On March 31, the World Bank's Executive Board will meet in Washington to choose a new president for the international lending institution. President Bush's nominee for the job is Paul Wolfowitz - a choice that has generated controversy, and even opposition, in some quarters. But experts predict Mr. Wolfowitz will be confirmed for the job.
The World Bank and its sister organization, the International Monetary Fund, or IMF, are specialized agencies of the United Nations. With 184 members, the World Bank leads efforts to reduce poverty worldwide and promotes economic development. It provides about $20 billion a year in loans. For its part, the IMF supplies countries with money to overcome short-term balance-of-payments problems.
Traditionally, the head of the IMF is a European and the president of the World Bank is an American. So when World Bank president James Wolfensohn announced he would retire this June after 10 years in office, President Bush was to name his successor. He chose Deputy Defense Secretary Paul Wolfowitz, a principal architect of the Iraq war and a man known for his neo-conservative political views.
President Bush's nomination has sparked controversy and opposition from certain quarters, especially non-governmental organizations, or NGOs.
Jeff Powell, coordinator of the London-based Bretton Woods Project, a grouping of British NGOs, says he is concerned that Mr. Wolfowitz has little experience in economics or in dealing with developmental issues.
"The World Bank is a multilateral institution which must navigate the needs and diverse aspirations of a broad group of stakeholders and to date, Mr. Wolfowitz's experience has suggested that he tends towards a much more unilateral policy," he said. "We are also concerned that he lacks development experience, an experience of policymaking in southern [developing] countries. Most of his experience is coming from the security and defense arenas and again, we have concerns that this is going to mean that his instincts are towards pursuing the war on terror rather than the war on poverty."
In a written statement following his nomination earlier this month, Mr. Wolfowitz pointed to his experience as U.S. ambassador to Indonesia in the 1980's, saying: "I spent three years in Indonesia, where economic development was the most important issue on the agenda."
Sebastian Mallaby recently wrote a history of the World Bank. He says Mr. Wolfowitz is a good choice. "I can tell you with some confidence that this guy has more experience in development than just about any other World Bank president when he first started. Some of the people who have been picked by the United States in the past have been totally, utterly unqualified, had no knowledge whatsoever of development," he said.
Other Wolfowitz supporters argue that one doesn't need to have experience in development economics to run the World Bank. One of those is Alan Meltzer, an economist whose 1999 commission recommended major reforms in the world institution. "The bank has plenty of people who are experts in development. That's not what they need. They don't need a development expert; they need someone there who can focus the organization on what its best opportunities are for accomplishing its mission. They need a manager," he said.
Mr. Meltzer says Mr. Wolfowitz has the perfect managerial skills, having helped run the Defense Department.
But Manish Bapta disagrees. He is the executive director of the Bank Information Center, a Washington D.C. based non-profit organization monitoring international financial institutions. "Running the defense department, which is run in a considerably more hierarchical manner within the U.S. government, is in some ways quite different than running a multilateral institution with 184 member countries on your board and a variety of different political interests that govern the role of the institution," he said.
Another concern voiced by the critics of the Wolfowitz nomination is that he will make the World Bank a tool of U.S. foreign policy. Jeffrey Winters, an expert on the World Bank at Northwestern University in Evanston, Illinois, says that has already happened.
"The World Bank constantly gets pushed into roles that it's not suited for," he said. "For example, the World Bank should not have been used as a crisis response entity in Asia. It should not be used for rebuilding Afghanistan after the United States has a war. It should not be used to soften and cushion crises in the Balkans and in the Middle East. The World Bank was designed as a long-term development instrument and it has actually been abused over the years by the United States and by the European powers as an instrument of foreign policy. One can only expect that Mr. Wolfowitz is only going to deepen that role."
Even some of Mr. Wolfowitz's supporters admit that his prominent role in the U.S. war in Iraq could have a negative effect on the World Bank. One of those is historian Sebastian Mallaby.
"In terms of the public perception of the World Bank, there were a lot of protests against the institution about five years ago when anti-globalization protests swept through the United States and Europe," he said. "Those have gone away during the period of the Iraq war, because people have been demonstrating about the war instead. And now what you are going to see is that the cause of anti-globalization will be reunited with the cause of Iraq war protests and it will all be focused on the World Bank and Paul Wolfowitz."
In an effort to address all those concerns, Mr. Wolfowitz has recently met with key World Bank officials. News reports say those officials were impressed and reassured by his answers.
Some European governments have expressed concern about Mr. Wolfowitz, but experts say Europeans do not plan to oppose his nomination. Manish Bapta, from the Bank Information Center, says in exchange for their approval, the Europeans are likely to expect something from the United States.
"To reciprocate, the U.S. may not object to France putting forward its nominee to head up the World Trade Organization or for Germany, [for the United States] to not veto their consideration for a permanent seat on the U.N. Security Council," he said. "So there is a lot of back-room dealing that is going to take place that's going to allow Wolfowitz's nomination to proceed uninterrupted."
The behind-the-scenes negotiations will come to an end March 31, when the World Bank's Executive Board meets to consider Mr. Wolfowitz's nomination to head the organization. Mr. Bapta and other experts believe he will be confirmed.
