WASHINGTON DC – In a letter to World Bank President-Elect Paul Wolfowitz, the National Foreign Trade Council, joined by nine other U.S. business organizations, expressed major concerns over a pending World Bank proposal entitled “Increasing the Use of Country Systems in Procurement.” The letter urged the World Bank to suspend its adoption and engage with key business stakeholders on the issue. The proposal would decentralize the procurement process for World Bank-funded contracts and would be inconsistent with World Bank goals of promoting fair and transparent procurement systems in the developing world.
According to the letter, leading U.S. business organizations “have concerns about the proposal and urge that it receive much closer scrutiny and examination in terms of its implications for fair, efficient, transparent and non-corrupt procurement regimes in the developing world.” More specifically, the organizations expressed concern that the proposal could:
– Reverse World Bank Efforts to Harmonize Procurement Procedures Among Various Multilateral Development Banks (MDBs) – The draft proposal would allow countries that receive World Bank loans to use their own procurement regimes with no meaningful oversight or dispute settlement mechanisms and reverse long standing and positive efforts by the World Bank to harmonize and standardize MDB procurement standards and documents.
– Lead to Less Transparency, Increased Costs and Decreased Competition – By moving to a decentralized process with different country procurement rules, the proposal would create a confusing and non-transparent environment and could lower competition, increase costs and undermine important anti-corruption initiatives at the World Bank.
– Abdicate the World Bank’s Leading Role in Capacity Building – The proposal would be a step back in World Bank efforts to promote best practices and model arrangements on procurement, particularly through the Bank’s recent procurement standardization efforts.
A copy of the letter is available at http://www.nftc.org/default/trade/export%20finance/May%2025%202005%20Letter%20to%20World%20Bank%20President-Elect%20Wolfowitz.pdf.