The right (wing) man for the World
Bank job By Emad Mekay
WASHINGTON - With US President George W
Bush nominating Robert Zoellick to succeed World
Bank president Paul Wolfowitz, who steps down on
June 30, speculation has been cut short about a
process that saw dozens of names floated to be the
next leader of the international public lender,
now reeling from an ethics scandal.
"Bob
Zoellick is the right man to succeed Paul in this
vital work,"
Bush
said on Wednesday.
After the announcement,
Zoellick, a Wall Street executive, former
administration official and a free-market
fundamentalist, pledged to work to restore
confidence in the bank.
Revelations that Wolfowitz
had given his girlfriend and colleague Shaha Riza
an unauthorized pay raise had led to calls from
bank staff, international economists and many
countries for Wolfowitz' ouster.
"We need
to put [the] discord behind us and focus on the
future together. I believe that the World Bank's
best days are still to come," Zoellick said.
The bank's 24-member board of directors,
which should receive a formal notice of the
nomination before mid-June, says it will make its
final decision by the end of the month.
Zoellick is likely to be confirmed under a
tacit agreement between the two powers that
control the bank's board, the United States and
Europe, that the bank's president should always be
a US national while its sister institution, the
International Monetary Fund, is headed by a
European.
The nomination also appears to
short-circuit burgeoning calls for reform of this
selection process at the bank, one of the
cornerstones of the global financial architecture
as designed by the victors of World War II.
On Wednesday, the Center for Global
Development, a Washington-based think-tank,
released a survey showing that nearly 85% of 700
respondents disagreed or strongly disagreed with
continuing the status quo, in which the US
nominates a single candidate after informal
consultations with bank members.
A similar
number favored a merit-based selection process,
without regard to nationality.
The survey
was conducted among members of the international
development community, including government
agencies, universities and think-tanks,
non-governmental organizations (NGOs), and staff
at the World Bank and other multilateral
institutions.
NGOs that have been at the
forefront in calling for reform of the selection
process say Zoellick's nomination is a blow to
their campaign to bring greater democracy to the
bank. They say the nomination reeks of double
standards, especially because both the US and the
World Bank preach accountability and transparency
to developing countries, the main clients of the
bank.
"Replacing one Bush appointee with
another will not resolve the fundamental
governance problems of the World Bank," said Peter
Bosshard, policy director of the International
Rivers Network, a watchdog group that monitors
bank projects and policies from San Francisco.
"Member governments should reject a
back-door deal that leaves the bank's governance
structure intact, and should press for an open,
merit-based selection process," he said.
Zoellick's name also raised eyebrows among
development groups for his close ties to the US
establishment and corporate interests.
Until last July, Zoellick, now 53, was the US
deputy secretary of state. He is best known, however,
for his role as a former US Trade
Representative (USTR), a job in which he campaigned, with
mixed results, to force developing countries to
open their markets to US businesses and goods.
He is credited with helping bring mainland China
and Taiwan into the World Trade Organization,
which, like the World Bank and the IMF,
often promotes neo-liberal policies criticized
as harmful to developing countries. Zoellick
also launched the unpopular multilateral Doha
Round of trade talks at the WTO, aimed at creating
a laissez-faire trade environment, and increased
the number of US free trade agreements.
Zoellick also lacks significant experience
in economic development in poor countries. During
his tenure as the USTR, he was often criticized
for arm-twisting poor nations' governments to
adhere to US-imposed intellectual-property laws
that make medicines unaffordable to the developing
world.
"He has been a close friend to the
brand-name pharmaceutical industry, and the
bilateral trade agreements he has negotiated
effectively block access to generic medication for
millions of people," said Paul Zeitz, executive
director of the Global AIDS Alliance. "This is
terrible for AIDS patients, most of whom cannot
afford brand-name prices."
Zoellick's
nomination has been particularly troubling for
civil-society groups, which fear that Zoellick,
currently a top executive with the Wall Street
investment firm Goldman Sachs, may alter the World
Bank's practice of allowing countries to use its
aid to purchase generic medications.
The
bank has previously defended the right of such
countries as Thailand to issue compulsory licenses
to secure access to affordable medications. "We
fear this could change under Zoellick," Zeitz
said. "Zoellick, as a free-market fundamentalist,
seems unlikely to back the kind of flexible
macroeconomic policy countries need to increase
their health-sector budgets in the face of the
AIDS crisis."
Apart from his White House
backing, Zoellick got immediate support from US
Treasury Secretary Henry Paulson and some senior
US lawmakers.
Senator Chuck Grassley,
Republican ranking member of the Senate Committee
on Finance, said Zoellick is "extremely capable"
of leading the bank.
"Through his
leadership for international trade, I know he has
a real understanding of what it takes to advance
economic development in poor countries," he said
in a statement.
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