So much for the lofty rhetoric about freeing trade and aiding development; when it came to the crunch, governments instead bowed to corporate protectionism. Thus the Doha round—launched after 9/11 as WTO members rallied around America in a show of unity—has collapsed in acrimony, with most blaming the US for its demise. This is not fair. America was guilty mainly of being too ambitious: it offered to prune its agricultural subsidies if others sheared their farm tariffs, but India and the EU refused.
Officially the round is indefinitely suspended, but there are already hopes of reviving it early next year. Besides, optimists point out that while 12 years have elapsed since the previous round was completed, globalisation continues apace and the world economy is booming. Such complacency is misplaced. If a deal can't be done when the going is good, perhaps it can't be done at all. After all, the only break in the WTO's run of failure—Seattle, Cancún, Hong Kong and now Geneva—was the Doha launch, when circumstances were truly exceptional. Next year hardly looks promising: President Bush is set to lose his power to push through trade deals without congress unpicking them, precluding US negotiators from striking a credible bargain with other WTO members; a new farm bill that could entrench America's contentious subsidies is in the offing; and an economic downturn could sharpen fears about trade-related job losses. But if the round remains on ice for too long, the WTO risks being sidelined, with the benefits of global competition, multilateral rules and impartial adjudication giving way to tit-for-tat protectionism and a web of bilateral arrangements that privilege rich-country companies at the expense of the poor.
BP's biggest blunders
If petrol costs over £1 a litre next time you fill up, blame BP. Oil prices spiked to nearly $80 a barrel when it announced it was shutting down America's biggest oil field—possibly until 2007—to repair leaky pipes. The lost production from Alaska's Prudhoe bay is only a tiny fraction of global output, but oil supplies are so tight—and speculators so frenzied—that the slightest disruption sends prices rocketing. (The terrorist threat to air travel and the fragile ceasefire in Lebanon have since pushed prices down somewhat—at least for now.) But in any case, the damage to BP could be great. The issue is not so much the financial cost of lower output and higher repair bills; it's the stain on the company's carefully polished eco-friendly reputation and, above all, the growing doubts about its competence. Last year, an explosion at its largest refinery, Texas City, killed 15 workers and injured over 100. In March, a corroded BP pipeline caused the biggest ever oil spill on Alaskan soil. In June, regulators charged it with rigging the US propane market. And the timing of the latest mishap could hardly be worse. The US congress, which is desperate to deflect some of the fire from voters fuming at soaring petrol prices, is planning a probe into BP's Prudhoe bay operations, and angry shareholders are suing BP for compensation. And with Venezuela, Russia and other oil-rich countries feeling flush and questioning why they need foreign help to extract their oil, BP's bungling is hardly a persuasive sales pitch.
The World Bank and corruption
The World Bank's controversial new boss, Paul Wolfowitz, has stirred up a huge fuss by making battling graft his top priority. His anti-corruption drive will be the most hotly debated topic at September's IMF/World Bank annual meetings in Singapore. He has frozen loans to India, Kenya, Bangladesh and Chad because of concerns about fraud, tightened the strings attached to debt relief for the notoriously kleptocratic Republic of Congo, beefed up the bank's anti-graft department, and pledged to spend more on promoting good governance. Wolfowitz is adamant: the bank will not tolerate corruption. A crackdown is certainly desirable: it is scandalous if bank funds destined to help the poor are siphoned off by crooked contractors or funnelled into politicians' Swiss bank accounts. It also erodes rich-country voters' support for debt relief and aid. More broadly, corruption impedes development: it stifles business, cuts into spending on public goods such as health and education, and hampers poor people's efforts to improve their lot. So the bank should try to ensure its money is well spent, monitor countries' corruption levels and help them root it out. But there is only so much the bank can do, and Wolfowitz appears to be going about it in the wrong way. His actions so far—a cancelled loan here and there—appear arbitrary, when they ought to be transparent and systematic. Nor is the bank meant to meddle in politics, and although the line is fuzzy, his bolder ambitions—such as fostering freedom of speech—overstep that fuzzy line. The bank's mandate is to promote development, not democracy. And while waging war on graft may sound good in Washington, in practice the bank must tolerate some, or stop lending altogether, since no country is whiter than white. Indeed, the bank itself is hardly above reproach. Its boss is appointed not through an open and fair selection process but by the US president—and Wolfowitz, who happens to be one of Bush's close chums, has since recruited a coterie of neocon cronies with few development credentials.
