World Bank to meet this week on Wolfowitz future
The World Bank has never fired its president in its more than 60-year history. That could change this week.
The bank’s board of shareholder nations will meet as soon as Tuesday, possibly followed by a second meeting, to decide whether Paul Wolfowitz will be forced out or given the chance to negotiate his departure, according to board sources who declined to be identified.
According to the sources, it is virtually impossible for Wolfowitz to stay on as president for the rest of his term because of the damage to the bank’s credibility and its ability to be effective in its mission to reduce global poverty.
Controversy surrounding Wolfowitz’s role in a lucrative promotion for his girlfriend, World Bank Middle East expert Shaha Riza, has paralysed the institution for more than a month.
The bank’s employee association said the promotion and raise received by Riza broke staff rules and showed an abuse of power by Wolfowitz, a former deputy United States defence secretary who was a key architect of the US invasion of Iraq.
Wolfowitz responded that he was the victim of a smear campaign designed to discredit his leadership of the institution and undermine his campaign to position the bank at the forefront of fighting corruption in developing countries.
A special panel appointed by the board to investigate Riza’s promotion will report its findings to the bank board this week, but board sources said there is too much damage done and Wolfowitz will have to go.
Board sources said on Sunday there was no evidence that the panel had completed its work, and no report had yet been widely circulated among the 24-nation board chaired by Germany.
There are no rules to determine the dismissal of a World Bank chief because it never has happened before. The bank board has the authority to appoint and to fire the president, who is traditionally nominated by the United States. A decision could be made by consensus or determined by a simple majority vote of 51%. The United States holds around 16%.
The controversy exposed a lingering dislike for Wolfowitz among World bank staff and member countries due to his role in the Iraq war. A dependence by Wolfowitz on a coterie of aides he brought from the Pentagon and White House worsened his standing by isolating him from the bank management structure filled with career staffers.
Wolfowitz sought guidance from the board’s ethics committee on how to deal with possible conflict of interest issues over his relationship with Riza when he joined the bank in 2005.
The committee advised him to arrange for her transfer to an outside job with a promotion to compensate for her forced move outside the bank.
Wolfowitz said he followed that guidance, but the former head of the ethics committee complained Wolfowitz improperly handled the arrangement and never notified the panel of his actions. In response, Wolfowitz called such criticism “grossly unfair and wrong” by suggesting he intended to mislead anyone.
The controversy also has raised questions about the bank’s traditional management procedures, especially the selection process of its president and the transparency of the board.
Since the bank’s inception after World War II, the United States has always nominated the president without objection while the head of its sister institution, the International Monetary Fund, has always been a European.
US President George Bush has repeatedly expressed support for Wolfowitz’s leadership of the bank, while European members have voiced concern over how the controversy has damaged the institution’s credibility. - Reuters