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World Bank Chief to Step Down in '05

With Bush's Backing Unlikely, Wolfensohn Plans to Leave Post After Term Expires

By Paul Blustein
Washington Post Staff Writer
Monday, January 3, 2005; Page A04

James D. Wolfensohn, president of the World Bank, said yesterday that he expects to leave his job after his term ends this year, heralding the end of a tumultuous decade at the helm of the development lender.

"I've had 10 years, and I think that's probably enough," Wolfensohn said on ABC's "This Week" when asked whether he would like to stay beyond his second five-year term. "But if the need is there, I'll do whatever the [bank's member countries] want. My understanding and my belief is that probably during the course of this year I'll give over to someone else."

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The comment was the first public acknowledgement by Wolfensohn, 71 , that he is unlikely to win the backing of the Bush administration for a third term. In recent months World Bank officials have described him as eager to stay on well past June, when his term expires, but increasingly resigned to the prospect that the Bush team would prefer to replace him with someone else. Publicly, Wolfensohn has said only that around year-end he will assess his chances of being reappointed, and make up his mind then.

By tradition, the United States, the largest shareholder among the World Bank's 184 member nations, chooses an American to head the bank, while Europe gets to choose the head of the International Monetary Fund.

The administration is still in the early stages of sifting names of potential replacements for Wolfensohn, but administration sources have said that Washington plans to consult with other member nations and conduct a more "transparent" selection process than in the past, when the decision was made by a handful of top U.S. officials.

Prominently mentioned as a candidate for the job is Robert B. Zoellick, the U.S. Trade Representative. Other possibilities include John B. Taylor, the undersecretary of the treasury for international affairs; Randall L. Tobias, the administration's global AIDS coordinator; Christine Todd Whitman, the former director of the Environmental Protection Agency; and Carla A. Hills, Zoellick's predecessor during the administration of President Bush's father.

Tony Fratto, a Treasury spokesman, declined to comment yesterday, citing the administration's policy of not discussing personnel matters publicly.

Wolfensohn was picked by President Bill Clinton in 1995 and reappointed in 2000. A former investment banker, the Australian-born Wolfensohn has led the bank with a high-voltage style, using his charisma, charm and frequently explosive temper to cajole and bully the bank's staff and board into changing the bank's focus toward a greater emphasis on alleviating poverty.

The bank, which lends about $20 billion a year to developing nations, had been led for 15 years before Wolfensohn's arrival by a succession of relatively drab men and it was under attack from both ends of the political spectrum. Critics accused the bank of imposing austere economic policies on poor countries in exchange for its loans and also blamed the bank for propping up corrupt regimes.

Wolfensohn put top priority on making the bank less arrogant and "top down" in its approach to poverty reduction, and he moved about two-thirds of the country directors from the bank's headquarters into the field. His legacy also includes his successful fight to grant substantial debt relief to several dozen of the world's poorest countries, and a declaration that corruption, a topic long ignored at the bank, is a "cancer" in the developing world.

Although he won plenty of admirers, including many in aid groups that had long criticized the bank, he drew derision from others who viewed his management style as chaotic and wasteful of bank resources.

He clashed with the Bush administration over whether the bank's aid was being used effectively and whether the bank ought to provide more of its aid to poor nations in the form of grants instead of zero-percent loans.

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