Debate Rises On World Bank Succession
Saturday, May 19, 2007
The departure of Paul D. Wolfowitz as World Bank president is prompting calls around the world to revoke the traditional right of the United States to select the institution's leader.
As the White House asserted its claim on picking Wolfowitz's successor, aid groups and former bank officials demanded that the next president be selected not in deference to the Bush administration, but on professional merits.
Advocacy groups and development experts took aim at an unwritten rule that has for six decades governed the financial institutions created in the aftermath of World War II: The U.S. president picks the World Bank chief, and Europe selects the head of its affiliate institution, the International Monetary Fund.
"Paul Wolfowitz's problems at the World Bank stem in part from a widespread perception that he disproportionately represents U.S. interests rather than objectives that command a global consensus," said a letter signed this week by more than 200 people, including heads of aid organizations, and sent to the executive boards of the World Bank and the IMF. The letter called for the traditional arrangement to be "abandoned and replaced with selection procedures that reflect two key principles: transparency of process, and competence of prospective leadership without regard to national origin."
Wolfowitz, forced out after weeks of ethical controversy, yesterday assured the bank's executive board he would have little to do with the institution from now to June 30, when his resignation takes effect.
In a letter, Wolfowitz said he would "leave the day-to-day work of board meetings to the bank's managing directors," while deferring to them on policy issues. Wolfowitz said he "may make a farewell trip to Africa at the request of a number of leaders," but promised to consult the board on travel plans.
Wolfowitz's letter was meant to resolve an argument surrounding the interim period. The Bush administration has opposed the appointment of an acting president, fearing such a move might weaken its prerogative to name Wolfowitz's successor. Senior bank officials who spoke on condition that they not be named, citing political sensitivities, said the letter mollified the Bush administration while giving bank officials assurances that Wolfowitz is effectively gone.
The struggle over the bank's future is taking place even as its relevance in the world is under attack.
The World Bank is not a bank in the conventional sense. It is a vast, global development program financed by wealthier countries that pumps billions of dollars into the economies of poor countries every year, either as low-interest loans or grants. Bank money finances programs ranging from schools to hospitals to mosquito nets that guard against malaria, and it has historically been a lifeline in some of the world's poorest places.
Some critics argue, however, that in a world flush with capital, the bank's lending to attack poverty is no longer as vital as it once was. Venezuela is sprinkling Latin America with aid, China is distributing loans across Africa, and private money is coursing around the globe, allowing governments to borrow liberally.
Still, the bank remains a last resort in many places, lending urgency to the leadership question, analysts said.
"Private capital does not flow to poor, hungry, disease-ridden areas with unreliable electricity," said Jeffrey D. Sachs, director of the U.N. Millennium Project, which oversees an action plan to attack extreme poverty. "One needs this official financing to address the misery of places that are ignored by the global markets."