Future of Wolfowitz and the World Bank
Rizwan Ghani
April 15, 2007
After offering an apology for his act WB president Woflowitz has dug his heels to save his job. Can he survive or the WB needs a new head?
The WB 25 member board by now should have made up their mind about the fate of Wolfowitz. The board reportedly is considering his involvement in the issue of pay raise for his girl friend. His decision is widely perceived illegal under bank’s policy. The board is expected to reach a decision in near future.
With reports of expected drop in aid flow in 2007 the Board has additional responsibility to protect Bank’s cardinal interests including combating poverty. Reportedly, Board is getting guidance from 180 finance ministers around the world about Wolfowitz’s case. However, it would be interesting to see how the Board that usually decides matters by consensus finds a way out over current standoff with three power centers: USA, Japan and Europe, the largest donors to its $20 billion annual lending and assisting programme.
Bush has already shown strong “confidence” in Wolfowitz. Reportedly, since then Wolfowitz himself has been on an offensive to by holding behind the scene meetings with ministers and officials visiting Washington to attend annual session sponsored by the WB and the IMF. There are reports that he is trying to win support of African leaders to keep his job.
It has however raised eyebrows in different capitals because African leadership is notorious corrupt. Wolfowitz in the start of his career as WB head had promised to cut aid to regimes involved in corrupt practices. He even cancelled four projects in Africa due to similar reasons. But his latest step to seek support for individual reason has in many ways compromised WB’s principle stand against corruption as part of strategy to eradicate poverty.
Europe in all probability may not be “charitable” with Wolfowitz heading the Bank. It has been reflected in the statement of Germany’s minister in charge of the World Bank, Heidemarie Wieczorek-Zeul. While speaking to Reuters and Bloomberg news services of he talked of the importance of preserving the bank’s “moral authority” and suggested that even though Mr. Wolfowitz has apologized, he might need to leave for the good of the bank.
The minister added, “Wolfowitz has to decide for himself whether he can continue to fulfill his duties credibly under these circumstances.
These comments also show that world finance ministers are unlikely to force Wolfowitz out. But that a reprimand of some kind might persuade him that his leadership was untenable.
In view of the details emerging from different sources in the press it is clear that Bank and Wolfowitz had differences from the start. The scandal has provided just the opportunity for the authorities were looking for to get rid of him.
At the individual level the trouble is despite being corned Wolfowitz might ultimately emerge successful for reasons other than rational. But can he work in environment that has been openly defiant and hostile towards him. In all probability he cannot continue indefinitely for the remaining period of his contract. With gloves off there is no turning back. And in all probability after this scandal more will keep surfacing. That in turn will erode his authority.
From credibility perspective if would be catastrophic if Wolfowitz is allowed to stay as head. There are no two opinions that corruption is one of the major stumbling blocks towards progress in the developing world. WB run by a tainted head will have little moral authority to implement its policies.
Without going into the facts of the scandal, past history of working relationship or for that matter his political background including neo-conservative approach the matter comes down to “moral authority”. As highlighted earlier it is no more beyond question. And that in itself should be a sufficient reason for Wolfowitz’s ouster by the board or voluntary departure through his resignation.
Experts despite conflicting media reports believe that Wolfowitz’s departure is imminent. Democrats must be focusing on next president and even fresh policies for the bank in wake of growing Chinese and Venezuelan emerging role in elevating poverty. Chinese president in his last African visit doled out some 8 billion dollars for infrastructure developments to help start economic activity in the continent.
Similarly, due to emerging economic interests and growing resistance towards conditions for privatization and liberalization policies as part of resistance towards “Washington economic model” WB after IMF to some is on the cross roads to maintain its tradition position of policy based on its model of economy.
WB board and world leaders should now be looking for his replacement than spending their political capital to defend a tainted reputation. It is time for WB to focus on poverty alleviation to help restore peace and stability.
Ironic it may be but to some extent it is true that Wolfowitz did take measures to bring an end to corrupt practices both at leadership and national level. But then it’s the policies not individuals that define institutions in the long run.
Some would argue role of leadership morality in effective implementation of the policies. Basing on cart and horse logic “morality” takes precedent over professional and other leadership skills. Only last year a research published in Wall Street Journal showed that multi-nationals are interested in leaders with strong moral character. It was opined that boards and experts can easily manage professional affairs of those organizations but what is always in short supply is strong morals.
Today, what World bank needs is a leader with undisputed integrity and strong morality not professional expertise. For that there is no dearth of specialists to follow assigned direction.
In addition to common knowledge about Wolfowitz and his White House links what is intriguingly interesting is the similarities of WB scandal with other scandals involving allies of Bush regime. A brief review of Gonzales’ standoff on the Capitol Hill, the Walter Reed scandal or for that matter controversies surrounding the social security and Medicaid program, not to mention Libby and even John Abraham’s cases in the near past second New York Times December editorial asserting that corruption is the main problem of Bush regime. Wolfowitz case has deepened the observation. His acts reflect a consistent pattern of policy violations and disregard for relevant laws.
For now the bottom line is departure of Wolfowitz will strengthen WB’s moral credibility in its anti-corruption drive. It is therefore time for international community to play their part to bring a change that serves global missions than individual preferences.
Similarly with Wolfowitz's case the debate over WB’s future has resurfaced. The experts opine that the process of selection of WB head needs a thorough review to make it more democratic and transparent. The institution should look beyond ideology based economic models to be more competitive in emerging economic blocks at global level that are by and large following market based need oriented policies. Accordingly WB should have a fresh policy direction.
The WB 25 member board by now should have made up their mind about the fate of Wolfowitz. The board reportedly is considering his involvement in the issue of pay raise for his girl friend. His decision is widely perceived illegal under bank’s policy. The board is expected to reach a decision in near future.
With reports of expected drop in aid flow in 2007 the Board has additional responsibility to protect Bank’s cardinal interests including combating poverty. Reportedly, Board is getting guidance from 180 finance ministers around the world about Wolfowitz’s case. However, it would be interesting to see how the Board that usually decides matters by consensus finds a way out over current standoff with three power centers: USA, Japan and Europe, the largest donors to its $20 billion annual lending and assisting programme.
Bush has already shown strong “confidence” in Wolfowitz. Reportedly, since then Wolfowitz himself has been on an offensive to by holding behind the scene meetings with ministers and officials visiting Washington to attend annual session sponsored by the WB and the IMF. There are reports that he is trying to win support of African leaders to keep his job.
It has however raised eyebrows in different capitals because African leadership is notorious corrupt. Wolfowitz in the start of his career as WB head had promised to cut aid to regimes involved in corrupt practices. He even cancelled four projects in Africa due to similar reasons. But his latest step to seek support for individual reason has in many ways compromised WB’s principle stand against corruption as part of strategy to eradicate poverty.
Europe in all probability may not be “charitable” with Wolfowitz heading the Bank. It has been reflected in the statement of Germany’s minister in charge of the World Bank, Heidemarie Wieczorek-Zeul. While speaking to Reuters and Bloomberg news services of he talked of the importance of preserving the bank’s “moral authority” and suggested that even though Mr. Wolfowitz has apologized, he might need to leave for the good of the bank.
The minister added, “Wolfowitz has to decide for himself whether he can continue to fulfill his duties credibly under these circumstances.
These comments also show that world finance ministers are unlikely to force Wolfowitz out. But that a reprimand of some kind might persuade him that his leadership was untenable.
In view of the details emerging from different sources in the press it is clear that Bank and Wolfowitz had differences from the start. The scandal has provided just the opportunity for the authorities were looking for to get rid of him.
At the individual level the trouble is despite being corned Wolfowitz might ultimately emerge successful for reasons other than rational. But can he work in environment that has been openly defiant and hostile towards him. In all probability he cannot continue indefinitely for the remaining period of his contract. With gloves off there is no turning back. And in all probability after this scandal more will keep surfacing. That in turn will erode his authority.
From credibility perspective if would be catastrophic if Wolfowitz is allowed to stay as head. There are no two opinions that corruption is one of the major stumbling blocks towards progress in the developing world. WB run by a tainted head will have little moral authority to implement its policies.
Without going into the facts of the scandal, past history of working relationship or for that matter his political background including neo-conservative approach the matter comes down to “moral authority”. As highlighted earlier it is no more beyond question. And that in itself should be a sufficient reason for Wolfowitz’s ouster by the board or voluntary departure through his resignation.
Experts despite conflicting media reports believe that Wolfowitz’s departure is imminent. Democrats must be focusing on next president and even fresh policies for the bank in wake of growing Chinese and Venezuelan emerging role in elevating poverty. Chinese president in his last African visit doled out some 8 billion dollars for infrastructure developments to help start economic activity in the continent.
Similarly, due to emerging economic interests and growing resistance towards conditions for privatization and liberalization policies as part of resistance towards “Washington economic model” WB after IMF to some is on the cross roads to maintain its tradition position of policy based on its model of economy.
WB board and world leaders should now be looking for his replacement than spending their political capital to defend a tainted reputation. It is time for WB to focus on poverty alleviation to help restore peace and stability.
Ironic it may be but to some extent it is true that Wolfowitz did take measures to bring an end to corrupt practices both at leadership and national level. But then it’s the policies not individuals that define institutions in the long run.
Some would argue role of leadership morality in effective implementation of the policies. Basing on cart and horse logic “morality” takes precedent over professional and other leadership skills. Only last year a research published in Wall Street Journal showed that multi-nationals are interested in leaders with strong moral character. It was opined that boards and experts can easily manage professional affairs of those organizations but what is always in short supply is strong morals.
Today, what World bank needs is a leader with undisputed integrity and strong morality not professional expertise. For that there is no dearth of specialists to follow assigned direction.
In addition to common knowledge about Wolfowitz and his White House links what is intriguingly interesting is the similarities of WB scandal with other scandals involving allies of Bush regime. A brief review of Gonzales’ standoff on the Capitol Hill, the Walter Reed scandal or for that matter controversies surrounding the social security and Medicaid program, not to mention Libby and even John Abraham’s cases in the near past second New York Times December editorial asserting that corruption is the main problem of Bush regime. Wolfowitz case has deepened the observation. His acts reflect a consistent pattern of policy violations and disregard for relevant laws.
For now the bottom line is departure of Wolfowitz will strengthen WB’s moral credibility in its anti-corruption drive. It is therefore time for international community to play their part to bring a change that serves global missions than individual preferences.
Similarly with Wolfowitz's case the debate over WB’s future has resurfaced. The experts opine that the process of selection of WB head needs a thorough review to make it more democratic and transparent. The institution should look beyond ideology based economic models to be more competitive in emerging economic blocks at global level that are by and large following market based need oriented policies. Accordingly WB should have a fresh policy direction.
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