At first glance Robert Zoellick, who George Bush nominated to be the next president of the World Bank, could not be more different than his predecessor, Paul Wolfowitz. While both men have been at the heart of Republican-dominated Washington for many years, with careers stretching back into the term of the current President Bush’s father, the two have widely differing personalities.
Wolfowitz, coming from an academic background, was the public face of the administration’s aggressive determination to go to war with Iraq, disdainful of outside voices warning of the dangers. It was Wolfowitz who made what now seem comic predictions about the invasion paying for itself in Iraqi oil revenues and who overestimated the ease of the US occupation.
Zoellick, on the other hand, is a technocrat and a veteran of the rough and tumble of international diplomacy as well as the corridors of power in Washington. While Wolfowitz’s career advanced under the aegis of the pugnacious Dick Cheney, Zoellick’s progress followed that of James Baker, the consummate Republican insider.
Yet Washington is a remarkably small town and the two men do share some historical footnotes. Wolfowitz and Zoellick were two of the 18 signatories to a letter to the then President Bill Clinton in 1998 that called for the overthrow of Saddam Hussein — a letter which, in retrospect, suggested that senior members of the Bush administration were itching to attack Iraq. And both men also served in the informal group known as the “Vulcans”, convened by Condoleezza Rice to advise George Bush on foreign policy before the 2000 presidential election.
At the time of the younger Bush’s election Zoellick was serving as a fellow of the German Marshall Fund, a non-partisan international relations think tank in Washington, but after Bush’s election he sought the post of US trade representative, a cabinet- level position that serves as government’s leading envoy on trade negotiations.
The job as trade envoy sidelined him from the debate about US foreign policy, but as the author James Mann observed in his book Rise of the Vulcans: “Zoellick was one Vulcan who simply did not fit in with the new team or its interests.” It was Zoellick who had steered Bush as a candidate away from the aim of “nation building” in US foreign policy — a position that put him at odds with the neoconservative camp that included Wolfowitz after September 11.
Unlike the rest of the Vulcans, Zoellick had experience as a diplomat, having served in the US state department as an undersecretary from 1989 to 1992, during which time he played a key role in helping to guide the reunification of East and West Germany. As the representative of the US government he is said to have persuaded the elder President Bush to back reunification at a time when other US allies were ambiguous. A former state department official was quoted by the New York Times as saying that Zoellick “gets a lot of credit for the fact that the Cold War ended with a whimper”.
Colleagues describe Zoellick as a master of details, as well as being an impressive thinker, and he lobbied hard to get the role as US trade envoy.
There he robustly defended US economic interests, calling for lower trade barriers and free markets in goods and services. Some of Zoellick’s arguments in favour of free trade may come back to haunt him in his new position, offering ammunition to those who see the bank as a tool of US economic policy.
Shortly after 9/11, he gave a speech in favour of open markets that linked free trade and fighting terrorism: “Let me be clear where I stand. Erecting new barriers and closing old borders will not help the impoverished … It will not aid the committed Indonesians I visited who are trying to build a functioning, tolerant democracy in the largest Muslim nation in the world. And it certainly will not placate terrorists.”
Later, after the collapse of World Trade Organisation (WTO) talks during a meeting in Cancun, Zoellick wrote an article that lambasted the US’s opponents: “The key division at Cancun was between the can-do and the won’t-do. For over two years, the US has pushed to open markets globally, in our hemisphere and with subregions or individual countries. As WTO members ponder the future, the US will not wait: we will move towards free trade with can-do countries.”
Others recall Zoellick as a tough negotiator who would win arguments “through the power of his intellect, not the raw political power of the US”. The 53-year-old will need all his negotiating ability and off-beat sense of humour in his new job. But his previous experience at the US Treasury and five-year stint as vice-president of Fannie Mae, the giant government sponsored mortgage financier, will also help, as will his last position in government, as deputy secretary of state under Rice. Zoellick remained in that post for little over a year, and seemed at odds with the Bush administration over its pro-democracy agenda, running what some called “a mini state department”. He left in July last year for the highly paid embrace of the investment bank Goldman Sachs.
At the bank, Zoellick will find a battered institution without a clear sense of direction. Sections of the bank, such as its international financing corporation arm that lends to the private sector, have outlived their usefulness. Kenneth Rogoff, a former chief economist at the International Monetary Fund, says the bank needs to do two things: move away from making loans towards giving grants to developing countries, and reverse the “mission creep” that has overextended the bank beyond its resources.
To many, however, the most important reform the bank needs is to change the method of appointing its president. Since its creation in 1944 the US has insisted on appointing the bank’s president, and left the choice of head of the IMF to Europe. After the Wolfowitz debacle many of the World Bank’s member governments feel that Zoellick should be the last American to be named to the post by right rather than by ability. If Zoellick can convince critics that he deserves the job in any case then he will have achieved some success. To do so he will need to curb what some former colleagues describe as a combative management style.
At the top of Zoellick’s in-tray will be the tricky issue of dealing with Shaha Riza, the companion whose pay rises and promotions led to Wolfowitz’s downfall as president. Under the terms of her secondment, Riza can return to working at the bank upon Wolfowitz’s departure, although that seems hard to envisage after the controversy. The good news is that Zoellick’s wife, Sherry, does not work at the World Bank. — Â