Paul D. Wolfowitz, the U.S. Deputy Secretary of Defense and an architect of the Iraq War, is President George W. Bush's nominee to head the World Bank.
Wolfowitz would replace James Wolfensohn, 71, who is retiring when his five-year term ends May 31. The nomination, which by tradition is made by the U.S., must be approved by the World Bank's 184 member countries.
At the Pentagon, Wolfowitz, 61, was a strong advocate of the Iraq war, calling for toppling Saddam Hussein and helping the administration craft its rationale for the invasion in the face of strong opposition from Spain, France and Germany. At a White House news conference today, Bush called Wolfowitz a proven leader and a ``skilled diplomat.''
``The truth of the matter is that Paul Wolfowitz is better qualified to be at the World Bank than many other possible candidates,'' said Edwin Truman, former assistant secretary for international affairs at the U.S. Treasury under President Bill Clinton. ``On the other hand, he comes with a lot of baggage.''
At the World Bank, the largest financier of development projects, Bush will use Wolfowitz to scale back Wolfensohn's projects, said Allan Meltzer, who chaired a congressional panel on the World Bank in 2000. That may include an overhaul of the bank's $20 billion annual lending operation and changes to more effectively manage the lender's more than 10,000 employees scattered in 109 nations, he said.
Bush ``is spreading his neoconservative friends away from the administration toward international institutions,'' said Jonathan Eyal, director of studies at the Royal United Services Institute in London, a military think tank.
Muted Enthusiasm
European members of the World Bank hold a combined 30 percent voting stake in the institution.
``The storm of enthusiasm in old Europe is muted,'' German Development Minister Heidemarie Wieczorek-Zuel said.
France's Foreign Minister Michel Barnier said his country will look at Wolfowitz's nomination ``and look equally at other candidates.''
Wolfowitz's nomination is the second time the U.S. turned to the Pentagon to seek a candidate for the World Bank. Former Defense Secretary Robert McNamara headed the institution from 1968 to 1981.
The parallels with ``McNamara -- the brilliant Vietnam era Secretary of Defense turned global development statesman -- are difficult to escape,'' said Ken Rogoff, a former International Monetary Fund chief economist. Wolfowitz has ``a very controversial international image.''
Wolfowitz would the 10th president since the World Bank was founded after World War II. The U.S. nominee for the position has never been rejected.
A `Bolshevik of Democracy'
``The French will accept the candidacy of Wolfowitz without enthusiasm,'' said Dominique Moisi, deputy director of the French Institute for International Relations in Paris. ``They will ask something in return,'' such as the appointment of Pascal Lamy at the head of the World trade Organization.
``He won't necessarily be well understood in what used to be called third world countries'' because he's seen as ``a western ideologist, a bit of a Bolshevik of democracy,'' Moisi said.
Wolfowitz is ``one who makes no bones about trying to impose U.S. foreign policy on countries around the world,'' said Soren Ambrose, a policy analyst at Washington-based 50 Years is Enough, which seeks to overhaul World Bank policies. ``It's what the World Bank has been doing for 25 years and now we'll have a bank that acknowledges that.''
The World Bank's board has received Wolfowitz's nomination and is ``in the process of consultations with the member countries they represent,'' the bank said in a statement.
A Welcome Change
Others welcomed the change.
``He's a strong-minded man,'' said Meltzer, who is now a Carnegie Mellon economics professor. Unlike Wolfensohn, ``Paul Wolfowitz is the kind of person who is likely to look to have a focus.''
Other candidates for the World Bank position included former Hewlett-Packard Co. Chief Executive Officer Carly Fiorina and Bush administration AIDS policy chief Randall Tobias.
In an interview today in Washington, Wolfensohn called Wolfowitz ``someone of high intellect, broad experience in and out of government and he has many of the qualifications needed to lead the bank.''
Political Tact
Prior to the Iraq war, Wolfowitz said Iraq's oil reserves ``are the property of the Iraqi people and critical for their post-Saddam reconstruction and rehabilitation,'' suggesting the country could repay the cost of the invasion from oil revenue.
In June, he was forced to apologize after saying journalists in Baghdad published rumors because they were afraid to travel in the country.
He pushed a hard-line policy against Iraqi aggression in Kuwait during the Gulf War, then played a negotiating role after its end, seeking to strengthen Saudi Arabia's military capabilities and reduce arms sales to the region.
A critic of Clinton's approach toward China and Russia, Wolfowitz urged tougher stances on those countries' missile transfers to Iran.
``There's no question about his intellect. There's a big question about his political tact,'' said Eyal. ``Although the appointment will clearly stick in the gullets of many European governments, especially the French and Germans, they will not come into the open.''
World Bank Focus
The nominations of Wolfowitz to the World Bank today and John Bolton last week as U.S. representative to the United Nations suggests Bush ``is throwing down the gauntlet and telling Europeans `we'll do anything we want,''' Ambrose said.
Responding to a report in the Financial Times earlier this month that Wolfowitz was a candidate for the World Bank, a Defense Department spokesman said he would remain at the Pentagon. ``Secretary Wolfowitz has been asked to stay on in an extremely important job, one that he likes doing very much,'' Defense Department spokesman Larry DiRita said March 1.
Under Wolfowitz, the Bush administration may now try to narrow the focus of the World Bank, returning the international lending institution to its roots of primarily financing large infrastructure projects and limiting the practice of handing out zero-interest loans, Meltzer said.
The lender broadened its scope under Wolfensohn, who sought a more ``humanizing'' role for the bank, according to Joseph Stiglitz, a Nobel Prize-winning economics professor at Columbia University in New York and a former chief economist of the World Bank.
Bush Legacy
Since taking over as World Bank president in 1995, Wolfensohn cut by 40 percent financing for dams, bridges and infrastructure projects, and shifted that money to programs promoting climate change and development.
``What the Bank needs most now is a president willing to set priorities and make choices, rather than rolling from one development fad to another,'' said Rogoff, now a professor at Harvard University. He will have strong support from Bush, ``who wants very much to leave a legacy of having helped pull the Third World out of poverty.''
Bush named Wolfowitz as deputy to Defense Secretary Donald Rumsfeld in February 2001. Then dean of Johns Hopkins University School of Advanced International Studies, Wolfowitz was a veteran of both the State and Defense Departments.
He served as undersecretary of policy for Vice President Dick Cheney when Cheney headed the Pentagon during the administration of President George H.W. Bush, the current president's father.
From 1986 to 1989, Wolfowitz was the U.S. ambassador to Indonesia, and assistant secretary of state for East Asian and Pacific Affairs from 1982 to 1986. He worked on arms control and disarmament issues in federal agencies in the 1970s.
From 1995 to 2001, Wolfowitz was a director of toymaker Hasbro Inc. He received a master's degree in administration and a doctorate in political science and economics from the University of Chicago.
To contact the reporter on this story:Last Updated: March 16, 2005
Simon Kennedy in Washington at skennedy4@bloomberg.net
Julie Ziegler in Washington at jziegler@bloomberg.net
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