Tuesday, May 15, 2007

After Wolkowitz (who did not come from either a banking or development backiground, but was simply a favored crony of Bush)

After Wolfowitz
Le Monde | Editorial

Saturday 12 May 2007

Accused of nepotism, Paul Wolfowitz logically ought to vacate his functions very soon. The World Bank president had put good governance and the fight against corruption at the center of his action in poor countries. But by intervening in such a way that his companion be detached to the State Department and her salary greatly increased in contempt of internal regulations, he lost all credibility. The European countries are convinced of it. The American president, on the other hand, is not. Now, according to the old role-sharing understanding, the American president is the one who names the new World Bank president, while the Europeans chose the International Monetary Fund boss.

The present crisis ought to be the opportunity to modify the governance of these two institutions. In a world in which Asia is becoming the planet's premier creditor, this transatlantic monopoly is not only obsolete, but also harmful. It suggests that Westerners want, despite all opposition, to remain "masters of the globe." Above all, there is no reason for the presidents of the World Bank and the IMF to be named purely on the basis of political criteria.

Yet, at present, that is the case. Mr. Wolfowitz would never have obtained this position had his candidacy been put in competition with others. He is neither a banker nor a development specialist, the two competencies that one has a right to expect from the World Bank boss. A specialist in strategic and defense questions, he was one of George W. Bush's principal advisers after 9/11. The president wanted to reward a faithful follower, and he hesitates to drop him today so as not to suffer yet another reversal.

However, there is no lack of competent candidates. Some, like Nobel Prize-winning economist and former World Bank President Joseph Stiglitz, mention Brazilian central banker Antonio Fraga or former Turkish Finance Minister Kermal Dervis. Others suggest the names of South African Finance Minister Trevor Manuel, or even Bill Clinton or Tony Blair.

Up until now, the Europeans have been hiding behind the White House. This is wrong. At the bank's board of directors, together the Europeans have 28.9% of the votes (including 4.3% for France) versus 16.4% for the United States. Nothing prohibits the Europeans from putting the American shareholder into the minority. That would provoke a crisis, but it could be a salutary one.

Nicolas Sarkozy, who deems that his closeness to the United States allows him to deliver messages to Washington that are not always pleasant to hear, could find an opportunity in this situation to make a brilliant entrance onto the international scene by making himself simultaneously the messenger for Europe and for the oppressed.


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