Where Hugo Chavez and William Baldwin agree.

I was surprised to read this comment:"Where greed is good" written by William Baldwin,Managing editor of Forbes and also this comment by Steve Forbes :"The World bank should resign."

The brouhaha over Paul Wolfowitz and the World Bank bluntly raises the question:Why do we need this institution?The same can be asked about its sibling,the International Monetary Fund.

Both were begun in late 1944,during the final stages of WWII,The IMF's mission was to give countries temporary short term loans so they could put their economic houses in order ,coping with temporary balance of payment problems without resorting to destructive tariffs or massive devaluations.During the 1930s countries had resorted to beggar thy neighbor policies ,such as devaluing currencies and imposing trade and capital restrictions .Trade shriveled,as did the flows of capital.The result was all-around impoverishment.Politically, the great depression made possible the rise of nazism and the Second World War.

The World Bank was designed to help countries ,particularly developing ones ,finance major infrastructure projects.In the aftermath of the depression the concept of free markets was in disrepute .The thinking was that nonmarket institutions were necessary to help keep economies humming and growing .By financing dams., highways and steel mills.,the World bank would hasten recovery from the war and,over the long term ,would help less developped nations achieve rapid growth.

With the collapse of fixed exchange in the early 1970s ,the IMF morphed into the doctor for governments in financial crisis.It made longer term loans with so called conditionalities ,i.e,prescriptions to get an economy out of the sick ward.

The trouble is that the aftereffects of taking IMF medicine are usually worse than the disease.High taxes,import restrictions and inflation inducing devaluations (the lessons of the 1930s had been forgotten)became the IMF's routine medications.It also pressured governments to do away with popular food and fuel subsidies;nice in theory ,but the abrupt removal of such lifelines in times of distress has often led to riots.

The IMF became a disastrously force for developing countries.Nations that blossomed did so by following policies that diametrically opposed to those routinely imposed by the IMF.

One good thing to come out of this decade's inflationary commodities boom is that countries don't need to borrow from the IMF and are,thankfully,free to pursue more positive policies.This boom has given Brazil and other commodity rich nations winfall revenues.Even that perpetual deadbeat,Argentina ,was able to flip the bird at the IMF.The money it saved by stiffing private creditors(it paid dollar-denominated debt holders only 15 cents on the dollar)and the money that gushed in as commodities rose in price enabled Buenos Aires to pay off its IMF obligations.

The World bank also became a destructive force by turning a blind eye to internal corruption when awarding lucrative construction contracts and by ignoring massive corruptions in its client countries.PRIVATE CAPITAL can just as easily finance a sound capital project as can the World Bank.Global financial markets are quick to underwrite promising infrastructures.The projects that private marketers don't touch are almost always by definition VAINGLORIOUS undertakings that do nothing to enhance economic growth.The only beneficiaries are politically favored contractors and government ministers and BUREAUCRATS.

What the designers of the World Bank didn't realizewas that putting in a road or a steel mill does not trigger sustained economic growth.Good ecomnomic policy,such as low taxes,,sound money,property rights and ease in setting up legal business does..

In light of MR.Forbes'comment , Mr. Chavez abandon of the World Bank is justified.I hope Mr Preval takes note of this comment.Instead of spending his time asking ,begging for loans from the World bank or the IMF he should spent more time mobilizing the diaspora to obtain the capitals needed to produce more goods and services for the haitian people.