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POLITICS: Washington Passes World Bank Torch

Emad Mekay

WASHINGTON, Jun 25 2007 (IPS) - The World Bank’s board of directors confirmed Robert Zoellick Monday as the lender’s next president, under a World War II-era tacit agreement that gives Washington the privilege of filling the institution’s top job.

The Bank’s 24 board members, who ostensibly represent 185 member countries, unanimously voted for Zoellick, nominated by U.S. President George W. Bush last month. Zoellick was the only candidate running for post. No other country offered a nomination.

Zoellick’s appointment will be effective Jul. 1, making him the 11th president of the Bank for a five-year term.

In its announcement Monday, the board described Zoellick as an international leader with the drive to restore the bank’s credibility, battered by weeks of wrangling with shamed outgoing President Paul Wolfowitz over his unauthorised engineering of a generous raise and promotion for his girlfriend and co-worker Shaha Riza.

The scandal gripped the Bank for weeks and pitted Wolfowitz against the Bank’s staff in an unprecedented public battle that eventually led to Wolfowitz’s resignation.

President Bush, who had previously praised Wolfowitz as a passionate advocate against poverty, said in a statement that Zoellick was “a dynamic leader who is deeply committed to the mission of the World Bank in helping struggling nations to defeat poverty.”

In his own statement, Zoellick sounded a conciliatory tone, contrasting himself with the more combative Wolfowitz.

Zoellick promised to start his tenure by “learning” from stakeholders and reaching out to all players inside and outside the Bank.

“Once I start at the World Bank, I will be eager to meet the people who drive the agenda of overcoming poverty in all regions,” he said. “I know of the staff’s passion for this mission. And I respect the staff’s proud record, continuing search for learning and improvement, and commitment to results.”

Zoellick also acknowledged that the Bank was in need of changes, a call that has been reverberating for years with little real action.

“The world has changed enormously since the creation of the Bank some 60 years ago. This accomplished institution of development, reconstruction, and finance not only needs to adapt: It must lead the way to achieving sustainable globalisation, founded upon inclusive growth, opportunity, and respect for personal dignity,” he said.

But apart from reforming the Bank, other less ambitious and more realistic issues he faces include raising funds for the Bank’s soft-loan arm, the International Development Association (IDA).

Bank officials seek replenishment for the IDA every three years. Now is the 15th round for raising such funds. European countries had threatened to withhold or cut down on their contributions if Wolfowitz stayed on.

Zoellick’s background and resume are somewhat controversial. As the U.S. Trade Representative during Bush’s first term, he was a staunch supporter of agricultural subsidies in developed countries, which even World Bank economists credit for spreading poverty among the world’s farmers.

He also defended U.S. trade related intellectual property rights (TRIPS) that have largely been blamed for keeping life-saving drugs out of reach of poor people across the globe.

It also remains to be seen what his positions will be on a number of critical issues like reproductive health services for poor women, the Bank’s policies on global warming, and corruption.

While Zoellick’s confirmation shuts the door on the Wolfowitz scandal, his selection process has, for many, only served to underline the undemocratic nature of the World Bank presidency.

The unwritten understanding is that the International Monetary Fund’s managing director is always a European while the World Bank president is always a U.S. national.

Analysts as well as advocacy groups had sought to use the opportunity of the Wolfowtiz controversy to draw attention to this elitist mechanism, particularly since both institutions wield enormous power and influence on poor countries and millions of people across the world.

“If we were to create a whole new World Bank for the 21st century, its governance structure would have to comply with modern standards of democratic procedure, bottom-up accountability and transparency. Today, the World Bank has none of these things. That’s why its legitimacy is in tatters,” said Rick Rowden, senior policy analyst with the international advocacy group ActionAid.

“Yet again we see the U.S. government brazenly inserting ‘their guy’ as head of the World Bank in a way that is totally out of step with contemporary norms, standards and expectations about democracy,” he added. “This demonstrates an old world mentality that must change.” *****