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World Bank Board Approves Wolfowitz

By Paul Blustein
Washington Post Staff Writer
Thursday, March 31, 2005; 3:00 PM

The board of the World Bank unanimously approved Paul D. Wolfowitz today as the bank's next president, heralding a new era of conservative influence over the giant antipoverty institution.

The approval came two weeks after President Bush nominated Wolfowitz, the deputy defense secretary who played a central role in advocating and designing the invasion of Iraq. The move initially aroused shock abroad, especially in European countries opposed to the Iraq war, and speculation arose that some member nations of the bank would try to block the nomination on the grounds that Wolfowitz would make the institution an instrument of U.S. foreign policy. But talk of opposition subsided as foreign officials grudgingly accepted Wolfowitz's assurances that he would respect the bank's multilateral nature and was not coming armed with a preset agenda for turning the organization upside down.

Jakarta Tenure Offers Glimpse of Wolfowitz (The Washington Post, Mar 28, 2005)
Wolfowitz Draws Nearer to World Bank Post (The Washington Post, Mar 24, 2005)
Wolfowitz Strives To Quell Criticism (The Washington Post, Mar 21, 2005)

In a statement issued after the board's action, Wolfowitz continued to stress his willingness to listen to a wide range of views. "Fortunately, I already know I will have a great deal of help from the many people who are deeply committed to the mission of the World Bank," he said, noting that he had met with all 24 board members, flown to Europe to meet with top economic policymakers and spoken with "dozens" of other officials.

He also extended an olive branch to people who have been among the most uneasy about his appointment, including activist organizations that often tangle with the bank over its policies in the developing world. "I look forward now to deepening my understanding of the challenges facing the bank through exchange [of] views with two key groups: the civil society organizations whose advice and views have become increasingly important in bank deliberations; and the extraordinarily professional staff of the bank, who constitute the richest body of expertise in the world on the problems of economic development and poverty reduction," he said.

The installation of Wolfowitz as president, scheduled to take place June 1, will put the Bush administration's stamp on the World Bank's management much more firmly than before. The bank lends about $20 billion a year to developing countries, for projects ranging from roads and ports to education and health systems, and in the process it exercises great influence over those countries' policies because of the conditions it sets for providing aid.

The United States traditionally gets to choose the bank's president, but the current holder of the job, James D. Wolfensohn, was named by President Clinton, first in 1995 and again in 2000. Wolfensohn, a charismatic crusader against global poverty, has clashed often with the Bush team, which has tended to view his style of management as erratic and often wasteful of bank resources.

Wolfowitz has offered only broad suggestions about how he would run the bank differently; in interviews and statements, he has emphasized his admiration for much of what Wolfensohn accomplished, particularly the bank's focus on reducing corruption. In his statement today Wolfowitz said that Wolfensohn's "commitment to the bank's mission will be a hard act to follow and I will be counting on his continued advice and support."

Still, many bank insiders and observers expect him to shift the bank's direction in important ways, reflecting the complaints that administration officials have expressed about its shortcomings.

The administration has been eager to see the bank improve the way it monitors and holds countries accountable for their use of its funds. It also wants more bank aid for very poor countries to be provided in the form of grants rather than loans, on the theory that all too often the bank ends up lending to impoverished nations just so they can pay back previous loans.

Because of the administration's recent emphasis on spreading democracy, especially in the Middle East, much speculation has arisen that Wolfowitz will use the bank's clout to prod governments to implement democratic reforms. He has sought to quash talk of a dramatic change in policy by stressing that he believes the bank should focus on economic development and alleviating poverty. But development experts who know him well expect him to place particular importance on encouraging the development of solid political institutions and the rule of law.

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