For World Bank, Wolfowitz crisis is ill-timed
At war with his staff and propped up by an unpopular US administration, scandal-hit World Bank president Paul Wolfowitz faces a crisis of credibility just under two years into his stormy tenure.
By Agencies |
WASHINGTON: At war with his staff and propped up by an unpopular US administration, scandal-hit World Bank president Paul Wolfowitz faces a crisis of credibility just under two years into his stormy tenure.
For many observers, the moral authority of the former US deputy defense secretary is in shreds at a time when the 185-member organization risks irrelevancy six decades after it was created to combat poverty.
"If he stays, he's so enfeebled that he can't execute the job," argued Manish Bapna, director of the Bank Information Center, an independent group which tracks World Bank affairs."For those who are committed to the institution playing an important role in alleviating global poverty, he should do the right thing and resign," he told agencies.
The scandal engulfing Wolfowitz about hefty pay hikes that he ordered for his Libyan-born girlfriend, Shaha Riza, overshadowed weekend meetings of the bank and its partner, the International Monetary Fund.
The controversy has erupted at the worst time for Wolfowitz when he is battling to overcome resistance to his flagship campaign against corruption in the World Bank's 24-billion-dollar annual lending.It also risks undermining his efforts to replenish the bank's depleted lending budget by raising up to 25 billion dollars in new funds from its richer members.
Due to promises of debt relief by the Group of Eight (G8) nations, the bank and the IMF have lost billions in income from repayments on loans given to borrowers in the developing world.So after a series of battles with countries' directors on the World Bank board over his anti-corruption drive and his management style, Wolfowitz is having to go cap in hand to those very donors.
Wolfowitz must now "decide for himself whether he can continue to fulfill his duties credibly given that mistake (over Riza)," German development minister Heidemarie Wieczorek-Zeul told reporters. The World Bank staff association says Wolfowitz has "destroyed" the trust of employees and should "act honorably and resign." The institution cannot "move forward with any sense of purpose under the present leadership," it said.
Documents released by the bank's 24 executive directors have exposed Wolfowitz's hand in a pay package worth nearly 200,000 dollars that was awarded to Riza, when she was reassigned to the US State Department in September 2005 to prevent any conflicts of interest with her new boss.
Wolfowitz does enjoy the backing of the White House, which said Friday that President George W. Bush "fully supports Wolfowitz and wants him to continue his service as World Bank president."
Bush's nomination two years ago of Wolfowitz for the World Bank was always controversial given his role in driving forward the war in Iraq.
Despite what he calls his "passion" for development work, particularly in Africa, Wolfowitz was quick to ruffle feathers by bringing in Republican Party allies to key posts in his inner circle.
One appointee was Robin Cleveland, a senior White House official involved in post-war Iraq planning, and another was Kevin Kellems, formerly spokesman for Vice President Dick Cheney. A downcast Wolfowitz, apologizing Thursday for the Riza affair, said he accepted the need to clarify the roles of his coterie of close advisors.
But the institution itself risks a slide into what one staffer called "obscurity and irrelevance" for all but a handful of the poorest countries, given the rise of fast-emerging powers like China.
Francois Bourguignon, the World Bank's respected chief economist, told the Financial Times that the future efficacy of the bank "may be hurt by what is going on today."
"What we have to hope for is that there will be a quick resolution -- whether that resolution goes in one direction or it goes in another direction."
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