Janet Bush: For all the talk about 'making poverty history', the end result is still genocide-by-numbers

This year of "making poverty history" is not going swimmingly well so far. It is hard not to be cynical when the German Chancellor, Gerhard Schröder, has the opportunity to assert the influence of "Old Europe" and do the developing world a good turn at the same time, and then flunks it. Why did he feel he had to endorse George Bush's choice of Paul Wolfowitz to lead the World Bank?

This year of "making poverty history" is not going swimmingly well so far. It is hard not to be cynical when the German Chancellor, Gerhard Schröder, has the opportunity to assert the influence of "Old Europe" and do the developing world a good turn at the same time, and then flunks it. Why did he feel he had to endorse George Bush's choice of Paul Wolfowitz to lead the World Bank?

The nomination of a right-wing hawk should not have come as a surprise. For all the dedication of its multicultural staff - many of whom are brilliant, good people - the World Bank has always been an arm of US strategic interests. In the 1970s it was led by Robert McNamara, who, as US Defense Secretary, had been one of the architects of America's war in South-east Asia and hugely boosted the influence of the Pentagon. Then, the World Bank made loans conditional on population control; under Wolfowitz, loans will be contingent on co-operating in the fight against terror (aka anyone challenging America?).

In 1945, when the World Bank was set up, the US Treasury Secretary, Henry Morgenthau, suggested the impoverishment of the Third World should be its explicit aim: "Nothing is more menacing to world security than to have the less-developed countries, comprising more than half the population of the world, ranged in economic battle against the less populous but industrially more advanced nations of the West."

For the past 60 years, the world has been ill-served by the bank that bears its name, but change, frankly, is not on the table. Tony Blair and Gordon Brown have headlined the Africa show with aplomb, but how much substance is there? It is indicative that the launch of the Commission for Africa was rescheduled to coincide with Comic Relief on the telly. Beneath the hype and jollity, a framework of rules and protocols remains rigidly in place, stacking the odds against the poor.

The International Monetary Fund barely lends money any more, partly because countries don't want the tough economic conditions attached. But there is still no escape: the Paris Club, a creditors' cartel of the world's richest countries, will still not consider debt relief for any country without an IMF adjustment programme. The club has a strict unanimity rule, so even in a case where Britain was by far the largest creditor to a developing country and wanted to cancel the debt unilaterally, it couldn't as long as any single other member of the Paris Club was opposed.

Why can't France, so keen to develop Africa as a "sphere of influence", spearhead change? Why are France and Germany not pushing for qualified majority voting in the Paris Club, as they have in the European Union, to break the impasse?

The answer is that Europe is no different to America in such matters. The attitude of creditors, sovereign and multilateral, remains, institutionally, grudging and penal. Like the doorstep loan shark, the control exerted over a country in ever-increasing debt is intoxicating.

It is now evident that the Highly Indebted Poor Country Initiative - put together by the IMF as a deliberately modest, controlling alternative to the all-out, empowering debt cancellation demanded by the Jubilee 2000 campaign - has left poor countries in even direr straits. Debt burdens have gone up. And how have the lending institutions and creditor clubs responded? They have conducted studies of debt sustainability, which will be among the issues on the table for discussion at the spring meetings of the IMF and World Bank in Washington next month.

This is good news, right? The powers-that-be have at least accepted that the debt situation may not be sustainable. Well, no. Sadly, the Framework for Long-term Debt Sustainability would apply only to future borrowing; no existing debt would be cancelled. So, debts will inevitably go on rising and the United Nations' worthy Millennium Development Goals for economic and social progress in all countries won't be met. Dressed up as goodwill and disguised by bar charts and algebra and technical hocus-pocus, the genocide-by-numbers continues.

Earlier this month I was in West Africa and went to an informal dinner during which the finer points of the region's budget were discussed by some visiting officials from the IMF and a donor country. They were well-meaning and largely sympathetic, yet it was odd watching a bunch of white people picking over the workings of another part of the world - one, it has to be said, with some strong home-grown ideas about its own development.

The new debt sustainability framework gives debtor countries ratings based one-third on economic performance and two-thirds on governance. Britain's Commission for Africa also highlighted governance. It would be a breakthrough indeed if, by governance, rich countries had finally resolved to listen to the views and ideas of developing countries; those in Africa who have heard of the commission despise it because it is not African.

No, governance seems to mean that as long as developing countries continue in effect to be run by their creditors, the money will continue to flow. And it is such an all-embracing term that it beautifully broadens the scope for interference from creditors.

But surely if debts are to be cancelled, it is right that debtor nations should run their affairs properly so that such largesse is not wasted and misused? Absolutely. But are we right to assume that corruption and bad governance are the preserve of the developing world? Think on this. In two out of the seven richest countries in the world which meet as the Group of Seven - France and Italy - the president would be in jail for corruption if he weren't the president and enjoying the immunity conferred by that post.

JFK or Charlie: who do you trust on taxes?

God bless Charlie Kennedy. There is such a broad area of consensus on domestic economic policy between Labour and the Conservatives - from the desirability of low taxes, to the privatisation of public services - that he is doing us all a favour in this desperately dull election campaign (surely the actual date must be announced soon; what reason is there to keep us in suspense?) by pledging to raise the top rate of tax to 49 per cent for those earning £100,000 plus a year.

We have become so used to Gordon Brown's formula of mild redistribution, dressed up in impenetrable jargon, that a straightforward promise that the rich will pay more imparts a delicious shiver. The Liberal Democrat leader should perhaps go further: why not impose a tax on purchases of pin-striped suits, or on government special advisers, or on tax inspectors? Let's get back to some heady class politics and get the fun back into elections.

The trouble is - returning to Dullsville with a thump - there doesn't seem to be a huge real benefit to be derived from this proposal. According to the Institute for Fiscal Studies, the move would net no more than £4.2bn in 2004-05 because it applies to relatively few people - just over 400,000 or 0.9 per cent of the adult UK population. In addition, threatened by such a large jump in their marginal tax rate, these individuals would have a large disincentive to earn that much. They could reduce the number of hours they work or find accountancy wheezes to avoid paying.

It is worth remembering a previous, great Kennedy - John F - who, in 1963, enacted a cut in the top rate of federal income tax from 91 per cent to 70 per cent. Critics warned that this would lose the US government revenue but they were proved spectacularly wrong. When the tax cut was introduced by President Lyndon Johnson in 1964 after Kennedy's assassination, personal income tax receipts jumped by nearly 30 per cent over two years, well outstripping GDP growth of 18 per cent.

Which Kennedy will prove to be the fiscal visionary?