http://www.economist.com/agenda/displayStory.cfm?story_id=3763922 A hawk to ruffle the World Bank's feathers
Mar 17th 2005
From The Economist Global Agenda
George Bush has nominated Paul Wolfowitz, one of the main architects of the Iraq war, to run the World Bank. Though this is normally America??s prerogative, Europeans and others may object to the candidacy of so hawkish a figure
FOREIGNERS can be forgiven for not knowing what to make of George Bush in his second term. On one hand, he and his secretary of state, Condoleezza Rice, have made mollifying trips to Europe, trying to reassure America??s oldest allies that despite the Iraq war, it wants to remain friends. On the other hand, contrition is not one of Mr Bush??s strongest characteristics. Last week he nominated John Bolton, one of the State Department??s leading hawks and an outspoken critic of the United Nations, to be America??s ambassador to the UN. With Europeans still scratching their heads about that choice, Mr Bush has surprised them again by nominating Paul Wolfowitz, one of the chief architects of the Iraq war, to head the World Bank.
By tradition, the Europeans name the head of the International Monetary Fund, and the Americans pick the boss of the World Bank. This arrangement worked well for some time, but five years ago America blocked the Europeans?? choice to run the IMF, Caio Koch-Weser, and the job eventually went to Horst Köhler (who has since become Germany??s president).
Will the Europeans now try to block the controversial Mr Wolfowitz? Reuters news agency reported on Wednesday March 16th, the day the nomination was announced, that Mr Wolfowitz??s name had already been unofficially floated among members of the Bank??s board, and rejected. The reaction to his nomination in Europe ranged from mildly positive to hostile. As Germany's development minister, Heidemarie Wieczorek-Zeul, put it: ??Enthusiasm in old Europe is rather limited.? But there may be little the Europeans can do to stop Mr Wolfowitz taking the Bank's reins, as America is its biggest shareholder and the second-biggest, Japan, has backed Mr Bush's man.
At a press conference on Wednesday, the president described his nominee as ??a compassionate, decent man? and a ??skilled diplomat?. Mr Wolfowitz, who is currently America??s deputy secretary of defence, has had several stints in government. In the late 1980s he was America's ambassador to Indonesia, where he came to love the culture of the world??s most populous Muslim country.
But Mr Wolfowitz is also a favoured bogeyman of critics of the Iraq war. He is the best known of the ??neoconservatives?, a group of Washington policymakers who believe that American power must be used to spread democracy and American values. He was a passionate advocate of moving against Iraq soon after the terrorist attacks of September 11th 2001, believing not only that Saddam Hussein had weapons of mass destruction, but that the lack of democracy in the Middle East was a key reason why the region had become a breeding ground for terrorism.
If Mr Wolfowitz was controversial in the run-up to the war, he has become even more so since. In late 2003, he signed a memorandum banning Pentagon contracts for Iraq??s reconstruction being given to countries that had opposed the war. Moreover, his pre-war estimates for how much the conflict would cost and how many troops it would require turned out to be wildly optimistic??as was his prediction that Iraqis would welcome coalition forces as liberators.
A revolution in development?
At the World Bank, Mr Wolfowitz will be dealing not with tank divisions and theories of deterrence but rather with using America??s ??soft power? to tackle poverty. Two well-known development economists, Jeffrey Sachs and Joseph Stiglitz, have bemoaned his nomination, as have the world's aid agencies. But Mr Wolfowitz's lack of experience in the development community does not necessarily make him a bad candidate. Having served under Donald Rumsfeld during the controversial ??Revolution in Military Affairs?, Mr Wolfowitz might, some argue, be well placed to bring radical change to an organisation sorely in need of it.
The World Bank has spent much of the past decade responding to charges that its funding did little to achieve its primary mission: helping developing countries to grow their way out of poverty. The conventional wisdom is that aid is of little benefit unless the recipient country is a model of political and economic rectitude. These are hard qualities to find in a developing nation, and many complained that the Bank wasn??t looking very hard, preferring the showy headlines of massive infrastructure projects to the tedious slog of gradual poverty reduction.
James Wolfensohn, the Bank??s outgoing president, has worked hard to ensure better allocation of its funds during his decade at the helm. More money now goes to countries with good policies than bad. And he has placed more emphasis on fighting poverty, less on dams and superhighways to nowhere. But the Bank still lends lots of money to middle-income countries that arguably don??t need it, and to poor ones that can??t use it because their governments steal or squander any funds that come their way.
Mr Wolfowitz has certainly demonstrated that he can articulate and put into practice a bold vision. But some worry that his desire to push democracy sits uncomfortably with the Bank's mission. His belief in the power of political freedom will colour his views of economic development as well. But is this the right agenda for the Bank, whose job is to spread prosperity? And the relationship between democratic reform and poverty alleviation is complicated. The most successful poverty reduction in the past generation, after all, is in communist China.
A related worry is that Mr Wolfowitz will not be able to separate himself from the White House. It is perhaps instructive to look at the history of another man who came out of America??s defence department to head the World Bank: Robert McNamara, who as defence secretary was an architect of the Vietnam war. Mr McNamara was accused of picking aid recipients based on their support for America??s foreign policy, rather than their suitability for assistance.
Mr Wolfowitz's nomination may be as important for what it says about the Bush administration as for the future of the Bank itself. Is the administration trying to show Europe, as some have claimed, that America doesn't care what its allies think? Perhaps. But there is a more heartening possibility: that Mr Bush is sending out his trusted deputies to the World Bank and the UN because he is interested in getting things done in the global arena.
A boost for the latter theory came on Thursday, when Mr Bush nominated a new trade representative to replace Robert Zoellick. His nominee, Rob Portman, comes with strong credentials. A trade lawyer before becoming a congressman, representing Ohio, he has served on the House Ways and Means subcommittee on trade. He looks like the administration's best bet for pushing the Central America Free Trade Agreement through Congress. It will also be a lot easier to salvage the Doha round of world trade talks if America's top trade representative can finesse his country's legislators.
This does not, of course, erase concerns about just whose team Mr Wolfowitz is playing on. But it is a hopeful sign that the coach has his eyes on the right prize.
