Hidden Power

3 January 2005



Wolfensohn Likely to Leave World Bank

Much has been made of President Bush’s capacity to influence the American court system for the next generation by the appointments he can make in the next four years. However, he also has an opportunity to change the world economy with a single appointment, a far more important change to the world’s poor. Naturalized American James Wolfensohn finishes his second five-year term as head of the World Bank this year, and by custom, the job goes to a Yank. Which Yank gets the job will heavily influence world capital flows for years.

Mr. Wolfensohn is largely regarded as very successful in focusing the Bank’s operations on the needs of the poor. He’s been an anti-corruption leader and has tried with mixed results to get the debt of the poorest nations in the world reduced if not written off. But he was appointed by President Clinton, and he has had rocky relations with the Bush White House.

While there is no rule that requires him to step down, it is certain that the current American administration doesn’t want him around for five more years. Since the 184 shareholder nations that fund the World Bank have the final say, one might think 1600 Pennsylvania Avenue doesn’t matter much. However, since the founding of the World Bank, and its sister body the IMF, only Americans run the bank and only Europeans run the IMF. As unpopular as Mr. Bush may be in some corners, no change should arise because that would threaten Europe’s hold on the IMF top job.

It is a little early to start talking about who will get the World Bank appointment, but US Trade Representative Robert Zoellick’s name has already come up in foreign policy and economic circles. Alan Greenspan has an outside chance, since his time at the Fed is ending, but he’s getting on in years as well. More likely, the Bush administration will look to the financial sector for talent.

Whoever gets the job, the candidate will have to pass muster with the GOP ideology watch dogs. The litmus tests are pro-private sector, maybe some reliance of faith-based entities, and development based on free trade. The potential for changing the shape of the world’s economy, especially as the focus for much of this year will be on tsunami relief and recovery, is clear. Mr. Bush will leave his mark here as well.



© Copyright 2005 by The Kensington Review, J. Myhre, Editor. No part of this publication may be reproduced without written consent.

Home

Google
WWW Kensington Review







Amazon Honor System Click Here to Pay Learn More