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The World Bank must be returned to the world

[ Posted On: 2007-06-05 ]

Mr Paul Wolfowitz, the outgoing World Bank president, has been forced to resign in disgrace.

Technically, his resignation comes because of 'ethical lapses' concerning favouritism and financial benefits to his girlfriend, Ms Shaha Ali Riza.

But in reality, this is not just the story of a bad manager reviled by staff and a pariah in his own institution.

This is also the story of an institution that plays with the destiny of hundreds of millions of people around the world, but remains unsure of and unable to shape its own identity.

Wolfowitz should never have been appointed to the job. His tenure as World Bank president has been disastrous.

Terrible choice

He will leave behind deep and lasting scars on an already troubled institution. While his departure is, generally, a good thing for the World Bank and provides a perverse satisfaction to the critics of US foreign policy, it will do little to solve the structural problems that the bank faces. Indeed, they may exacerbate.

Controversially appointed in 2005, Wolfowitz was a terrible choice for the post. A long-time security hawk, he had no background in development or poverty alleviation.

His claim to fame was as one of the principal proponents of the neo-conservative strategy to go to war in Iraq to reshape the Middle East. He was the Deputy Defence Secretary.

By the time he was nominated, the strategy had resulted in disaster and his boss and mentor, Defence Secretary Mr Donald Rumsfeld, was himself politically isolated.

For the ambitious Wolfowitz, being elevated to Defence Secretary or to National Security Advisor — posts that he had been eyeing — were no longer viable options.

Wanted to test theories

The presidency of the World Bank offered him an opportunity to test his grand theories about shaping the 'hearts and minds' of populations in developing countries who were becoming increasingly distrustful of US foreign policy.

It also allowed President George W Bush a chance to install the most hawkish of hawks at the helm of the one international institution that can intrude into national economic, social and knowledge institutions that have the ability to shape the 'hearts and minds' of people around the world.

Within weeks, the equally unpopular nomination of Mr John Bolton as US ambassador to the United Nations, Wolfowitz's nomination in 2005 shocked the international community.

Coming without any consultations, it was seen as one more example of American arrogance and unilateralism.

World Bank is reform-resistant

As the single largest shareholder of the World Bank (with 16 per cent of the vote in the executive board), the US has traditionally held the right to nominate the president.

The European Union — whose members control a cumulative 30 per cent of the vote — made it clear that they did not like the choice.

Eventually, the Europeans agreed to stick with tradition. As it turns out, their first instinct was correct and the arrangement has crumbled after barely two years. It was not just the scandal about Riza, but also his dictatorial management style, self-promotion, aloofness and suspected hidden agenda.

Now that he is on his way out, will all be well? Not really. Apart from the collateral damage he has inflicted on the institution's reputation and staff morale, the World Bank was a dysfunctional institution even before Wolfowitz.

Its staff seems forever stressed, public image forever tarnished, shareholders (rich countries) forever dissatisfied and its clients (poor countries) forever unhappy.

It would be a pity if the Wolfowitz affair pushes the World Bank deeper into the abyss of institutional angst. It would be equally sad if the opportunity for serious reform afforded by the turn of events were to be missed. Like most international institutions, the World Bank is reform-resistant.

It has failed to resolve its own identity crisis: Is it a bank or development institution? It likes to call itself not just 'a' bank, but also 'the' Bank.

But it is not. Its employees are encouraged to act as bankers; but they are not. Many do not even want to be. The result: It ends up being neither.

Traditionally, the president is an American and the US government chooses him. As the Wolfowitz case has shown, this job is too important to be a partisan political appointment from one country. The fact that the US is the single largest shareholder should never have been the criterion.

If it is to be, then the European Union holds more votes and should have precedence. But are individuals from the richest nations more capable of understanding and implementing the World Bank's mission of global poverty reduction?

Couldn't someone from a developing country do the job better?

The US has already appointed a former Trade Secretary Robert Zoelleck, a sign that change is still far off.

Article Source: http://www.afroarticles.com/article-dashboard

About The Author: Adil Najam -- is an Associate Professor of International Negotiation and Diplomacy at the Fletcher School of Law and Diplomacy of Tufts University, Medford, Massachusetts, in the United States.

| View Profile & All Articles By: Adil Najam |

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