Americas

Americas

Zoellick to leave World Bank, opening new battle

16 February 2012 02:15 (UTC +04:00)

Baku-APA. World Bank president Robert Zoellick announced Wednesday that he would step down at the end of June, setting up a possible new fight over US dominance at the global development lender, APA reports quoting AFP.
Zoellick, 58, said he would complete his five-year term, during which he shepherded the Bank and its members through the financial crisis that had a heavy impact on many of the world’s poorest countries.
"I’m very pleased that when the world needed the Bank to step up, our shareholders responded with expanded resources and support for key reforms that made us quicker, more effective and more open," Zoellick said in a statement.
"The Bank is now strong, healthy and well positioned for new challenges, and so it is a natural time for me to move on and support new leadership."
His departure sets up the second battle in less than a year over US and European dominance of the Bank and the International Monetary Fund, the world’s two leading multilateral financial institutions.
Thanks to an unwritten pact between European powers and the United States dating to 1945, all 11 Bank presidents have been Americans and all IMF managing directors have come from Europe.
Speculation on Zoellick’s successor has focused on three Americans -- Secretary of State Hillary Clinton, Treasury Secretary Timothy Geithner and former Treasury chief Larry Summers.
But a fight could be looming. After IMF chief Dominique Strauss-Kahn’s sudden resignation last May, strong pressure arose from emerging economies to name a non-European to lead the Fund.
But backed by the leading economic powers, in the end French finance minister Christine Lagarde was chosen over several non-Europeans.
On Wednesday, some five dozen international development organizations and activists said developing countries should have a greater say in choosing Zoellick’s successor.
"It is time for the US to publicly announce that it will no longer seek to monopolize the presidential position," they said in an open letter.
"As the Bank only operates in developing countries, and has most impact in low-income countries, any candidate that was not supported by these countries would seriously lack legitimacy."
Brazil’s Finance Minister Guido Mantega said emerging country candidates should have "the same chance" to lead the Bank.
"I believe that the United States will continue to insist that it will be one of its representatives," he said.
"We are working so that that does not happen."
A former US trade representative and deputy secretary of state, Zoellick took the job in July 2007, just as the US financial crisis began to erupt.
He replaced Paul Wolfowitz, a former US defense secretary who resigned after two years under an ethics cloud related to his personal relationship with a World Bank official.
Zoellick moved the Bank to boost its resources and deploy some $247 billion to help developing countries counter the economic crisis.
He also helped expand the Bank’s growing emphasis on women in development, and in its own ranks.
Former bank staffer Katherine Marshall, now a professor of government at Georgetown University, said Zoellick’s main legacy "is putting order into an institution that was on the edge of revolution because of the Wolfowitz fiasco."
But she said he failed to give the organization’s 10,000 staff a needed vision.
The World Bank presidency is powerful: managing a huge operation which aims to help countries and people out of poverty but also, through its massive financial resources, is able to set development and social priorities around the world.
"Given the presidential nature of the institution and the complexity of the development world, with so many institutions and so many directions, I think you need an intellectual and a moral force in that bully-pulpit," Marshall said.
Geithner said Washington would nominate a candidate within weeks.
"It is very important that we continue to have strong, effective leadership of this important institution," he said in a statement.
Geithner and Summers -- currently a professor at Harvard University -- have both been mum on whether they want the job.
A State Department spokeswoman said Clinton is not interested.
"The secretary has addressed this issue many times since last year. She has said this is not happening. Her view has not changed," the spokeswoman, Victoria Nuland, told reporters.