammad
Khatami, a moderate cleric who had been elected Iranian
president in a landslide in 1997. But any future loans, he
told the bank's U.S. representative, would be considered only
after a ``review of all aspects of the economic and
governance programs of his government.''
Iran's performance since then has been mixed. Khatami was
reelected to a second four-year term last June. His
government briefly warmed toward the U.S. after the terrorist
attacks of Sept. 11--it offered, at one point, to rescue U.S.
pilots downed in the war in Afghanistan. But Khatami's
influence soon faded amid a crackdown by the country's
conservative clerics, who control Iran's judiciary and
security forces.
``Even after his sweeping election victory in June, when he
increased his share of the popular vote, (Khatami) continued
to shy away from open confrontation with his opponents and
made no discernible progress in implementing his promised
reforms,'' Human Rights Watch said in a report in January
that warned of ``mounting'' social and economic problems.
``Increasingly . . . he appeared to represent more of a
safety valve than an agent of tangible change,'' it said.
The World Bank, however, measures Iran's performance
differently. It considers itself apolitical: The bank's
mandate, officials say, is simply to reduce poverty and
promote sustainable economic development among poorer
countries. In deciding to make loans, accordingly, it avoids
making official judgments abut the borrower's stance on human
rights, terrorism or nuclear weapons. Instead it keeps a
close eye on economic and social indicators and the speed
with which governments improve those statistics.
By those measures, Iran has performed splendidly. The
poverty rate has fallen to 15.5% from 47% in 1978. The infant
mortality rate dropped to 26 for every 1,000 births from 47
in 1990. Iran has also built up $17 billion in foreign
reserves, partly because of the recent rebound in oil prices
and partly because it has paid off much of its debt. It has
lowered tariffs, removed most non-tariff trade barriers and
unified its system of multiple exchange rates--all well ahead
of schedule.
``We are seeing concrete results--in terms of economic and
social reforms,'' Sarbib said. Last year, the bank's staff
completed the review that Wolfensohn and the bank directors
had called for, and advanced a short-term plan calling for
the launch of a half-dozen development projects in 2002 and
2003. With the exception of the bank's U.S. representative,
all of the bank's 24 directors supported the proposal. The
bank's staff plans to present a long-term lending plan to the
directors next year.
``The general sense among executive directors is that they
are supportive of the bank's engagement with Iran, with the
exception of the U.S.,'' said one director who asked not to
be named. ``It's difficult to see how the U.S. position could
influence other countries. My sense is there is not
widespread support for the U.S. position.''
U.S. Lawmaker Criticizes Bank; Says U.S. Lackadaisical
At least one U.S. lawmaker is incensed, saying the loans
will merely bolster Iran's repressive leadership. ``Money is
fungible,'' said Rep. Brad Sherman, D-Calif. ``The money that
the World Bank is providing to Iran's government is not
particularly benefiting its people. That government will
engage in the minimum domestic expenditures necessary to
maintain power. Whatever is left over they'll spend on
terrorism and nuclear weapons.''
Sherman said he has been trying to get the Bush
administration to take a harder line with World Bank, with
little success. ``Nobody's blood pressure is up on this,'' he
said. ``The problem is the U.S. bureaucracy. They say, `Oh,
gee, we'll vote no. If we get outvoted, que sera sera.' It's
as if they hadn't listened to the State of the Union address.
It's as if they were unaware of what happened on Sept. 11.''
A Treasury Department spokeswoman, Michele Davis, said the
U.S. government has regularly expressed its displeasure with
the World Bank's plans for Iran. ``The U.S. opposes World
Bank lending to Iran and has consistently communicated this
position to Bank management, including in May of 2002, when
the World Bank approved two loans to Iran despite U.S.
opposition,'' she said.
World Bank officials, meanwhile, said they can see no
reason why Iran should be deprived of loans. Sarbib rejects
the argument that World Bank loans for humanitarian and
development purposes allow Iran to spend its own resources to
develop nuclear weapons and promote terrorism. ``Look, they
have $17 billion of reserves,'' he says. ``If they want to do
all these things, they can do it. They don't need World bank
funds to do that kind of stuff.''
Besides, he said, ``Iran is a member in good standing of
the World Bank. They are current on all their obligations. As
a member in good standing of the cooperative, they are
entitled to the services of the cooperative.''
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