Monday, April 23, 2007

Financial Times Editorial Comment: Why Wolfowitz should depart now

Financial Times Editorial Comment: Why Wolfowitz should depart now
Copyright The Financial Times Limited 2007
Published: April 22 2007 22:01 | Last updated: April 22 2007 22:01

If Paul Wolfowitz remains head of the World Bank, he will preside over a rudderless hulk. That is today’s inconvenient truth. The US has always had the prerogative of nominating the president of the bank. But this privilege carries with it a big responsibility. Exercising that responsibility now requires acceptance of an immediate change in the bank’s top leadership.

The revelations of Mr Wolfowitz’s role in deciding the terms on which his girlfriend was seconded to the US state department became public a little over a week ago. Since then two points have become clear, despite much obfuscation. First, responsibility for the astonishingly generous terms given his girlfriend rested solely with Mr Wolfowitz, who went beyond the board’s recommendations. Second, the board itself failed to respond appropriately when he went beyond its advice.

When Mr Wolfowitz arrived at the bank, he was on trial. He has now been judged. He has lost the confidence of most of its staff, including many of his most senior colleagues and many of the bank’s most powerful shareholders, as today’s letter from former senior members of staff makes clear.

Some American commentators write as if the bank belonged to the US. It does not. It belongs to the world. Europeans made three-fifths of the new contributions to the current replenishment of the International Development Association – the arm for providing grants and cheap loans to the world’s poorest countries. This is nearly four times as much as the US share. If the current leadership stays, European governments cannot – and should not – promise taxpayers’ money for the next replenishment.

If the bank is to carry out its task of helping the world’s poorest countries, it must have a president who possesses the needed credibility and support. A change in the present method for selecting the heads of the World Bank and the International Monetary Fund is overdue. In the current emergency, however, the US should be asked to nominate someone demonstrably suitable for that task. That candidate certainly need not be American. But he or she should be possessed of proven managerial competence, understanding of the challenges of development and moral authority.

Whether he goes or stays, Mr Wolfowitz’s presidency is over. Nothing can now make it effective. If the governments of leading countries allow this farce to continue, they will make their protestations of devotion to poverty alleviation meaningless. They must, instead, now ensure the smoothest possible transition to new leadership.


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