IFI governance


Are Wolfowitz’s days numbered at the World Bank?

20 April 2007

As one of the most tumultuous weeks in World Bank history draws to a close, it looks increasingly like president Paul Wolfowitz’s days are numbered. Those who have called for his resignation now include his number two, managing director Graeme Wheeler, the Bank staff association, a who’s who of the world’s financial press, heads of key development thinktanks and myriad civil society organisations. (For detailed blow-by-blow coverage, visit worldbankpresident.org or for an insider perspective from Bank staff visit wolfowitzmustresign.)

Late into the evening on 19 April, the Bank’s board met in special session to discuss the crisis over Wolfowitz’s role in the re-assignment and promotion of Shaha Riza (see Calls for Wolfowitz to resign mount). The board, having reviewed the 11 April document of the ad hoc working group formed to investigate the matter, has asked once again for the group to do some further investigation. (It is not known who is on the ad hoc working group.) This delaying tactic is widely seen as an attempt to encourage Wolfowitz to resign or the Bush administration to reconsider its support for their man.

Worryingly for Wolfowitz, the board has now broadened the ad hoc group’s remit, asking them to address “issues around employment contracts made in the office of the president”. This refers to increasing questions which are being asked about the terms of employment of advisors Kevin Kellems, and Robin Cleveland, and head of the department of institutional integrity, Suzanne Rich Folsom. The board has asked one of it’s own sub-committees which deals with administrative matters, the Committee on General Administrative Matters (COGAM), to make recommendations. COGAM is chaired by German representative Eckhard Deutscher. It is believed that other committee members include Dutchman Herman Wijffels, Canadian Samy Watson, Korean Joong-Kyung Choi, Norwegian Svein Aass, Pakistani Shuja Shah, Malaysian Mat Aron Deraman, and Louis Phillippe Ong Seng from Mauritius.

The timeline for the report of the ad hoc committee and the recommendations of COGAM is unclear. The board has continued to say that they will “deal with the situation urgently”.

Speculation has already begun on who might replace Wolfowitz. The Economist has put forward former IMF chief economist Stanley Fisher. Kenneth Rogoff, also a former IMF chief economist himself, has suggested South African finance minister Trevor Manuel. UK daily The Times has reported that the White House is considering former Afghan finance minister Ashraf Ghani. Other suggestions range from the interesting (former Nigerian finance minister Ngozi Okonjo-Iweala) to the politically like-minded (a Guardian columnist has suggested UK prime minister to-not-be Tony Blair) to the bizarre (Ahmed Chalabi, former deputy prime minister of Iraq) and downright terrifying (Bloomberg columnist Matthew Lynn resurrected former US defence secretary Donald Rumsfeld).

Many of these pundits have joined civil society calls for an urgent re-visiting of the process of selecting the head of the Bank, increasing transparency and reforming the governance structures of the Bank which ensure that decision-making power rests in the hands of a small number of rich countries. European civil society groups have called on European leaders to take a common position on reform of the leadership process.