Bush to Pick Zoellick for World Bank

By Peter S. Goodman
Washington Post Staff Writer
Wednesday, May 30, 2007

President Bush today plans to name Robert B. Zoellick, a career diplomat and trade negotiator, to head the World Bank, seeking to dispatch the leadership crisis that has gripped the institution under Paul D. Wolfowitz, senior administration officials said last night.

In selecting Zoellick, 53, to serve a five-year term as bank president, the White House opted for a familiar choice, a former member of the Bush Cabinet and a figure widely respected in foreign capitals, the officials said. Zoellick is a former U.S. trade representative and deputy secretary of state who went to work last year as an executive at Goldman Sachs.

"He has a proven record of working with counterparts around the world to get positive results," said Treasury Secretary Henry M. Paulson Jr., who oversaw the search to replace Wolfowitz.

But the insider credentials that make Zoellick favored in the Bush White House, where loyalty carries enormous weight, could work against him at the bank as they did with his predecessor. Many European governments were dismayed by the appointment of Wolfowitz, who was a primary architect of the Iraq war while at the Pentagon.

"People think Zoellick is highly intelligent and has a pragmatic mind-set," said a senior World Bank official who spoke on condition that he not be named for fear of alienating his new boss. "But he's still from the same people who brought you the Iraq war, the same people who brought you Paul Wolfowitz and Donald Rumsfeld. There's immediate jaundice about his country of origin. Any American appointed by this president would carry that stigma."

In the days since Wolfowitz resigned to end an ethics controversy, several foreign governments and dozens of aid organizations have called for an end to a handshake agreement that has for more than 60 years given the president of the United States the right to select the World Bank chief while allowing Europe to pick the head of the International Monetary Fund.

Developing countries argue that this system renders the institutions tools of the most powerful nations. Over the weekend, finance ministers in Australia, Brazil and South Africa jointly declared that the next World Bank president "should be appointed using an open, transparent selection process with candidates not restricted by nationality."

Some analysts had suggested that the White House might hand the World Bank board a list of candidates, then invite the board to pick the final name. Paulson acknowledged hearing sentiments in favor of that course as he conferred with governments. But he said the administration decided to give the board a single name to swiftly end the crisis. Wolfowitz has relinquished day-to-day management of the bank and is to formally step down June 30.

"Given the turmoil, the vast majority of people I talked with wanted to move quickly," Paulson said.

That rationale did not wash with those advocating a more open system.

"If this administration thinks they can simply anoint someone without engaging in pro forma consultations, they are going to face trouble," said Colin I. Bradford, a former chief economist at the U.S. Agency for International Development and now a fellow at the Brookings Institution.

Paulson declined to name the governments with which he spoke, but he said he was confident Zoellick would be widely embraced as "a merit-based candidate."

One senior bank official briefed by a European member of the bank's executive board said Zoellick is likely to win the blessing of the board. An open challenge to the White House would be unprecedented, and major European nations are disinclined to jeopardize the arrangement that secures their claim on the IMF.

"Most board members are just going to roll over and take whoever it is," the official said, adding that Zoellick seemed like a conciliatory candidate. The official, who was not authorized to comment publicly on the matter, spoke on condition of anonymity.

Though Zoellick is clearly part of the Bush administration's inner circle -- he was one of the "Vulcans," the core group of Bush foreign-policy advisers in the 2000 campaign -- he is not seen as ideologically rigid. That contrasts with Wolfowitz, a neo-conservative accused by some members of the bank staff of running the institution as an adjunct of the White House.

"Zoellick may not enjoy a honeymoon, but there will still be a sizable slice of the bank prepared to give him the benefit of the doubt," said a senior bank official, who also spoke on condition of anonymity.

Zoellick commands high marks for his intellect and his résumé, though he has a reputation as being sometimes brusque and irascible. He has experience managing large organizations, which administration officials said would help him oversee the World Bank and its 10,000 employees.

Zoellick -- not Wolfowitz -- was supposed to get the job two years ago: Associates say Zoellick had been tentatively selected as World Bank president, but then Condoleezza Rice claimed him as her deputy at the State Department. Zoellick reluctantly accepted, mainly out of loyalty, telling associates that he feared missing better opportunities later if he turned Rice down.

Zoellick is viewed as especially skilled at negotiations. As the primary American trade negotiator, he produced the deal that allowed China to enter the World Trade Organization.

Under Rice, Zoellick essentially ran his own mini-State Department. He acquired his own portfolio of issues, such as China and Latin America, and he played a critical role in Sudan policy. Last year, he negotiated a peace accord between the Sudanese government and Darfur rebel groups, though the deal later collapsed.

Some question his commitment to the World Bank's stated mission of fighting poverty. While U.S. trade representative, Zoellick angered some advocacy groups by insisting that trade pacts beef up patent protection for large drug companies, discouraging the spread of generics.

"Given his background, he'd be more likely to say we have to bend over backwards to protect the profits of brand-name companies and put public health second," said David Bryden of the Global AIDS Alliance in Washington. "It's not the set of values we need at the bank."

Correspondent Glenn Kessler contributed to this report from Berlin.

© 2007 The Washington Post Company