By Cornwell, Rupert
The Independent on Sunday (London, England)
The lobbying, and the subtle jostling for position are well under way. In Washington wine bars, names are bandied around like chips on a poker table. And no wonder. In the next three months, President George Bush will make one of the most important appointments of his second term when he names a new president of the World Bank.
Even in normal times, the post is hugely important. For all its detractors, the Bank remains the flagship global institution of development. After 9/11, that role became more important still.
This time the rumoured candidates are an especially intriguing mix. They include a controversial Pentagon official, a dethroned corporate diva, a rock star, a top US Treasury official and - some fondly hope - the former secretary of state, Colin Powell. The outcome is anyone's guess. But one thing is certain. Whoever is chosen will have a hard act to follow.
For the past 10 years, James Wolfensohn, a cello-playing former Wall Street investment banker and world-class schmoozer, has led the Bank in idiosyncratic and probably inimitable fashion. By turns domineering, generous, vain and inspirational, the Australian has given the institution its highest profile since Robert McNamara, a former US defense secretary, was president three decades ago, atoning for his role in the disaster of Vietnam.
Wolfensohn's management style has often been chaotic, frequently creating turmoil at the Bank's headquarters a couple of blocks from the White House. But he used the job brilliantly as a bully pulpit, invoking the political and moral urgency of the struggle against poverty. As Nancy Birdsall, the head of the Center for Global Development think-tank, puts it, he "rescued the Bank from its sinking reputation as an insider institution" that had peddled needlessly tough policies causing more pain than gain for its supposed beneficiaries.
Wolfensohn saw off the discredited neo-liberal "Washington consensus" of the late 1980s, that "structural adjustment", ie balanced budgets and rigorous market orthodoxy, was the best means of helping the world's poor. Within the Bank, he pushed through decentralisation, handing more power to locally based country directors.
He championed, with growing success, the cancelling of debt owed by the poorest borrowers which would never be able to repay them. He was the first Bank president to directly address Third World corruption, previously referred to by euphemisms such as "implicit taxes" or "sub-optimal procurement".
Last but not least, Wolfensohn made peace with many (but not all) non- governmental organisations. In this way, he deflected the NGO attacks that had done so much to seal the Bank's image as a cold- hearted bureaucracy, dominated by its Western shareholders and remote from those it was supposed to serve, insensitive to the environmental and human cost of its projects.
But it hasn't been easy. Often the Bank has been caught between a rock and a hard place, assailed from the right as a typically inefficient public- sector beast, and from the left as an agent of, in general, an uncaring capitalism, and in particular, of the US, the Bank's largest shareholder, which by custom chooses its president. Not surprisingly, defensive caution is hardwired into the Bank's institutional culture, however high-profile its boss.
"Wolfensohn has done a splendid job in difficult circumstances," says Bill Frenzel of the Brookings Institution in Washington. "You may not like his style, but the criticism of him has no logic. Yes, they talk with reverence of McNamara at the Bank - but that was when lending was expanding and the idealism was huge. Wolfensohn's time has been much tougher."
The challenges facing his successor are many, starting with the plight of the 80-odd countries where average per capita income is less than $2 (pounds 1) a day. The World Bank must try to broker a settlement in the loan/grant dispute - concerning the strings attached to projects to help the Third World. …