For clues to Wolfowitz's economic development philosophy ... ... look to Indonesia. One of the leading US-based Indonesia scholars, Prof. Jeffrey Winters, looks at the role Wolfowitz, as Ambassador to that country, played in privatizing and deregulating the Indonesian banking system. Those "reforms" were blamed by many for the financial crisis of the late 1990s.

Winters writes that "Wolfowitz and his ... staff talked up the wonders of liberalization. The deregulated banking system would mobilize capital more efficiently, jobs would be created, and the economy would soar. Left out of the formula was any Indonesian government mechanism or capaicty for supervision and safeguards for the banking and financial sector. Ideologues like Wolfowitz could only see a need for the state to get out of the way. But what Indonesia's depositors really needed was a stronger state role to set rules and boundaries for bankers' behavior."

Sounds uncannily like the World Bank doesn't it?

Winters also reports on the maneuvers Ambassador Wolfowitz ordered in order to shield then-President Reagan from any discussion of Indonesia's human rights record during his visit in 1986.

Soren Ambrose ~ April 01, 2005

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