Re: HOMESTEAD: Re:Updated request to Ellerman and Turnbull re: response to Turnbull's proposal to World Bank and Ellerman involvement

[Shann Turnbull <sturnbull@mba1963.hbs.edu>]

At 04:28 AM 10/9/2001, Deborah Groban Olson wrote:
> The President of the Bank, a former
> Australian colleague of Turnbull, gave Ellerman permission to develop
> this proposal but added his own idea that loans from the World Bank to
> the private sector in client countries also be included in the buy back
> proposal.  

Deb

I met with David Ellerman in June after the COG meeting at a conference
organised in Washington D.C. by Professor Larry Mitchell.  I had
also another meeting with Jimmy Wolfensohn set up for this time with
Norman Bailey a former White House advisor to President Reagan and an
economist who had Wolfensohn as Wall Street client in their other
lives.  The World Bank staff requested briefing notes for our
meeting with Jim which got cancelled but he was provided with my briefing
notes that included my COG paper on Central Banks and a proposal that
David and I hatched up returning from the COG meeting for client
countries to buy back their loans.  

At our June meeting, David showed me an internal World Bank note from Jim
giving David permission to follow up this matter and to also consider the
buy back of IFC loans to the private sector of client countries. 
David has since advised that the matter got bogged down in the
bank.  So external encouragement is required to embarrass the
bureaucrats in the Bank to take the matter seriously such as could be
provided by the Jubilee+ plus movement.  Or even perhaps
COG?

 I thought Jim's contribution a terrific improvement on the
idea.  I then exchanged some e-messages with David to determine if
client governments guaranteed the loans made by the World Bank through
the IFC to their private sector.  It turns out that they do not and
so this is probably why Jim suggested that they be included because the
local currency bonds issued by the client country to the Bank in exchange
for the private sector loans could be government guaranteed.  This
would provide support for the credit rating of the Bank.

I then incorporated Jim's idea in a rewrite of my briefing notes to him
for Ann Pettifor to consider in London who is the CEO of
Jubilee+.   However, so as not to compromise David, nor Jim,
this briefing note made no mention that it was originally written for the
President of the World Bank and that it was Jim who had suggested that
client countries also buy back their private sector loans.  Ann
requested some revisions to make my briefing note reader friendly as it
was written in "short hand" for insiders like Jim and David,
et. al.   Ann then posted it on the Jubilee+ web page in late
July after I met her on another trip in early July.  Refer to
"Liquidating the World Bank: with debtor countries buying back their
loans and introducing self-financing development" 
http://www.jubileeplus.org/opinion/shann_Liquidwb.htm 
She also posted my Central Bank discussion paper at
http://www.jubileeplus.org/analysis/articles/shann_COG_spread.htm
 
When Jim was in Sydney last month he confirmed that it was his idea to
include IFC loans and so I could now make this public without
compromising David.  The Opinion Editor of our national financial
newspaper was in the audience at the public meeting at which Jim spoke
and responded to my public question on changing the role of the Bank to
which Jim replied.  As a result  he published an Op Ed by me on
“The World Bank can sell loans and buy time” Op. Ed. The Australian
Financial Review, August 7, p 55, Sydney, 2001.  This mentions
that it was Jim's idea to also sell back private sector loans.  A
hard copy of this article was posted to Wolfensohn, Ellerman and
Bailey.  My 500 word Op Ed is attached for your reference under my
working title "New mission for World Bank".  The editor
nearly always provides their own title!  

Jim also agreed in Sydney to have a follow meeting on this proposal with
Norman Bailey after the September annual meeting of the Bank.  So
Jim is still making a positive effort to following up the proposal and I
see no reason why his interest should not be made public or why this
could now concern or compromise David.

Regards

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Shann Turnbull  Ph.D.
P.O. Box 266 Woollahra, Sydney, Australia, 1350
Ph: +612 9328 7466 office; +612 9327 8487 home; Fax: +612 9327 1497;
Life long E-mail: 
sturnbull@mba1963.hbs.edu  Alternate:sturnbull@optusnet.com.au
http://members.optusnet.com.au/~sturnbull/index.html
Papers at: http://papers.ssrn.com/sol3/cf_dev/AbsByAuth.cfm?per_id=26239
with other papers & book at http://cog.kent.edu/library.html