As Paul D. Wolfowitz officially takes over as president of the World Bank today, he is presenting himself as a leader who will bring gradual shifts in policy to the giant anti-poverty institution, rather than tumultuous regime change.
But not everyone is so sure that he means it.
In the two months since the former U.S. deputy defense secretary was approved by the bank's board for the job, he has strived mightily to dispel fears that he intends to use the bank's $20 billion in annual loans to advance the Bush administration's foreign policy agenda.
Meeting with bank staffers, board members and outsiders, he has repeatedly stressed his commitment to the bank's core mission of alleviating poverty. And he has said he wants to listen to the advice of the world's leading development experts on how best to tackle the problems bedeviling poor countries.
Wolfowitz was in his customary low-key mode yesterday in a meeting with a group of reporters. He heaped fresh praise on the outgoing president, James D. Wolfensohn, citing Wolfensohn's emphasis on helping women and fighting corruption during his 10-year tenure at the bank's helm. Asked about the worry that his close association with President Bush and the war in Iraq will undercut the bank's credibility as an impartial dispenser of economic advice, he replied that he would overcome such concerns with actions.
"I think they judge you by how you come across and how you deliver," he said, adding that he has "encountered surprisingly little" skepticism among bank staff and developing country officials about his ability to distance himself from Bush. "I've encountered more, 'Gee, you could help us obtain access to the White House and Congress.' "
He made it clear that he wants to continue, and probably accelerate, the bank's recent shift toward lending more for infrastructure projects -- such as roads, bridges, and power plants. Those sorts of projects, which were the bank's traditional focus for much of the first few decades after its founding in 1944, were de-emphasized during the 1990s in favor of education, health and other "social sector" projects. But under Wolfensohn, they have started to stage a comeback, despite criticism from environmental activists.
"Infrastructure . . . has fallen too far out of fashion," Wolfowitz said. "Development is not just pouring concrete, but it does require concrete and water and electricity." He described lifting countries out of poverty as a "holistic process," adding, "No one's really sure what does work."
Some people take him at his word when he says he has no intention of turning the bank upside down. Still, "there's a lot of anxiety here," said one veteran bank economist. "We're all waiting with bated breath. I'm constantly asked, what is he going to do, and the only answer anyone can honestly give these days is, we haven't a clue." (Like other bank staffers interviewed for this story, she spoke on condition of anonymity because of concern about offending her new boss.)
Indeed, some of Wolfowitz's conservative boosters hope, and believe, that he comes to the job with the aim of implementing a far-reaching set of reforms.
Among them is Allan Meltzer, a professor at Carnegie Mellon University who headed a congressionally appointed commission that in 2000 recommended a number of sweeping changes in the way the World Bank helps poor nations. The proposals included giving poor countries outright grants, rather than no-interest loans, and sharply reducing bank lending for "middle-income" nations such as China and Mexico that can borrow on private markets. (The Bush administration has already prodded the bank to use grants much more than in the past.)
Meltzer said he thinks Bush chose Wolfowitz because he wants to revamp foreign aid in a major way, "and I think Paul will try to do that." He said he has not spoken to Wolfowitz directly since his selection as bank president, but added: "Let me say, it's in his interest to put on a charm show in the bank. But we'll see what happens when heads begin to roll -- if they do."
In his meeting with reporters yesterday, Wolfowitz skirted a question about grants vs. loans, saying he favors balance between the two. He was more emphatic in rejecting the idea of halting lending to middle-income countries. "They still seem interested in borrowing from the bank," he said, and he described the revenue the bank earns on such loans as "clearly a benefit to the bank, and therefore to poorer countries."
Bank staffers who have participated in the meetings with Wolfowitz said that if he is coming with a secret agenda, he has done a masterly job of disguising it. "He is reaching out and asking people to tell him what he needs to know," said a senior economist. "He's behaving like, 'I'm the new kid on the block; this is a complex and big place.' He's even been seen eating lunch in the cafeteria -- people were just shocked and amazed, to see him just get his tray and sit down at a table." But this economist said of Wolfowitz, "He's not giving away a lot" about his own views.
Another top official, recounting a couple of meetings between Wolfowitz and some of the bank's vice presidents, said: "People walked away saying, 'This is a person we can work with, a smart guy. Let's see if the actions match the words, but he's a serious, thoughtful guy.' "
Still, rumors are widespread at the bank that Wolfowitz has started to make his presence felt even before taking over. A reorganization plan has been frozen, as have appointments to positions just below the level of vice president, out of concern that the moves are not in keeping with the new chief's plans, according to bank sources.
One reason for trepidation among staffers is the realization that, in general, their politics do not mesh with Wolfowitz's.
At a farewell party for Wolfensohn in the bank's atrium, which Wolfowitz attended, a video showing tributes to the outgoing president drew enthusiastic cheers when Bill Clinton and Al Gore spoke. But when the face of Secretary of State Condoleezza Rice appeared on the screen, one attendee said, "you practically could have heard a pin drop."