Business
ANALYSIS - World Bank chafes under Wolfowitz changes
January 30, 2006
By Lesley Wroughton
WASHINGTON (Reuters) - Paul Wolfowitz is sending shock waves through the World Bank as he begins exerting his influence -- starting with a crackdown on corruption -- less than a year after arriving from the Pentagon with a reputation as a neoconservative ideologue.
Wolfowitz's nomination by President George W. Bush to head the world's largest development lender was controversial from the start because of his role as an architect of the Iraq war.
Eight months into his tenure, critics, including veteran bank officials who have left in an exodus of managers, say Wolfowitz has centralized his authority through an inner circle of advisors mostly from the Pentagon and White House.
They cite two recent appointments -- both American Republicans -- to key positions. Suzanne Rich Folsom became director of Institutional Integrity, the bank's anti-corruption unit, and Kevin Kellems, a former advisor to U.S. Vice President Dick Cheney, was named to the strategic advisory post of director of external relations.
A recent letter by the World Bank Staff Association questioned the appointments, and the bank's 24-member board of member nations has urged Wolfowitz to step up the search to fill senior management positions.
The bank's No. 2 position of managing director has been vacant since December when Shengman Zhang, the bank's operations chief, left for the private sector, causing anxiety over who will fill his post.
In a recent interview with Reuters, Wolfowitz said he had launched a global search to fill Zhang's post, opening a traditionally closed decision-making process that member countries in the developing world have long complained about.
On Nov. 29 Wolfowitz appointed a staff committee led by Graeme Wheeler, a former New Zealand treasury official and the bank's treasurer, to look for candidates to fill Shengman's post. Wheeler, widely respected in the bank, is also acting managing director.
Wolfowitz's predecessor, James Wolfensohn, also had a volatile first year of friction with senior managers and staff as he tried to reform the institution.
SHAKE-UP ARTIST
Analysts who have followed his career say Wolfowitz has a history of forcing unpopular ideas and strategies on resistant audiences.
"He has always taken the role of a controversial visionary whose job is to articulate a new path forward to people who don't want hear it," said Loren Thompson of the Lexington Institute, a research group in Arlington, Virginia, with close ties to the Pentagon.
"Wolfowitz at the Pentagon felt that if people were happy with what he was doing then he must not be doing it right. So I'm not surprised he has brought much of the same demeanor to the World Bank."
>From the start of his World Bank tenure, Wolfowitz has presented two
faces -- a public image of the listening, caring development chief who
championed debt relief for some of the world's poorest countries, while
privately engineering an overhaul of World Bank operations from the inside.
His first foreign trip was to Africa, meeting government leaders, women's groups and business officials in Nigeria, Burkina Faso, Rwanda and South Africa, and also demonstrating a common touch by wading into crowds.
Behind World Bank doors, though, Wolfowitz's advisors had already started flexing their muscles. Robin Cleveland, a former White House official and now Wolfowitz's chief adviser, has closely scrutinized projects and strategies, and halted some she had concerns about.
In the Reuters interview, Wolfowitz said the bank "has gone from an era where nobody wanted to say no to anything ... to an era when people have to be encouraged that if there are serious problems they bring them forward and saying 'no' is a good thing."
To Thompson, the influence of top aides is classic Wolfowitz.
"He is the sort of person who needs an operator or an implementer in order to make the vision real," Thompson said.
More recently, Wolfowitz made his first major public shift by halting all World Bank loans to Chad in a dispute over the government's grab for oil profits from a huge multinational pipeline project. He also delayed possible loans for Bangladesh and Kenya due to concerns about corruption.
The Chad decision generated both plaudits and friction, with the resignation of the bank's chief lawyer, Roberto Danino.
Allan Meltzer, a political economy professor at Carnegie Mellon University who headed a 1999 U.S. commission that examined reforms in the World Bank and International Monetary Fund, said Wolfowitz invited problems because of his management style.
Wolfowitz "has appointed a lot of people at the top of the bank to work with him and they are all Americans," said Meltzer. "One doesn't have to be aware of foreign affairs to know that Americans are not the most popular people in the world, especially in running things."