<em>NY Times</em>: Europe Offers U.S. a Deal on Wolfowitz Exit

-

wolf100.bmp
One of the unwritten but hard as concrete rules in the governance of the world’s two most important transnational financial institutions is that a European heads the International Monetary Fund and an American heads the World Bank. . .always.
But the Wolfowitz scandal is testing that norm and threatening to pull the supporting thread far enough on Wolfowitz and America’s implicit right to name his successor that serious repercussions could ensue in many other backroom arrangements between nation-state stakeholders over power and positions held in other international organizations.
Tonight, the New York Times reports that if the U.S. manages Wolfowitz’s exit expeditiously, Europe will continue to respect the status quo in American selection of the World Bank’s CEO.
This action is further indication that Wolfowitz’s tenure is probably going to be snipped to an early end soon — and other players are already being looked over. Some have reported that former Afghanistan Finance Minister Ashraf Ghani is high on the list. While some reporters have noted that he would be the first non-American to head the World Bank if selected, some prominent journalists have told me that Ghani actually holds American citizenship. I don’t know which of these views is accurate.
Others who are being considered include Goldman Sachs Senior Adviser and former US Trade Representative and Deputy Secretary of State Robert Zoellick, incumbent Deputy Secretary of the Treasury and former US Ambassador to Germany Robert Kimmitt, and incumbent Israel Central Bank Governor and former First Deputy Managing Director of the International Monetary Fund Stanley Fischer.
— Steve Clemons

Comments

25 comments on “<em>NY Times</em>: Europe Offers U.S. a Deal on Wolfowitz Exit

  1. serial catowner says:

    Choosing someone who is nominally an American has not resulted in choices who actually have America’s best interests at heart.
    We’d be better off to share the power and responsibility.

    Reply

  2. Robert M. says:

    Wolfie needs to GO!
    No matter how the directors screwed up, he works for THEM. Its too bad if they change their minds, or excuse themselves their “bad” behavior. TOUGH.
    Its business, people. That’s how it works.
    But its also both small p and large P POLITICS. Its now all about Power, and the NeoCons are ALL about POWER. People, a CONVICTED – But – PARDONED felon is running crucial aspects of American foreign policy! If B/R/C/R have no shame about that, they are going to have no shame is trying to “win” here.
    Its Wolfie or the Bank. If Wolfie stays, the Bank is functionally DEAD for the next 2-plus, because we know that the next Dem prez’s 5th thing to do is fire his ass.
    That all this may involve “other things” is almost beside the point; Heck, IS beside the point. This is now all about Power.
    Who has it, who gets to use it, and Who decides to use it for what.
    Now you may dislike or even hate what the Bank does. (It certainly looks like a schloretic bureaucracy, as in “the system becomes more and more schloretic and unable to respond to economic reality and it collapses” [Googled quote on the Stalinist system.]) Fine. BUT the key point here is not to burn down the house because theres too much Euro & African buy-in to the system at the moment. Its to get the incompetent, fatally flawed Fire Chief off the damned fire truck so the real firefighters can knock the fire down.
    Always focus on the immediate point to be leveraged. Do not let chasing rainbow’s get in the way.
    That Paulsen has caved in to B/R/C/R is bad news.
    Please update us, Steve!!!!!

    Reply

  3. verify trust says:

    Wolfowitz must go. But it would be even better if the World Bank also goes. The highly “qualified” and “technocratic” World Bank staff has for more than four decades been systematically dishonest in the way it selectively presents facts, foists half-baked ideological propositions and fads as policy reforms on to developing countries, buries inconvenient truths about lousy loans and lousy polic advice given to lousy governments with lousy economic policies. Can you think of even one developing country that grew fast because of the World Bank? World Bank staff have never been called upon to account for their mistakes. Poverty eradication enters the the mind of the Bank technocrat only at the highest level of abstraction. More time is spent in talking with each other, writing briefing memos to bosses, riding the flavor of the month and conjuring up half-assed programs and packaging them as frameworks and innovative approaches. And all of this endless wheel spinning is lubricated by very generous non-transparent compensation packages that violate most principles of good compensation management. Also, cronyism in appointments, self-serving dealings are part of World Bank culture refined and honed over four decades. Wolfowitz abused his powers to unfairly compensate a few. But he was merely following a well established Bank tradition of capricious or self-serving dealings. Expenditure control is poor. Every reorganization in the Bank started out as efficiency enhancing and landed up adding more staff, overheads and organizational layers. Just look at the Bank’s Staff and Organizational Directory over the years! And the Bank staff has the gumption and temerity to advice developing country governments about reform of public finance, civil service restructuring and civil service salaries! Maybe it is time to shut down the official aid business. Use official aid only when natural calamities temporarily overwhelm countries. That way the tax payers in developing countires would be saved the burden of funding repayment of dud loans and tax payers in developed countries would be saved the burden of supporting self serving aid agencies.

    Reply

  4. profmarcus says:

    in reading up on the progress of the iraq oil law today, i suprised myself by finding what i believe may be the underlying reason why bush put wolfie in the world bank spot in the first place and why he seems so hell-bent on keeping him there… the scales fell off my eyes when i remembered reading how wolfowitz has been pushing the bank to become more involved in iraq lending even to the extent of staffing an office there instead of managing affairs from jordan… anyway, long story which i won’t repeat here, but, if anybody’s interested, they can follow-up with my post here…
    http://takeitpersonally.blogspot.com/2007/05/imf-world-bank-and-iraqi-oil-one-reason.html

    Reply

  5. ... says:

    they say every picture tells a story, lol.

    Reply

  6. Matthew says:

    Steve: Do you have an endless supply of creepy Paul Wolfowitz pictures. Each day a new pic–and he looks terrible in all of them.

    Reply

  7. Brigitte N. says:

    The Europeans ought to reconsider. If Wolfowitz goes quietly so that the U.S. can pick his successor, the Bush administration may well put up Dan Rumsfeld or John Bolton. What then?

    Reply

  8. Ajaz Haque says:

    The White House is completely remiss in continuing to suppor Wolfowitz. Why cling to a losing proposition? But then same could be said about the Iraq war!
    Unless this Pres & Vice Pres are impeached, there are 20 months of torture to go for the whole world.

    Reply

  9. David N says:

    Perhaps this and many other scandals will lead to revisiting a part of the “conventional wisdom.”
    At this point — but only because the President is a Republican; wait for this to change when the next, Democratic, president is in office — it is standard practice to argue that unless the nominee is found with the body of a fetus in his hands, fresh-ripped from the womb of a Christian white woman, then the President should be able to name who he wants to whatever office he wants.
    Of course, after January 21, 2009, it will become standard practice to demand that the nominee not only be of sterling character, but actually be qualified for the position in question.
    Had this been the case, imagine:
    Bolton, of course
    Wolfie
    Condie
    Brownie
    Gonzo
    no time . . . .
    Why can’t Congress — and more importantly the RNC captive media — start demanding that now?
    Well, we all know why, but it’s nice to dream.

    Reply

  10. john somer says:

    Traditionally, the US and Europe have the right to nominate the presidents of the two institutions but have no restrictions on who they can nominate.
    The leverage that Europe now has relates to the replenisment of the International Development Association, a WB offshoot. The Europeans might very well refuse to contribute if they are dissatisfied with the WB president (which at least the Belgian finance ministeer indicated he was in a TV interview this evening

    Reply

  11. Ajaz says:

    Mr. Wofowitz
    Please leave now and spare us these dramatics that you haven’t done anything wrong and more emabarrassment to yourself and to President Bush.

    Reply

  12. Punchy says:

    HERE COMES THE I-TOLD-YOU-SOS, Mr. Clemons!! From Reuters:
    “WASHINGTON (Reuters) – The White House said on Tuesday the World Bank could continue to be effective with embattled World Bank President Paul Wolfowitz in charge.
    “We believe that the World Bank can continue to be an effective development institution with Paul Wolfowitz as president,” White House spokesman Tony Fratto said.”
    This President won’t fire ANYBODY. PERIOD. FULL STOP.

    Reply

  13. erichwwk says:

    I too hope GWB rejects the European offer, forcing a long overdue revisit of the informal WB and IMF CEO selection process. Joe Stiglitz’s oped can be read w/o a FT subscription at http://tinyurl.com/2ykaj8 .
    In it he makes the case that reform of the CEO selection process is more important than the one time act of who that person is, while at the same time suggesting specific chiefs more likely to advance the WB global mission than ones suggested from a US perspective.

    Reply

  14. jojo says:

    Don’t those foolish Americans realize by now, that Bush it, will nominate once a lying houseslave Powell . Or better yet–no needed experience George Tenent.

    Reply

  15. Gary says:

    Don’t those fool Europeans realize that Bush will nominate John Bolton?

    Reply

  16. Punchy says:

    I agree that Wolf will not leave this gracefully. He’s got a bully and blowhard for a lawyer, and he himself is a pompous, greedy charlatan. He will do everything in his power to ransack and burn the place down on the way up.
    And yeah, Bush’s hand-picked replacement could be….will be….a disaster.

    Reply

  17. steve duncan says:

    Commander Guy can’t be happy about all this.

    Reply

  18. PJWhite530 says:

    I certainly hope that Bush won’t be allowed to appoint the new President of the World Bank. As bad as Wolfowitz is, and he is BAD, Bush knows people who are far worse. And we all know how much he likes to be shown that he has made a mistake. He would probably nominate the most outrageous person he could think of, just to show us he can. What, after all, are the consequences? Think he really cares about the World Bank? All it does is help poor people, ostensibly; however, Wolfowitz just saw a big pile of money, ripe for the taking. And that’s what he did.

    Reply

  19. jon says:

    This would not be possible if the US had not squandered its power and prestige, and staffed the upper reaches of the administration with the inept.
    Their strident, though woefully limited, vision boils down to nothing more than personal gain. That is insufficient to the needs of the nation or to the goals of international organizations.
    The neocon project was fated to fail, the only questions being when, where and how spectacularly?
    It will be interesting to see the analysis on the success of the World Banks operations and anti corruption efforts in the wake of this. Should the bank allow Wolfowitz to continue, censured or not, or permit a replacement with any questions to their integrity, then the operations and utility of the bank will be permanently compromised. We should expect the ‘donee’ countries to feel far less necessity to honor the terms of their loans or to participate genuinely in the banks programs.
    Wolfowitz himself is a triviality, but symptomatic. He should experience pain superior to organ failure – prehaps through endless reincarnations as an Indian subsistance farmer, perpetually unable to pay off his usurious loans for GM seed, Roundup, and privatised water supply.
    But the real damage has been to the position of the US, the integrity of the World Bank, and the ability of the world to improve the lives of the most impoverished.

    Reply

  20. Tom_W says:

    “While some reporters have noted that he would be the first non-American to head the World Bank if selected, some prominent journalists have told me that Ghani actually holds American citizenship. I don’t know which of these views is accurate.”
    It seems he does….
    http://tinyurl.com/33gjxj

    Reply

  21. FollowTheMoney says:

    The European move is brilliant – like a forking move in a chess game. Bush (and Wolfowitz) have to choose between what’s best for the USA (keeping the power to name the WB President) and what’s good for Wolfowitz.
    Expect Treasury Secretary Paulson to push for what’s best for the USA. Expect Wolfowitz to push for what’s best for Wolfowitz (the guy has never been a patriot, but always a self-dealer). It’s hard to say what Bush will do.
    Didn’t I read somewhere that Wolfowitz has already started circulating how big a pay off he wants to go quietly into the night – something like $400,000 to $500,000 tax free? Isn’t it just like him to want a final personal taste of money otherwise intended for the world’s poorest people before he even considers doing what’s right for his country and what’s right for the bank? What a selfish, foolish little man he has shown himself to be.

    Reply

  22. ... says:

    wolfowitz is not going to go without a fight. he is going to let this drag on and will be a royal pain in the ass to any fairminded individuals who work at the world bank.. i wish it was going to be different but i will be shocked if he behaves any other way..

    Reply

  23. JohnH says:

    Joseph Stiglitz weighed in with an opinion piece in the Financial Times today (subscription only). Among other things Stiglitz recommended choosing someone other than an American as World Bank president–someone who knows something about economic development, not as the developer, but as the developee. You heard it right, someone from a middle income country or emerging economy. Probably someone with brown or black skin.
    To add insult to injury, Stiglitz also suggested that the selection process be more democratic.
    The US foreign policy and national security mafiosos must be writhing at the thought!

    Reply

  24. oppositionradio says:

    Which world bank staffers were part of the DC hooker scandal as mentioned on ABC last week?
    Wolfowitz is shameful – if for nothing else his biting rebuttal to General Shinseki’s now prescient statements about how many troops it would take to win the peace in Iraq – and his equally perposterous claim that Iraq would be able to pay for their “liberation” with the proceeds from oil. This man should not only be removed from this job – he should be tried.

    Reply

  25. Zathras says:

    I sincerely hope the Treasury Secretary will have the decisive role in directing the administration’s decision here. Support for the World Bank rests on no more sturdy a foundation in many donor countries than it does here, and the longer the Wolfowitz affair drags on the more demands it places on that support.
    There are lots of Americans who could be counted on to fight corruption were they named president of the Bank; some of them have stronger backgrounds in finance than Wolfowitz does. If the deal really is to let Washington name the next Bank president if it agrees to have Wolfowitz forced out, we ought to take it. We don’t gain anything by sticking our necks out for this guy.

    Reply

Add your comment

Your email address will not be published. Required fields are marked *